A lot of observers understood we had a housing bubble — Dean Baker, for instance, had been sounding the alarm for years — but few of the housing skeptics saw everything going on behind the bubble: That the subprime mortgages had been packaged into bonds, that the bonds had been sliced into tranches, that the formulas being used to price and rate the tranches got the variable expressing correlation wrong, that an extraordinary number of banks had purchased an extraordinary amount of insurance against getting that correlation wrong from AIG, that AIG had also priced the correlation wrong and would be unable to pay its debts in the event of a meltdown, that a meltdown would freeze the mostly unregulated shadow market that major financial institutions and players used to fund themselves, that the modern financial system was so fragile that an uptick in delinquent subprime mortgages could effectively crash the global economy
“Reading and thinking. The beauty of doing it, is that if you’re good at it, you don’t have to do much else" Charlie Munger. "La cantidad de energía necesaria para refutar una gilipollez es un orden de magnitud mayor que para producirla" Paul Kedrosky «Nulla dies sine linea» Antonio Guarino. "Reading won't be obsolete till writing is, and writing won't be obsolete till thinking is" Paul Graham.
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