Here is an article on the author of The Black Swan. Nassim Taleb writes that Wall Street models for risk are faulty. He argues for the presence of so called Black Swans, irregular unexpected events which do not fit math models. We are discussin options in Intermed II. This is an excellent article exploring the quant view of risk taking. He made his money buying out of the money call options of the Euro currency just before the crash of 1987. Now he is in demand as a speaker at all sorts of events including NASA as they ponder sending humans into far space. These are the sort of books that you should be reviewing!
Put Taleb into Amazon.com and read about his books.
Here is Goldman Sachs speak on how they missed this crisis though they did get out of most of their sub prime paper unlike Bear Merrill and Lehman.
and CRPGMII means you should trust us though there is no evidence for that....
In truth there have been lots of independent writers warning of a collapse in housing, this blog alone the last couple of years has mentioned the number of pages of advertising in luxury properties in the WSJ for example, wondering who will be the last person left holding that proverbial bag. I read a book several years ago predicting that easy lending brought on drive by appraisals and way too much risk, which is precisely what happened. Fancy phrases like 'pricing credit risk' is a cover up for we took way too much risk and thought our quant models would take care of it. Or as Dad used to say, those guys are not as smart as they think they are. Wall Street is forever creating its own alternate reality and then taking the firm and the clients down in their latest misadventures, the above articles mention several instances of this., without of course admitting any culpability.
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