BEWARE of geeks bearing formulas. That's the lesson most of us have learned from the financial crisis. The "quants" who devised the risk models that induced so many financial institutions to buy mortgage-backed securities thought they had reduced risk down to zero. Turns out they got a few things wrong. Their formulas were based on only a few years of actual data. Or they failed to take into account the possibility that housing prices would fall. Or that the market for mortgage-backed securities might suddenly stop functioning. The lesson seems clear. Don't allow a whole system to become hostage to...