From the Blogs

I found the following on The Trader website, via Zero Hedge. It is by one Gordon T Long, and I wanted to put it here as an aide-memoire--but I thought that some of my regulars would like it too. I like diagrams.

Comments

Toni said…
Its an amusing diagram. I remember a very senior CDO structurer informing us that the credit derivatives and collateralized debt markets had effectively removed risk from the market and that the quants could provide evidence to prove this. My argument was that there is an element of risk in every transaction and risk can never be truly dispersed.
Martin Meenagh said…
This whole idea that numbers are definitive real world proof has been refuted so many times, and yet still they believe--oi vei!

As long as you breathe there's risk. Perhaps part of a financial licence application should be devoted to an essay on Chaucer.