Monday, October 06, 2008

For anyone that missed the unbelievably bad reporting on the financial crisis on 60 minutes last night....


Asked if he thinks anyone ever reads all this fine-print, Partnoy says, "I doubt many people read it."

These complex financial instruments were actually designed by mathematicians and physicists, who used algorithms and computer models to reconstitute the unreliable loans in a way that was supposed to eliminate most of the risk.

"Obviously they turned out to be wrong," Partnoy says.

Asked why, he says, "Because you can't model human behavior with math."

"How much of this catastrophe had to do with the instruments that Wall Street created and chose to buy…and sell?" Kroft asks Jim Grant.

"The instruments themselves are at the heart of this mess," Grant says. "They are complex, in effect, mortgage science projects devised by these Nobel-tracked physicists who came to work on Wall Street for the very purpose of creating complex instruments with all manner of detailed protocols, and who gets paid when and how much. And the complexity of the structures is at the very center of the crisis of credit today."

Yeah, that's it... it's the nerds' fault. Anyone wonder WHY they were told 'make a model that does THIS'... Anyone bother to ask whether maybe the very idea was to create something ARCANE so they could shroud the fact that it was snake oil? Plus - arent physicists like, you know, busy working on blowing up the planet? (i think the LHC is all part of a massive coverup project - so no one will blame the mad scientists for destroying the banks)

If you want to find people to hold accountable - and you're the only one since justice made it clear they wont be going after anyone on this because that would further destabilize the situation - why not simply look to see who made the money.

When we didnt penalize the Boeskys and Milkens we encouraged this. At this point - the only way in front of it is to nationalize the banks - now - before it really totally falls apart... Europe needs to lead the charge on that because there's no way we're politically courageous enough to stand up and say 'capitalism has fucked up and here's the bill'.

2 comments:

Karmadrome said...

Is the use of the atomic bomb the fault of Einstein or Truman?

GreatGoblin said...

it's 'tomic' - or didnt you watch the debate the other night