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February 24, 2009

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Bolaji - CustomerFlyPaper.com

Chris,

Thanks for sharing. It brings the following to mind:

"Common knowledge is always correct."
(Until, it is not.)

I guess we've come to the painful realization that the financial world is no longer flat.

Hm.

Great lessons for kids in school, who are taught to accept everything in a text book as gospel.

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Thanks for sharing this article. I agree with what you are saying. You are so right. Hope you will post an article regarding website design. Thanks

-faith-

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Hi,
Myself Jimmy from Canada. Thanks for the wonderful and useful information.
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bruce

Well, i think that the Wall Street turned to the quants—brainy financial engineers—to invent new ways to boost profits. Their methods for minting money worked brilliantly... until one of them devastated the global economy.

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bruce

Well, i think that the Wall Street turned to the quants—brainy financial engineers—to invent new ways to boost profits. Their methods for minting money worked brilliantly... until one of them devastated the global economy.

We are in search of product and service reviewers to work from home. You need basic computer and internet skills and the ability to follow directions. This is a contract job with the possibility of becoming part time. All that we ask that you have is a home computer and that you are a citizen of the USA. This is a very simple job to complete and you can do it from home.

----------------------------------------

bruce

http://stealthyshoppers.com/

Adam

Truly top rate writing and analysis. I particularly like that the article links to a WSJ article from 2005 quoting Li on the dangers of treating the Gaussian Copula as if it created gospel truth.

robert

Its really a Quant's job to be able to explain the subtleties about how this equation works and how it doesn't, but the problem with pricing models is that they can be abused to boost someone's bottom line on paper. People can abuse this pricing model by using it when it should not be used.

Unfortunantely there is no quick fix to this, because for accounting purposes people need to create some numerical dollar value for their assets, and when you have ill-liquid assets (like houses, for example) there doesn't exist such a thing as a "market price" at every given time.

watzabatza

i agree... in every problem.. there's a solution.. right?

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i agree with you. in the world now all many problems :)

James

Is this the right place to report that this edition of Wired print magazine is entirely unavailable (study of 15 newsagents and 5 book megastores on 9th March 2009) in Islington, North London?

A large percentage (anecdotal) of London's largest bankers live in this part - I realise it's available online but still....we'd all benefit from this lesson as we (I work with bankers and am not a wan..um....banker) buy our dying newspapers,'fags', and other confectionary.

To the Wired publishers - please extend distribution network in North London.

Tom Cochrane

Fantastic. Thanks so much for bringing this to my attention. I'll take a look at the cover article this evening.

This is a great example of the bogus science and theory that supports so much of conventional finance.

The Markowitz mean-variance frameword (diversify with some precautionary savings and everything will be fine in the long-run) falls squarely in this camp.

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Truly top rate writing and analysis. I particularly like that the article links to a WSJ article from 2005 quoting Li on the dangers of treating the Gaussian Copula as if it created gospel truth.

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i agree with you. in the world now all many problems :)

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Take a big basket of financial instruments, each with their own risks, through them into the Copula function, and presto: you get the net risk. It was so beautiful and apparently bulletproof that investors began treating it like a black box. Then it all went wrong.

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This story profiles David X. Li, the inventor of the formula (now living in China), and how its adoption led to the chronic mispricing of risk that toppled some of the largest banks.

David

Explain the subtleties about how this equation works and how it doesn't, but the problem with pricing models is that they can be abused to boost someone's bottom line on paper. People can abuse this pricing model by using it when it should not be used.

David From the Deeper Voice Blog

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Is this the right place to report that this edition of Wired print magazine is entirely unavailable (study of 15 newsagents and 5 book megastores on 9th March 2009) in Islington, North London?

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Its really a Quant's job to be able to explain the subtleties about how this equation works and how it doesn't, but the problem with pricing models is that they can be abused to boost someone's bottom line on paper. People can abuse this pricing model by using it when it should not be used

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Television all worked very well on the free model. Distribution is almost free on the internet so creating content is the only cost. Advertising revenue is the key.

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Just passing by.Btw, your website have great content! Thank you so much for sharing such an interesting article, i really appreciate this..

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That was excellent thank you.I think its companion is equally good, if not better, only because it speaks of the possible future, instead of probable past.

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I was talking to an old friend last night. Our conversations led to us talking about Collateralized Debt Obligations (CDOs) and Collateralized Mortgage Obligations (CMOs) and the financial crisis. I referred him to this article from Wired Magazine on CDOs, titled Recipe for Disaster: The Formula that killed Wall Street. It does a pretty good job of explaining the CDO problem.

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Tidbits

The Long Tail by Chris Anderson

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