the flawed assumptions? do you really believe that rating agencies are still using David's formula for simulation???
Actually rating agencies have changed methodologies several times with respect to their structured finance (CDO) rating service.
For God's sake, why do not you read the papers that cite David's paper. His paper is only step 1 in the whole CDO industry. There are many more sophisticated models after his.
Why the Wired.com author did not attack the rating agencies and those Wall Street bankers? Why he did not attack Duffie who personally advised so many CDO deals?? All IBs have tons of mathematicians in their research department. David's model is already a kid's play for them for years...
