Recipe for Disaster: The Formula That Killed Wall Street

[Chomsky]

Re: Recipe for Disaster: The Formula That Killed Wall Street

Here is a very good layman's article on why AIG and its CDS portfolio is being kept alive by endless government bailouts. Really worth reading:

http://www.nytimes.com/2009/02/28/bu...pagewanted=all

[cjppjc]

Re: Recipe for Disaster: The Formula That Killed Wall Street

Here is the part is like the best:

A.I.G. had one of the most precious prizes in all of business: an AAA rating, held by no more than a dozen or so companies in the United States. That meant ratings agencies believed its chance of defaulting was just about zero

[Starving Steve]

Re: Recipe for Disaster: The Formula That Killed Wall Street

Recipe for Disaster: The Formula That Killed Wall Street

How could one statistical formula cause the trainwreck we see now in world markets, > 30% of the world's wealth to disappear, and the retirement hopes of tens of millions of people to go down the toilet?

The answer lies in the economics departments at our major universities and how economics is being taught. If Zimbabwe's hyper-inflation hasn't answered the question in spades, maybe this trainwreck now in the world markets has answered it.