Slide talk – “Libor Market Models : the reasons behind the success”

I found some very interesting (promo?) slides from SocieteGenerale discussing WHY the Libor Market Model LMM [aka BGM/J, an instance of HJM] has become so popular, despite its significant imperfections.

But are we fooling ourselves that we can still put “the wrong number in the wrong formula to get the right price”?

I think they miss the point, basically you need some parameters to make a good model fit the environment [to paraphrase Dermans definition of useful ‘model’ is that it allows you to price something from other, somehow related, market observables].  Sure, you need several parameters to get enough flexibility to calibrate to the market.