So as I prepare for the next part of my life as a big, bad, soulless trader, I’ve taken the opportunity to familiarize myself with the current financial crisis as well as ones past as much as possible, a pretty obvious thing to do. My father gave me A Bubble that Broke the World by Garet Garett, a book that concerns the credit bubble that was at the center of the Great Depression and I am currently in the process of reading that. I have read all the classic Wall Street horror stories, Long Term Capital, Liar’s Poker, etc. Hell I even worked at Countrywide in the last days of its run in the sun.
All of these stories and situations have one thing in common, they were all too good to be true (funny how that motto seems applicable to pretty much everything). Now I’m finding out that some mathmetician who probably would’ve been better served in an industry other than Finance (another problem all together) apparently created the formula that proved correlation between two vehicles? We’re supposed to believe this? The great powers that be on Wall Street said…”hmm that makes sense, this formula accurately displays the correlation between any and all vehicles in spite of any exterior influences.” WHAT!??!?
Listen, I know the way that the market works, booms and busts, people get caught up in the hype and they follow the cash like lemmings follow the leader, but in no way does that mean the market can be simplified down into defined mathematical formulas. The market relies on the intangible influence of the human effect, that is something that cannot be forgotten.
Couple of links for y’all
My first Shanghaiist Article
Mark Cuban’s Take on Twitter. Is the next bubble the Twitter bubble? God I hope not.
Maurice Clarett’s Blog from the Inside. Clearly a sad tale, but its comforting to know that despite his past missteps the guy seems like he’s finally got his head on straight.