Mark Stouse

the more correlative kinds of approaches, econometric approaches, are just completely shattering.

They're no longer representing the way that the economy can be expected to move.

And that's just because it's correlation within a closed analytical system, and it's diverging more and more and more from absolute reality.

which it did not do that nearly as much for, say, the past 40 years.

Another really huge example is actuarial analysis in the insurance business.

We've all seen the news coverage about this property insurance company or that one exiting a particular state or a particular zip code where they won't.

write policies anymore.

It could be because of wildfire danger.

It could be because of hurricanes and climate change related stuff.

But the real deal is that

Because of the increasing volatility in the macro world, their systems are struggling to accurately predict their level of risk going forward, which makes it impossible for them to price that risk.

In other words, decide what they're going to charge you for your policy.

And so that risk is so severe that they would rather do something they don't really want to do, which is just not write any policies for people in that area.

But they'll do that because to accept the bet, so to speak, could expose them to levels of risk that their modeling no longer delivers.

And so these are all reasons and illustrations of why correlation is a bust, right, in the current environment.

Thank you.

Well, I think that's exactly what finance teams have been looking for for a really long time.

And to be perfectly honest with you, they have just been really frustrated.

for years by the tendency of go-to-market teams to seek other ways of illustrating their value other than what you might call a truly business approach.

FASB in particular is super important because