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View Diary: NYT "Blows Cover Off Trading Scam." Schumer Flips On Wall St. (450 comments)

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  •  he's a smart guy (1+ / 0-)
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    but lots of people who weren't expert in finance bought the stories of people like Phil Gramm back in the day (10 years ago) about Glass-Steagal and financial competitiveness. Even the Quants on Wall Street basically say they created some mathematical strategies that had promise but were misused/misunderstood by traders.

    Some of them liken the financial use of advanced physics and mathematical theory to the Challenger disaster, where as Richard Feynman pointed out, NASA collectively had no realistic idea of the actual risk they were facing and thus were lulled into a soporific state about the danger.

    Much the same has happened on Wall Street, where the  Masters of the Universe were making huge piles of money, and saying to each other "the Quants built this terrific strategy for making money in obscure ways. What could go wrong?"

    Well, now we know the answer to that!

    In spite of all the smart people on Wall Street, I think one of my favorite quotes is

    In theory, theory and practice are the same. In practice, they're not

    "red hair and black leather, my favorite colour scheme" - Richard Thompson

    by blindcynic on Sun Jul 26, 2009 at 11:02:28 AM PDT

    [ Parent ]

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