Some old 2008 financial crisis explanations
1. This one was one of the first after the initial mortgage crisis - When the bubble burst
Duplicate link:
The cost of financial ingenuity
2. A more recent and specific theory - Recipe for Disaster: The Formula That Killed Wall Street
However, note one of the comments here which points out that a more appropriate title would be "the IMPROPER USE of this formula by less qualified I-bankers that destoryed Wall Street."
The reason for highlighting this article though is the line on page-4:
"But in the CDO market, people used the Gaussian copula model to convince themselves they didn't have any risk at all, when in fact they just didn't have any risk 99 percent of the time. The other 1 percent of the time they blew up. Those explosions may have been rare, but they could destroy all previous gains, and then some."
3. Unrelated but interesting - How Porsche hacked the financial system and made a killing
Duplicate link:
The cost of financial ingenuity
2. A more recent and specific theory - Recipe for Disaster: The Formula That Killed Wall Street
However, note one of the comments here which points out that a more appropriate title would be "the IMPROPER USE of this formula by less qualified I-bankers that destoryed Wall Street."
The reason for highlighting this article though is the line on page-4:
"But in the CDO market, people used the Gaussian copula model to convince themselves they didn't have any risk at all, when in fact they just didn't have any risk 99 percent of the time. The other 1 percent of the time they blew up. Those explosions may have been rare, but they could destroy all previous gains, and then some."
3. Unrelated but interesting - How Porsche hacked the financial system and made a killing
Comments
Post a Comment