There are very useful natural economy models, that define the necessary change for surviving a growth crisis.
It's to realize that growth is actually a construction process, powered by its own profits. So... the solution to a growth system turning itself into a tower of Babel by overreaching its own ability to manage the complications involved, is to use the system's profits for something better. It's not the kind of thing social thinkers like, but necessary. synapse9-dot-com/signals
I don't know how to heal the financial system, but from a bird's eye view I feel like we have enough smart makroeconomics and other people like political scientists who actually could produce some high quality solutions. The problem is our political system is extremely sluggish, different parties fighting over and over until the next crisis appears. We have to make public sector as efficient als private sector, or the private sector will take over the public one.
i really hate my job as a programmer after hearing that guy at 46:48, i'm missing the real world so much, so much has been wasted, more than 12 hrs a day just starring at the screen and cracking my head over some ridiculous algorithm requested by the customer
The circular-referencing (along with the spelling and use of split infinitives) in your post is not only laughable, but comes close to warranting no response at all. Yet, the arrogance exuding from your first two words irked me. The point which you sought to refute was, in short, that quantifying risk IS productive. You're assertion that it is in fact NOT productive, was...profound. Thank you. If I could only make sense of the remaining drivel...
all you need is a thesis/argument about what the future will bring. You use data, anecdotal or quantitative facts, then you make a bet. To use only mathematical modeling using only quantitative data, where you measure human behavior with a constant, then you are screwed. I'd rather bet on a man who trades on in-depth substantive analysis about what we are trading.
@daweiatwork No, it isn't fair. Wealth is fine, but with a true graduated taxation and a high min. wage. I was on a train 2nd class visiting home in the US prior to 2000 and talking finance with a guy. Raising my voice: "no one should be able to make billions!". I could feel the resistance around me to such an "unAmerican" statement. People didn't look too well off: beneficiaries of "trickle down" econ.? Very important doc., but only part of the story.
@SalsaTiger - True that we need financial markets.
Unfortunately, with the advent of deregulation... all of the sociopaths came out to play'. They have used hellishly sophisticated contracts and formulas successfully to HIDE the actual risk or dimish the appearance of risk and trick innocent investors into buying trillion$ of toxic crap.
Millions have been seriously hurt by this massive fraud (derivatives, CDO's) and the greatest wealth transfer has now taken place. The damage is done.
James Sinclair has said: The formulas established by these people, regarding settlement & risk (for derivatives, etc) often times resembled... "a cartoon".
The assumption behind a lot of this stuff was that "no matter what happened" (i.e. no matter how craZy or unworkable/unrealistic these formulas were) the markets would "work things out" & everything would "balance out".
These formulas were also perverted further to hide risk in many cases. This was done to make Wall Street thugs rich.
I once read an interview with a gold trader and survivor of the Nazi death camps in Forbs. The most interesting he had to relate was that when he was on the train going to the death camp, he saw a guy trade a bag of diamonds for a drink of water.
One day, if we survive extinction and become a cosmic civilization, we´ll look back at this era and remember these people as "economic alchemists" and call this economy simply "Economy Alchemy"!...
Islandia also crashed in 2008 without the quants and wallstreet formulas!, with AAA calification. Einstein does not create the atomic bomb, the government institutions create it and release it, in the same way the banking deregulation and greed are the real minds behind meltdown and they release the weapons of mass destruction (W. Buffett) CDOs, derivatives...
wow, these guys really do not respect the profession. I agree, yeah you're making a LOT of money, its like the emotions in the movie 21, you get money, you feel high. You create a mathematical framework and make some more money, you get high but in the end, who cares? It's only money, they worship it for god sakes. These people live, eat, breath and sleep money. What's the point? I'd get my few million and just leave forever and never look back. That world looks profoundly depressing.
@sharpezor i know what you mean but these ppl want liquid money. Money to buy their own island ,jet, building, yacht, restaurant. Call me a commie bastard if you like but if everyone started at 1 million dollars the world would not be in such condition as it is today. The world is not enough
"Other countries that have not seen some of the problems in their financial markets that we have nevertheless don't separate between investment banks and commercial banks," he said, citing Canada as one example in that area. That he is Barack Obama. Lets hope he clamps down on W$ next term.
IF ALL YOU NERDY FAGGOTS WERE DEAD NO ONE WOULD NO THE DIFFERENCE! KEEP TRADING OFF GOOGLE SEARCH ALGOS, HOPE YOUR THE LAST MAN OUT OF NFLX! DROP DEAD!
The funny part is that the guy with the oysters thinks his farming is so much different from "gambling at wallstreet" all the while he obviously didn't understand the risk involved in his harvest this year. Of course, for him it doesn't matter, but imagine slashing in half a 100,000$ revenue stream in half if you have to live off it...
The sad thing is that most people - even in the field themselves - don't get why financial markets benefit the economy. I would hazard a guess that the growth we have seen in the last century, with all the achievements in computers, space travel and even in the arts, would have been impossible without markets. It is a philosophical point, but if you experiment with a simple coin flip game and the "gambler's ruin" idea, you see why quantifying risk is crucial for society.
@raybanfandom I don't believe in balance of wealth as any kind of measure. I think one should be concerned more about suffering. Much has to be done, still, but we are on a good way in that regard. About 3-4 centuries ago, almost every human on earth faced the risk of starvation, early death because of illnesses or child birth etc., so there was a lot of improvement. What will help the people of Africa for example is not generousity alone but assistance in replicating the success.
Earth has always provided food with abundance. The only reason there was starvation 4 centuries ago and the only reason there is starvation now comes down to ownership of land and an unfair distribution of resources. Native Americans weren't starving but serfs in manors were. Feudalism vs. harmony. All this progress amounts to being lazy, getting fat, destroying order. The financial market is the opposite of living within our means, the opposite of harmony. It will not last.
@raybanfandom No, please don't romanticise native cultures. They had a huge amount of risk in their living, much of it related to nutrition. Only through cultural advances did that improve. And why didn't they have the population growth of Europe? Not because of contraceptives or chastity, for sure. Feudalism was very bad in terms of risk management. The aristocracy however didn't so much exploit their underlings, it was more a matter of not starving when the underlings did.
I'm talking about give and take. The rich will only get richer while the poor will continue on a downward spiral. The aristocracy exist because there are "underlings" as you put it. I don't romanticize native cultures as much as respect their long forgotten way of living, which was to live in harmony with nature. A tiger or bear might have eaten you before, but no one centuries ago worried about nuclear radiation or a stock market crash. Death in the 21'st century is still death.
@raybanfandom except you don't die from nuclear radiation or a stock crashes. I call that high-class worries. Native cultures had short lifespans, frequent famines, terrible teeth, high infant death, high probability of women dying in childbirth.... I don't even accept the theory that the poor are on a downward spiral, quite the opposite in fact. Even respect for nature... the Aborigines burned down the better part of Australia....
People die from nuclear radiation. Cancer and tumors. People die from stock crashes. Rise in crime. War. Those are called facts. Native cultures died from things we can cure or prevent, true, but they do it naturally. Modern day death comes from cancer, hearth disease, and violence, none of which have been as high as the present time. The Aborigines had a nice thing going on until the white man came and killed them or put them aside, treating them like trash. We have no future.
@SalsaTiger83 the financial markets in their current state DO NOT benefit the economy, the finance industry should be there to SERVE other industries, not the other way round as it currently is
@MrBakewellTart There is no economy as we know it without financial markets. The US and Europe would look like the UDSSR before Glasnost. No part of the economy serves another, and the reason that the financial industry makes so much money is that it takes very smart and industrious people to run it and they do generate some value. Otherwise people would not invest in stocks, they would not sell or buy globally and the would just go back to living like 2000 years ago if they prefer.
Absolutely incorrect. There is nothing wrong with making attempts to quantify things, but to largely re-balance society on an almost entirely non-productive industry based on paper shuffling isn't smart or adventacious. Money lending can come from various areas; a bank, a friend, a venture capitalists or even the state. Doesn't appear they did a great job the last time they attempted at quantifying risk for themselves or their firms. Less the bailouts they are bankrupt.
You should get out more. Get air, sun, and be more sociable. Hope this helps you understand how abrasive you sound. I have no doubts that you might be a bit awkward and very rude in person.
blaming the quants now are we? atleast the quants created a software a product. traders were selling worthless crap as if they held a high value when some things they were trading were not worth their trade value. i so want to be a quant now. lol most of them are asians and europeans.
The sayings of Paul Wilmott, E. Derman, Mike Oszinski and the the guy from Reuters are extremly intelligent. Its sort of funny cause Wilmott was forewarning of a flash crash and the documentary was posted before May 6, 2010 which was the day of the flash crash. Btw, economics is a social science, look it up and there are alot of quant fund/shops that outperform over time - DE Shaw, Ren Tech, Jane Street Capital, etc. These guys are the creme de la creme of academics..
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@yjfoo23 no, because there is no theoretically sound way to define value. as is the case with many assets. gold, for example, derives most of its value from investor's perception about its value. it is a psychological asset. many other types of assets derive their value from (changing) customer tastes. to produce THOSE assets you use resources. these resources in turn become psychological assets themselves. dont stress yourself trying to figure out a "fair" value for things.
@CheaterNLaw I'm not stressing myself! I'm just saying that price should represent value and in the long run it does. I never said value ISN'T psychological. So, that's why I am sure one cannot calculate price to the exact amount and be right every time. You'd be insane to do it like the quants are doing. But I do believe you can estimate value by looking at historical records in terms of batering. You should get a pretty good idea of the value of each item in terms of another item.
@yjfoo23 no thats false, because historical returns themselves were biased by tastes, interest rates, prevalent fears and optimism about the economy. Listen to what Derman says, because he knows what he's talking about. The problem is no the model itself because if somebody is not using the model as intended you can make money out of this fool. Nobody is using Black-Scholes in practise to price options, like nobody(not anymore) is using Gaussian copula to price CDS.
@yjfoo23 cont. Gaussian copula was a convenient way to deceive investors by showing correlations between defaults, but in essence the chance of a default happening can never be captured by correlations. Thus, it was all the matter of wrong incentives. People had the incentives to the models as UNintended to make the investors believe that it is worth putting their money in really crappy deals like CDS stuffed with subprime mortgages.
@CheaterNLaw Enough talk! Show me one quant fund that's outperformed the market time over time? You and I both know that Long term Cap failed, Renaissance tech lost tonnes in 08, and yet I can tell you that Jimmy Rogers and other fundamentalists who don't rely on quants makes tonnes of money again and again and again. So.....
@yjfoo23 over time, nobody outperforms the market. you have some very weird understanding of what quants do. you dont price a CDO to "outperform a market," you do that because there is a demand from the investors to buy prepackaged mortgages and the quant and his employer get their % from that deal. oh and regarding RT, their Medallion fund to this day is still one of the most profitable in history.
@CheaterNLaw The demand for CDOs were artificial created by the FED's easy money policy. Did the quants know that? NO! They don't know shit about economics to see it through. That's why they didnt's see the collapse coming. Artificial booms and busts are easy to spot by market fundamentalist while mystified by the mathematicians! Oh and regarding RT, I know they're heavily invested in the states and maybe europe, and when USD collapse they'll lose it all!
@yjfoo23 you sound more and more like an idiot. how much did you make investing in your fundamentals? again you really have no fucking clue what quants do. you read popular journalism and think that you understand their craft. Secondly, Economics is not even a science(I also have BSc in econ.), and anyone who understands mathematics will be able to understand economic processes, whereas you can have your degree in management, econ or whatever and be completely hopeless with math.
@CheaterNLaw I sound like an idiot to u only because u're too foolish to comprehend what I'm saying! We're living in the most interesting time in history and u can't even appreciate it! Lol! Anyone who has their savings in the stock market in general or paper money or Western world govn't bonds are gonna have their purchasing power transferred to GOLD and SILVER owners. Brace urself dumbdumb, gold is going to $12,000 to meet the Dow/Gold ratio of one to one.
@CheaterNLaw Lol, I can see your regretting sorry shit face in 5 yrs when u've lost all your wealth trading stocks using quant techniques and in paper currencies! And u know what? That's exactly what u deserve, dumbdumb!
@yjfoo23 gold at 12k... ahahahahah. yes, please, put all your savings, take a mortgage on your house(in case you're not living in your parents basement) and put everything into gold. then, you stupid piece of shit, wait till Paulson liquidates his gold holdings. then you, along with other scrubs, will cry at Mr. Paulson and his quants for being intellectually superior to you. I ignored you for I am too smart to converse with stupid fucks like you.
@CheaterNLaw I do have all my wealth in Gold and Silver, dumbdumb! And I've outperformed Paulson and RT for the past 2 yrs. Of course, u worthless keyenesian economics education would never allow u to understand why that's so!
@jainamshah007 Can you trade farmland like a medium of exchange? Can you buy one cow with farmland? You could buy a bunch of cow with farmland, but what if you just want one? What if the cow owner wants a something else? Farmland is no medium of exchange. Money is. Without $ you go back to barter. Gold is money by market choice, not gov't decree, for 5000 years, and there's a reason for that. Gold and Silver have all the characteristics of money and nothing else even come close.
@jainamshah007 you can trade milk but can you store it for centuries? One of the characteristics of money is store of value. Gold is inert to chemical reactions. That's one reason why its the perfect money. Nothing else even come close except silver.
@jainamshah007 Do you know that is exactly what the big financial firms have been doing? They have been investing in farmland in places like Iowa. They know there is another crash coming and this time it will be worse - and that food is becoming a global crisis also. You are right on the money there.
@T1Brit i know, in U.S. land is so cheap, i am from india and here land is very costly average person cant even think of buying land, if you buy land dont buy it at same place or state, best way put is slice your money in 10 parts and buy 10 different good land in different part of the country because you cant move land and also 10 to 15% of gold is good idea just to hedge it all as for long as human race gold is use to hedge
@jainamshah007 Yes I heard an amazing fact about gold. Apparently, an ounce of gold still buys exactly the same amount of goods as it did in Roman times - a good suit, pair of shoes, and a belt.
@jainamshah007 Warren Buffet is either a liar when he said such a thing or he's a dumbass. His father was a Gold standard proponent, and that's why Warren understood value so much better than anyone else(whether he knows it or not). Look, you can't float a weight unit(kg) or a length unit(m), or it wouldn't be accurate. Gold is the anchor for all prices because gold quantity and demand is stable worldwide. When you have a floating ex-rate, no one can value things accurately.
@yjfoo23 im from india and most of the people people keep here saving in gold, silver, land and stuff, my family have gold inherited from couple of century but i think gold is useful because you can carry it but ultimate raw material needed for anything is land, also investing all your saving under one asset class is dumb thing because no one knows future, gold is useful to just hedge against your other investment and you should tend to keep less then 20% of it, also did you buy gold certificate
“Some men wrest a living from nature. This is called work. Some men wrest a living from those who wrest a living from nature. This is called trade. Some men wrest a living from those who wrest a living from those who wrest a living from nature. This is called finance.” - ~ Fr. Vincent McNabb
a computer can value anything perfect, but the computer cannot predict what choices that people make, not to mention the emotional attachment to the securities they hold..
24:00 the Englishman is dead on spot ,it is the paper shufflers that are making the money and not the ones that are doing the work that brings it all about..It is a systematic backwardation against the manual labourist who should be rewarded the most but get the least after the harvest has been reaped.
@itloads making trades was legal tomrw if leverage my million to brink and short certain company share and share fall down who cares, i think what us gov, should done was to let all the bank fail and setup a national bank in interest of the people not in the bank, us gov. is bull shitting us. people by saying banks need to be save no in reality people are needed to be save
This is just absurd. And somehow morbidly laughable considering what the core of the financial world actually intails. A series of blackboxes reacting to false Google-rumours?! Wall Street and it's international lackeys has always been a playground for the worst kind of blind greed, and now it's exploiting brilliant minds who should be set on developing something that's actually worth something, to ALL of us, in the real world. Instead it's all turned into a giant global pissing contest.
@naaaf Mathematic and logic could not explain everything because of one major actor in the economic world: humans. Economy is build, in part, on trust and on human psychology. Mathematic is difficult to understand fear and how people or cow react to it. Think about it: there are 15 bird on a lawn, I came and I shoot one. How many living bird are still on the lawn? What about none, they are all gone because of fear?
@riverlioness the mathematical model calculate the derivative value of items (such as house price and such).
But is this a good thing?? is it good to have formula that set the value of things?
Problem is: You are modeliing something that could change, things like house price is not a physical law, and you might over-estimate or under-estimate the value of these things.
Unfortunately you are determining the market with this thing.
These Quant techniques should be used as a risk management not as a pure play on investments, Reducing the risk of asset correlation is still an important part of the asset management business. Gotta know what you own. Have to understand the human nature behind some of these quant risk management products.
I hear a lot of people expressing their guilt about their bad deeds, but I have yet to find one who offered to return a dime of their ill gotten gains. BTW, not every one fell for the scams...some of us decided NOT TO PARTICIPATE, when we could have done so, quite profitably.
What he said @2:36 and @3:12 messed with my head a bit. But I get it. I think he is basically speaking on the flexibility of the math that is used in Finance. And how it can be 'manipulated' so to speak without actually being wrong. Someone smart help me out : )
(39:10 - 39:15) Is that comment correct, i was under the impression electrons couldn't move faster than around 65% of the speed of light. I'm assuming the connection is by wire, i suppose wireless signals are different.
"The value 0.59c is used for twisted-pair cabling, where c stands
for the speed of light in a vacuum, which is 300,000 km/s, or 186,282 mi/s.
@MustardMushroom: signal in the ethernet cable is EM wave, just like optical fiber. Physical upper limit for the information transfer is c. In plastic/quartz fiber or ethernet it is around 2/3c. I guess you forgot your Physics 101.
The primary negative effect of the quants was not the extra-ordinary mis-pricing of risk (Gaussian constant volatility vs heavy tailed fluctuations w/ clustering & nonlinear codependency etc), it was the systemic fragility induced by synchronizing the system coupled with risk averse agents that suffer from informational imperfections
39:20 Two months after Wilmott mentions the "next crash could be within minutes", it happened. Being an algo trader myself, the "speed" of markets is always increasing - it takes less and less time to make the same wave pattern.
the financial bubble has nothing to do with quants, big banks got greedy and just wanted more money and when the whole thing went wrong they knocked at uncle sam's door: euh we f@cked up give us some money.
do drug dealers give loans to drug addicts? No, then explain to me how people with shitty jobs suddenly became house owners????
@gryphonV8 The financial bubble and the collapse had alot to do with quants! Who do you think designed synthetic CDOs? Who do you think figured out the weaknesses of the ratings agencies rating models and designed both synthetic and normal CDOs to receive AAA (risk free) ratings. By 2006 most of these AAA synthetic CDOs derived their value from credit default swaps on bb- rated CDOs. Who understood the assumptions of insurance company models and passed on the risk through swaps. Quants.
I agree somewhat. But, these Quants did not trick the Financial rating agencies. They are paid BY the people who created the 'products' they rate. Rating agencies were knowingly complicit (just like in the case of Enron). The triple A ratings benefited the rating agencies also. If the rating agency gave let's say Goldman a bad rating. Goldman would take their business elsewhere so to speak.
I don't agree with you lumaix they're mathematicians they were manipulating numbers to do the task that was asked of them. I could well be wrong, but it all sounds like excuses to me-no offence meant friend :) Greed drives these people I believe.
Oh. My. God. Those guys are talking bullshit all the time and are portrayed as geniuses. But the fucking aren't. They are NOT. All the math they are showing you in this documentation is stuff you learn in your first semester as a computer scientist.
@Alhazred2 Your comment says a lot about your knowledge in the field of mathematical finance. Have you heard the expression "Speech is silver, silence is gold!". In your case speech should not be priced equally with a commodity such as silver. (I know that it is just an expression but anyways.) All I'm saying is that in your case you obviously don't have the slightest idea or clue what you are talking about!
The most stupid documentary I've ever seen, totally a waste of time (I watched till the end in order to be sure about it) ... Totally irrelevant with reality. Director's scarce of knowledge about world of finance is obvious. Quarts are unnecessary people. They are not alchemists, they are just temporary fools of Wall Str. Due to their applications ,they are no different then tech analysts of 1920s.
One of the examples as mentioned in the film is sub prime mortgage repackage into a later vehicle of investment. But why are you so neatly forgetting to mention the whole existence of sub prime is due to government interference. If not for FDIC, and reinvestment act, those vehicles of investment wouldn't exist in such damning numbers to start with. I would hope they would be a bit more honest, or be able to look beyond their own mathematical models.
Acutally it's a threefold problem where all come together to produce these unviable instabilities. Firstly, the artificial "fundings" of mortgages as you describe to have something to work on. Secondly disrespecing real system thinking by violently reducing complexity, forgetting about dynamics and/or cutting away interactions. And thirdly, incentives on shareholder value alone.
You see, all those things work together to bring a system like this alive. Emergence in a negative example.
The reasons for the current global collapse, isnt a system of "evil" incentives but rather yes, the way that CURRENT system works. Current because it is no longer a capitalist system, thus its a new system, government interventions have increased incentives while taking away many risks. In an atmosphere with no or little risks, an economical system of leverage ( stock market) will undoubtedly run amok. Take the gvt out of equation pls. it was never meant to be there in a first place
Where do you think that "interference" came from? By your comments you believe it "started" with the Government. That's not true. Let's just take the last 10-12 years (when Wall St compensation really grew). It was WALL STREET realizing that certain regulation prevents them from making obscene amounts of money. They then put forth a 'full court press' in regards to lobbying Congress. They bought and paid for alot of the Politicians you see. Now, that STARTED on Wall st. Look at ......
..the number of lobbyist per Congressman. Over the last 30 years it became VERY profitible for lawyers and former politicians to work for these Wall St companies and the lobbying arm of that company. Yes, there was something evil about the entire process. If I told you that a hospital in a small town financed the local politicians so that they would in turn lax any current regulations on how they do business. All the while paying off the hospital watchdogs who are supposed...
to let you know if whether or not the doctors in that Hospital have any current lawsuits pending or that the hospital has a problem with the spreading of disease (due to negligence). This started 30 years ago, really. It has been exacerbated over the last 12 years. You do not have to pay off EVERY juror in a criminal trial. But if you can pay off 2 or 3 of the 12, that will make a big difference. Excuse the analogy. Wall St. owns some of the "jurors". That's evil.
@drbayoms And it still goes to my point of government interventions. It doesnt matter how or why government intervenes and or picks winners or losers, the simple fact that it does, already distorts markets. And that is what I was talking about.
But it does matter. Look at Wall Street between 1933 and 1980. Very few instances of volatility on Wall St. Government (to some extent) kept Wall St at arms length. Wall St. manipulated DC, NOT the other way around. Because of this, you will never, ever be able to get the "bugs" out of the machine. It is forever changed. Government CAN work. You Americans allow yourselves to be manipulated by those who say "less Government" is best. Wall St. did not believe that lie, why should you.
@drbayoms And you are still talking about government being involved, once again it doesnt matter who manipulates who. If wall street thugs manipulate government, in the end it means the same, more government intrusion. You have to understand that help to certain companies is also government intrusion. The so called collusion between government and business. This propping up is called creating a bubble. We need less to none of that
You are talking in circles. Lobbying to loosen oversight and regulation IS WHAT CAUSED THIS. Your statement is ass backwards. You are suggestin that a group of thugs who cause the crash (on purpose) will be the same people to fix it. And the people who had the 'chains' on Wall St to begin with (up until 1980) are the problem? Are you serious. Do you even know why you had a bubble in 2001? Was that due to Gov intervention? Actually it was the opposite.
@drbayoms First of all, nothing has been fixed, the economy is going down the drain. And once again the money largely was insured so what chains are you talking about? The 2001 tech bubble was due to "cheap money" which has to do with fed reserve. If you can borrow at an incredibly low rate, an unfounded low rate, more investments will be made. If rate of borrowing was higher, the crash wouldnt be so bad.
Count the number of bubbles and recessions you had between 1933 and 1999. Are you done? It should not take that long. This crash was caused by those who used a rarely utilized financial product, CDO's. They looked at mortgages and said we can make more money by INCREASING the number of mortgages we give out, by bundling them. Since we will receive our cut upfront, this would be ok. They knew that by the time the bridge collapsed, they would be on the other side.
@drbayoms Go further into the root of the problem. Yes new vehicles of investments were created, but why were they bought up? The reason is because government insures bank funding. FDIC is the insurance. Meaning they can invest into anything they wish, and know that if they lose they will be repaid. Meaning the risk is taken out. If the risk was there then News vehicles of investment would not exist in such large quantities.
@drbayoms last time i checked the total value of MBS in the DTCC system was 20 trillion dollars.. half of those mbs are owned by multiple parties, and this is what the media means when they say CDO. 10 trillion dollars.
what basis do you have for claiming "CDO is rarely utilized." just because you personally do not use something, does not mean it is unused, drbayoms.
There is always danger in not having all the information. Your response is proof of that. I say that because you obviously did not read my comment on CDO's. Your 10 trillion dollar quote is the value of CDO's TODAY. Here is my quote "This crash was caused by those who used a rarely utilized financial product, CDO's". This sentence tells you I am stating that CDO's WERE RARELY UTILIZED, not they ARE RARELY UTILIZED. Were, not are. Is that clear enough. ..........
@drbayoms the video says that using CDOs for SUBPRIME mortgages is a recent innovation. CDOs in general are not a recent innovation, nor are they necessarily a bad thing. what blame and anger? perhaps you are angry for being exposed as a pseudointellectual? you probably had to look up what the DTCC is because you are an academic and have no practical experience in finance.
at 36:00 you pay more tuition fees and go into debt, and graduate with a degree in Worthlessness or MBA in Corporate Slavery.
when you have the money to lose, you lose it!
vincentyeo88 1 week ago
at 25:45 nice watch! you won't wanna lose that digging for seashells.
vincentyeo88 1 week ago
is the narrator an actor and is his story made up?
warwize 2 weeks ago
Comment removed
tilopa444 2 days ago
+++
tanysta 3 weeks ago
There are very useful natural economy models, that define the necessary change for surviving a growth crisis.
It's to realize that growth is actually a construction process, powered by its own profits. So... the solution to a growth system turning itself into a tower of Babel by overreaching its own ability to manage the complications involved, is to use the system's profits for something better. It's not the kind of thing social thinkers like, but necessary. synapse9-dot-com/signals
JessieLydia 4 weeks ago
I don't know how to heal the financial system, but from a bird's eye view I feel like we have enough smart makroeconomics and other people like political scientists who actually could produce some high quality solutions. The problem is our political system is extremely sluggish, different parties fighting over and over until the next crisis appears. We have to make public sector as efficient als private sector, or the private sector will take over the public one.
NeoCorporatism 1 month ago
The shaky hand-held camera aesthetic is god awful.
killcritter 1 month ago
i really hate my job as a programmer after hearing that guy at 46:48, i'm missing the real world so much, so much has been wasted, more than 12 hrs a day just starring at the screen and cracking my head over some ridiculous algorithm requested by the customer
die101 1 month ago
these whitemen and their white witch craft
die101 1 month ago
@tpwatson
The circular-referencing (along with the spelling and use of split infinitives) in your post is not only laughable, but comes close to warranting no response at all. Yet, the arrogance exuding from your first two words irked me. The point which you sought to refute was, in short, that quantifying risk IS productive. You're assertion that it is in fact NOT productive, was...profound. Thank you. If I could only make sense of the remaining drivel...
eclechtic 1 month ago
c'mon, this so-called financial failure has obviously been cooked from the start. c'mon!!!
67Mannheim 1 month ago
I wonder how other life forms/civilizations from other planets structure their financial system. ...
(Don't say they don't exist. I've seen enough, good, non-bullshit, material here on youtube proving their existence)
Trading with fat shiny marbles with inner galactic star systems inside them?... maybe? lol...
Oh, man! Imagine if we moved all our finance people, specially these "quarks"..
I mean.."Quants"..to their planets, Well fuck their shit up, faster than at the speed of light.. lol
TheReliefer 1 month ago
Stop the Quants, save the world.
LaughingLefty 2 months ago
@LaughingLefty Quants are defiantly not the overall problem.
OwnageEngine 2 months ago
all you need is a thesis/argument about what the future will bring. You use data, anecdotal or quantitative facts, then you make a bet. To use only mathematical modeling using only quantitative data, where you measure human behavior with a constant, then you are screwed. I'd rather bet on a man who trades on in-depth substantive analysis about what we are trading.
steps4life2 3 months ago
is it fair for financial people to earn so much ?
daweiatwork 3 months ago
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holobody 2 months ago
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holobody 2 months ago
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holobody 2 months ago
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@daweiatwork No, it isn't fair. Wealth is fine, but with a true graduated taxation and a high min. wage. I was on a train 2nd class visiting home in the US prior to 2000 and talking finance with a guy. Raising my voice: "no one should be able to make billions!". I could feel the resistance around me to such an "unAmerican" statement. People didn't look too well off: beneficiaries of "trickle down" econ.? Very important doc., but only part of the story.
holobody 2 months ago
@daweiatwork Risk vs Rewards buddy, a lot of them lose everything several times before they succeed once.
BL4ck0S 2 months ago
@MegaBhatti1987 - It was in Forbes Magazine back in 1980-81, I don't remember exactly when, but gold was really hitting big during that period.
Gtigerclaw 3 months ago
"In the end you can not fool nature"
Richard Feynman
TaoPiet 3 months ago
"Read BEN GRAHAM & PHIL FISHER" says Warren Buffett, simply the most successfull guy at playground...
So... let's read them and forget about fancy (and phony) math...
Cacacos 3 months ago
@Cacacos duh what you mean is value investing. without opinion, but this documentary has nothing to do with value investing sir
braemstabraemsta 3 months ago
@braemstabraemsta
I've noticed that, but thanks for warning anyway :D
Cacacos 3 months ago
@SalsaTiger - True that we need financial markets.
Unfortunately, with the advent of deregulation... all of the sociopaths came out to play'. They have used hellishly sophisticated contracts and formulas successfully to HIDE the actual risk or dimish the appearance of risk and trick innocent investors into buying trillion$ of toxic crap.
Millions have been seriously hurt by this massive fraud (derivatives, CDO's) and the greatest wealth transfer has now taken place. The damage is done.
DanH454 3 months ago
James Sinclair has said: The formulas established by these people, regarding settlement & risk (for derivatives, etc) often times resembled... "a cartoon".
The assumption behind a lot of this stuff was that "no matter what happened" (i.e. no matter how craZy or unworkable/unrealistic these formulas were) the markets would "work things out" & everything would "balance out".
These formulas were also perverted further to hide risk in many cases. This was done to make Wall Street thugs rich.
DanH454 3 months ago
Time to wake up. Consciousness vs Mind Control
Frekuans 3 months ago
watch slavoj zizek's comment on this !
hernamine38 3 months ago
I once read an interview with a gold trader and survivor of the Nazi death camps in Forbs. The most interesting he had to relate was that when he was on the train going to the death camp, he saw a guy trade a bag of diamonds for a drink of water.
gcglasser 4 months ago 22
@gcglasser could u tell me the name of that book?
MegaBhatti1987 3 months ago
@gcglasser
that smell like bs to me, if he was on a nazi train rest assured that he did not have any diamonds on him
MrDitto30 1 week ago
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@MrDitto30 The nazis would search them when they arrived at the camp, not when they got on the train.
tilopa444 2 days ago
33:00 Economists don't think their theories represent any sort of law...
deductionism 4 months ago
18:25 really interesting graphic and explanation
marcelozilotti 4 months ago
One day, if we survive extinction and become a cosmic civilization, we´ll look back at this era and remember these people as "economic alchemists" and call this economy simply "Economy Alchemy"!...
overdimensional 5 months ago
I like it. mARX predigo que esto iba a pasar.
XPZION7 5 months ago
Islandia also crashed in 2008 without the quants and wallstreet formulas!, with AAA calification. Einstein does not create the atomic bomb, the government institutions create it and release it, in the same way the banking deregulation and greed are the real minds behind meltdown and they release the weapons of mass destruction (W. Buffett) CDOs, derivatives...
GermanLunaP 5 months ago
Good Vid!
mrbuck1188 5 months ago
wow, these guys really do not respect the profession. I agree, yeah you're making a LOT of money, its like the emotions in the movie 21, you get money, you feel high. You create a mathematical framework and make some more money, you get high but in the end, who cares? It's only money, they worship it for god sakes. These people live, eat, breath and sleep money. What's the point? I'd get my few million and just leave forever and never look back. That world looks profoundly depressing.
sharpezor 5 months ago
@sharpezor i know what you mean but these ppl want liquid money. Money to buy their own island ,jet, building, yacht, restaurant. Call me a commie bastard if you like but if everyone started at 1 million dollars the world would not be in such condition as it is today. The world is not enough
acp1778 5 months ago
12:39
Yashop 5 months ago
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Yashop 5 months ago
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Yashop 5 months ago
What was the book at 28 mins?
RapistAsshole 6 months ago
@RapistAsshole "Frequently Asked Questions in Quantitative Finance" by Paul Wilmott
kevinvenanzi 6 months ago
@kevinvenanzi Do you know if it's worth reading?
RapistAsshole 6 months ago
this is so much higher than my level of understanding that I feel like a small child listening to an adult discussion.
AegeanKing 6 months ago
"Other countries that have not seen some of the problems in their financial markets that we have nevertheless don't separate between investment banks and commercial banks," he said, citing Canada as one example in that area. That he is Barack Obama. Lets hope he clamps down on W$ next term.
xtoreality 6 months ago
IF ALL YOU NERDY FAGGOTS WERE DEAD NO ONE WOULD NO THE DIFFERENCE! KEEP TRADING OFF GOOGLE SEARCH ALGOS, HOPE YOUR THE LAST MAN OUT OF NFLX! DROP DEAD!
HillcrestCapital 6 months ago
The funny part is that the guy with the oysters thinks his farming is so much different from "gambling at wallstreet" all the while he obviously didn't understand the risk involved in his harvest this year. Of course, for him it doesn't matter, but imagine slashing in half a 100,000$ revenue stream in half if you have to live off it...
SalsaTiger83 6 months ago
@SalsaTiger83
He never gambled on wallstreet. Nothing funny about it. He was a programmer not a "gambler".
tubebunny7 3 months ago
@tubebunny7 ok so now as a farmer he gambles more than he did before...
SalsaTiger83 3 months ago
The sad thing is that most people - even in the field themselves - don't get why financial markets benefit the economy. I would hazard a guess that the growth we have seen in the last century, with all the achievements in computers, space travel and even in the arts, would have been impossible without markets. It is a philosophical point, but if you experiment with a simple coin flip game and the "gambler's ruin" idea, you see why quantifying risk is crucial for society.
SalsaTiger83 6 months ago 10
@SalsaTiger83
We also have the most unbalanced share of the wealth and a planet that's dying. It's not going to last.
raybanfandom 6 months ago
@raybanfandom I don't believe in balance of wealth as any kind of measure. I think one should be concerned more about suffering. Much has to be done, still, but we are on a good way in that regard. About 3-4 centuries ago, almost every human on earth faced the risk of starvation, early death because of illnesses or child birth etc., so there was a lot of improvement. What will help the people of Africa for example is not generousity alone but assistance in replicating the success.
SalsaTiger83 6 months ago
@SalsaTiger83
Earth has always provided food with abundance. The only reason there was starvation 4 centuries ago and the only reason there is starvation now comes down to ownership of land and an unfair distribution of resources. Native Americans weren't starving but serfs in manors were. Feudalism vs. harmony. All this progress amounts to being lazy, getting fat, destroying order. The financial market is the opposite of living within our means, the opposite of harmony. It will not last.
raybanfandom 6 months ago 4
@raybanfandom No, please don't romanticise native cultures. They had a huge amount of risk in their living, much of it related to nutrition. Only through cultural advances did that improve. And why didn't they have the population growth of Europe? Not because of contraceptives or chastity, for sure. Feudalism was very bad in terms of risk management. The aristocracy however didn't so much exploit their underlings, it was more a matter of not starving when the underlings did.
SalsaTiger83 4 months ago
@SalsaTiger83
I'm talking about give and take. The rich will only get richer while the poor will continue on a downward spiral. The aristocracy exist because there are "underlings" as you put it. I don't romanticize native cultures as much as respect their long forgotten way of living, which was to live in harmony with nature. A tiger or bear might have eaten you before, but no one centuries ago worried about nuclear radiation or a stock market crash. Death in the 21'st century is still death.
raybanfandom 4 months ago
@raybanfandom except you don't die from nuclear radiation or a stock crashes. I call that high-class worries. Native cultures had short lifespans, frequent famines, terrible teeth, high infant death, high probability of women dying in childbirth.... I don't even accept the theory that the poor are on a downward spiral, quite the opposite in fact. Even respect for nature... the Aborigines burned down the better part of Australia....
SalsaTiger83 4 months ago
@SalsaTiger83
People die from nuclear radiation. Cancer and tumors. People die from stock crashes. Rise in crime. War. Those are called facts. Native cultures died from things we can cure or prevent, true, but they do it naturally. Modern day death comes from cancer, hearth disease, and violence, none of which have been as high as the present time. The Aborigines had a nice thing going on until the white man came and killed them or put them aside, treating them like trash. We have no future.
raybanfandom 4 months ago
@SalsaTiger83 the financial markets in their current state DO NOT benefit the economy, the finance industry should be there to SERVE other industries, not the other way round as it currently is
MrBakewellTart 4 months ago
@MrBakewellTart There is no economy as we know it without financial markets. The US and Europe would look like the UDSSR before Glasnost. No part of the economy serves another, and the reason that the financial industry makes so much money is that it takes very smart and industrious people to run it and they do generate some value. Otherwise people would not invest in stocks, they would not sell or buy globally and the would just go back to living like 2000 years ago if they prefer.
SalsaTiger83 4 months ago
@SalsaTiger83 Yeah, but this movie isn't criticizing financial markets, it's criticizing banking.
wygram 3 months ago
@SalsaTiger83
Absolutely incorrect. There is nothing wrong with making attempts to quantify things, but to largely re-balance society on an almost entirely non-productive industry based on paper shuffling isn't smart or adventacious. Money lending can come from various areas; a bank, a friend, a venture capitalists or even the state. Doesn't appear they did a great job the last time they attempted at quantifying risk for themselves or their firms. Less the bailouts they are bankrupt.
tpwatson 1 month ago
@SalsaTiger83 and how many achievements have failed to come to light, because there is no "market"?
KillerWhaleSFl 1 month ago
@TheStockfiend
You should get out more. Get air, sun, and be more sociable. Hope this helps you understand how abrasive you sound. I have no doubts that you might be a bit awkward and very rude in person.
raybanfandom 6 months ago
@raybanfandom He must be losing $ pretty badly and hence his mind too! LOL...
yjfoo23 6 months ago
@yjfoo23
You said it!
raybanfandom 6 months ago
The scientific creativity is becoming financial creativity, which is, all of it, bogus.
darcylindzon 7 months ago
blaming the quants now are we? atleast the quants created a software a product. traders were selling worthless crap as if they held a high value when some things they were trading were not worth their trade value. i so want to be a quant now. lol most of them are asians and europeans.
pakapoa 7 months ago
The sayings of Paul Wilmott, E. Derman, Mike Oszinski and the the guy from Reuters are extremly intelligent. Its sort of funny cause Wilmott was forewarning of a flash crash and the documentary was posted before May 6, 2010 which was the day of the flash crash. Btw, economics is a social science, look it up and there are alot of quant fund/shops that outperform over time - DE Shaw, Ren Tech, Jane Street Capital, etc. These guys are the creme de la creme of academics..
QuickDiamond 7 months ago
song 44:15?
res813 7 months ago
Follow "Young Financial Media" on Facebook and Twitter
Its a collaborative group that discusses current market trends, politics, and entrepreneurship to try and get a better understanding of how to manage your investments
YoungFinancialMedia 8 months ago
Quants don't know shit about economics and hence how to gauge valuation. All quants do is destroy values!
yjfoo23 8 months ago
@yjfoo23 price has nothing to do with value, darling.
CheaterNLaw 8 months ago
@CheaterNLaw Well, it should, shouldn't it! And in the long run price does represent value.
yjfoo23 8 months ago
@yjfoo23 no, because there is no theoretically sound way to define value. as is the case with many assets. gold, for example, derives most of its value from investor's perception about its value. it is a psychological asset. many other types of assets derive their value from (changing) customer tastes. to produce THOSE assets you use resources. these resources in turn become psychological assets themselves. dont stress yourself trying to figure out a "fair" value for things.
CheaterNLaw 7 months ago
@CheaterNLaw I'm not stressing myself! I'm just saying that price should represent value and in the long run it does. I never said value ISN'T psychological. So, that's why I am sure one cannot calculate price to the exact amount and be right every time. You'd be insane to do it like the quants are doing. But I do believe you can estimate value by looking at historical records in terms of batering. You should get a pretty good idea of the value of each item in terms of another item.
yjfoo23 7 months ago
@yjfoo23 no thats false, because historical returns themselves were biased by tastes, interest rates, prevalent fears and optimism about the economy. Listen to what Derman says, because he knows what he's talking about. The problem is no the model itself because if somebody is not using the model as intended you can make money out of this fool. Nobody is using Black-Scholes in practise to price options, like nobody(not anymore) is using Gaussian copula to price CDS.
CheaterNLaw 7 months ago
@yjfoo23 cont. Gaussian copula was a convenient way to deceive investors by showing correlations between defaults, but in essence the chance of a default happening can never be captured by correlations. Thus, it was all the matter of wrong incentives. People had the incentives to the models as UNintended to make the investors believe that it is worth putting their money in really crappy deals like CDS stuffed with subprime mortgages.
CheaterNLaw 7 months ago
@CheaterNLaw Enough talk! Show me one quant fund that's outperformed the market time over time? You and I both know that Long term Cap failed, Renaissance tech lost tonnes in 08, and yet I can tell you that Jimmy Rogers and other fundamentalists who don't rely on quants makes tonnes of money again and again and again. So.....
yjfoo23 7 months ago
@yjfoo23 over time, nobody outperforms the market. you have some very weird understanding of what quants do. you dont price a CDO to "outperform a market," you do that because there is a demand from the investors to buy prepackaged mortgages and the quant and his employer get their % from that deal. oh and regarding RT, their Medallion fund to this day is still one of the most profitable in history.
CheaterNLaw 7 months ago
@CheaterNLaw The demand for CDOs were artificial created by the FED's easy money policy. Did the quants know that? NO! They don't know shit about economics to see it through. That's why they didnt's see the collapse coming. Artificial booms and busts are easy to spot by market fundamentalist while mystified by the mathematicians! Oh and regarding RT, I know they're heavily invested in the states and maybe europe, and when USD collapse they'll lose it all!
yjfoo23 7 months ago
@yjfoo23 you sound more and more like an idiot. how much did you make investing in your fundamentals? again you really have no fucking clue what quants do. you read popular journalism and think that you understand their craft. Secondly, Economics is not even a science(I also have BSc in econ.), and anyone who understands mathematics will be able to understand economic processes, whereas you can have your degree in management, econ or whatever and be completely hopeless with math.
CheaterNLaw 7 months ago
@CheaterNLaw I sound like an idiot to u only because u're too foolish to comprehend what I'm saying! We're living in the most interesting time in history and u can't even appreciate it! Lol! Anyone who has their savings in the stock market in general or paper money or Western world govn't bonds are gonna have their purchasing power transferred to GOLD and SILVER owners. Brace urself dumbdumb, gold is going to $12,000 to meet the Dow/Gold ratio of one to one.
yjfoo23 7 months ago
@yjfoo23 you're fucking stupid cunt. here I said it. uneducated, worthless scrub and, frankly, you're not worthy my time :3
CheaterNLaw 7 months ago
@CheaterNLaw Lol, I can see your regretting sorry shit face in 5 yrs when u've lost all your wealth trading stocks using quant techniques and in paper currencies! And u know what? That's exactly what u deserve, dumbdumb!
yjfoo23 7 months ago
@yjfoo23 gold at 12k... ahahahahah. yes, please, put all your savings, take a mortgage on your house(in case you're not living in your parents basement) and put everything into gold. then, you stupid piece of shit, wait till Paulson liquidates his gold holdings. then you, along with other scrubs, will cry at Mr. Paulson and his quants for being intellectually superior to you. I ignored you for I am too smart to converse with stupid fucks like you.
CheaterNLaw 7 months ago
@CheaterNLaw I do have all my wealth in Gold and Silver, dumbdumb! And I've outperformed Paulson and RT for the past 2 yrs. Of course, u worthless keyenesian economics education would never allow u to understand why that's so!
yjfoo23 7 months ago
@yjfoo23 i will say by as much of farmland you can...instead of gold you cant eat gold
jainamshah007 6 months ago
@jainamshah007 Can you trade farmland like a medium of exchange? Can you buy one cow with farmland? You could buy a bunch of cow with farmland, but what if you just want one? What if the cow owner wants a something else? Farmland is no medium of exchange. Money is. Without $ you go back to barter. Gold is money by market choice, not gov't decree, for 5000 years, and there's a reason for that. Gold and Silver have all the characteristics of money and nothing else even come close.
yjfoo23 6 months ago
@yjfoo23 you can trade milk, soy, corn, so many thing, gold is use to hedge the money not as a money
jainamshah007 6 months ago
@jainamshah007 you can trade milk but can you store it for centuries? One of the characteristics of money is store of value. Gold is inert to chemical reactions. That's one reason why its the perfect money. Nothing else even come close except silver.
yjfoo23 6 months ago
@yjfoo23 can you eat gold
jainamshah007 6 months ago
@jainamshah007 Are you suppose to eat money? LOL...
yjfoo23 6 months ago
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fvgdfbdokd 6 months ago
@jainamshah007 Do you know that is exactly what the big financial firms have been doing? They have been investing in farmland in places like Iowa. They know there is another crash coming and this time it will be worse - and that food is becoming a global crisis also. You are right on the money there.
T1Brit 6 months ago
@T1Brit i know, in U.S. land is so cheap, i am from india and here land is very costly average person cant even think of buying land, if you buy land dont buy it at same place or state, best way put is slice your money in 10 parts and buy 10 different good land in different part of the country because you cant move land and also 10 to 15% of gold is good idea just to hedge it all as for long as human race gold is use to hedge
jainamshah007 6 months ago
@jainamshah007 Yes I heard an amazing fact about gold. Apparently, an ounce of gold still buys exactly the same amount of goods as it did in Roman times - a good suit, pair of shoes, and a belt.
T1Brit 6 months ago
@jainamshah007 Warren Buffet is either a liar when he said such a thing or he's a dumbass. His father was a Gold standard proponent, and that's why Warren understood value so much better than anyone else(whether he knows it or not). Look, you can't float a weight unit(kg) or a length unit(m), or it wouldn't be accurate. Gold is the anchor for all prices because gold quantity and demand is stable worldwide. When you have a floating ex-rate, no one can value things accurately.
yjfoo23 6 months ago
@yjfoo23 im from india and most of the people people keep here saving in gold, silver, land and stuff, my family have gold inherited from couple of century but i think gold is useful because you can carry it but ultimate raw material needed for anything is land, also investing all your saving under one asset class is dumb thing because no one knows future, gold is useful to just hedge against your other investment and you should tend to keep less then 20% of it, also did you buy gold certificate
jainamshah007 6 months ago
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i would say buy as much farm land you can cause you cant eat gold
jainamshah007 6 months ago
“Some men wrest a living from nature. This is called work. Some men wrest a living from those who wrest a living from nature. This is called trade. Some men wrest a living from those who wrest a living from those who wrest a living from nature. This is called finance.” - ~ Fr. Vincent McNabb
ChampionMobile 8 months ago
a computer can value anything perfect, but the computer cannot predict what choices that people make, not to mention the emotional attachment to the securities they hold..
winstonchurchil1945 8 months ago
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Forex Trading 1985 -------> /watch?v=KACDo519ccY
raducumuculucu 8 months ago 6
24:00 the Englishman is dead on spot ,it is the paper shufflers that are making the money and not the ones that are doing the work that brings it all about..It is a systematic backwardation against the manual labourist who should be rewarded the most but get the least after the harvest has been reaped.
CrashMarket 8 months ago
I wanna be a quant...:/
stupidfleshmonkies 9 months ago
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@stupidfleshmonkies you wont be
CheaterNLaw 9 months ago
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Really enjoyed you video informative. When you have time come visit my channel!
pheromoneaction 9 months ago
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Really enjoyed you video informative. When you have time come visit my channel!
TheHcgdietplan 9 months ago
I do not understand why we cant find out who was making does trades before the crash.....they obviously caused it!?!
itloads 9 months ago
@itloads making trades was legal tomrw if leverage my million to brink and short certain company share and share fall down who cares, i think what us gov, should done was to let all the bank fail and setup a national bank in interest of the people not in the bank, us gov. is bull shitting us. people by saying banks need to be save no in reality people are needed to be save
jainamshah007 6 months ago
Oh, and please, spare me the "go back to russia you socialist bastard" comments.
Have a nice day.
naaaf 9 months ago
This is just absurd. And somehow morbidly laughable considering what the core of the financial world actually intails. A series of blackboxes reacting to false Google-rumours?! Wall Street and it's international lackeys has always been a playground for the worst kind of blind greed, and now it's exploiting brilliant minds who should be set on developing something that's actually worth something, to ALL of us, in the real world. Instead it's all turned into a giant global pissing contest.
naaaf 9 months ago
@naaaf Mathematic and logic could not explain everything because of one major actor in the economic world: humans. Economy is build, in part, on trust and on human psychology. Mathematic is difficult to understand fear and how people or cow react to it. Think about it: there are 15 bird on a lawn, I came and I shoot one. How many living bird are still on the lawn? What about none, they are all gone because of fear?
therrydicule 9 months ago
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stupidfleshmonkies 9 months ago
@therrydicule a very thought provoking comment
gigijbijbj 4 months ago
These financial mathematical models are not top secret information. It is not as obscure as presented.
riverlioness 9 months ago
@riverlioness the mathematical model calculate the derivative value of items (such as house price and such).
But is this a good thing?? is it good to have formula that set the value of things?
Problem is: You are modeliing something that could change, things like house price is not a physical law, and you might over-estimate or under-estimate the value of these things.
Unfortunately you are determining the market with this thing.
Its superficial.
You loose/win money for something imaginary.
xponen 8 months ago
@xponen lol mathimatical models change the values of things. They are not stagnant. Its not about the imaginary, its about the money.
therealbuba 8 months ago
These Quant techniques should be used as a risk management not as a pure play on investments, Reducing the risk of asset correlation is still an important part of the asset management business. Gotta know what you own. Have to understand the human nature behind some of these quant risk management products.
TheMburke365 10 months ago
"Once I dreamt of doing PURE science .... working on rocket-ships, working at a small start-up company."
LOL yeah right that is pure science
airbus001 10 months ago
What library is that around 30:25 ? NYU or Columbia?
airbus001 10 months ago
these guys probably didnt do THAT well in finance... if they got filthy rich they wouldnt be talking here but still work the markets
smeltman 10 months ago
I hear a lot of people expressing their guilt about their bad deeds, but I have yet to find one who offered to return a dime of their ill gotten gains. BTW, not every one fell for the scams...some of us decided NOT TO PARTICIPATE, when we could have done so, quite profitably.
carloscastilla 10 months ago
18:23 nails it
ultraverydeepfield 10 months ago
What he said @2:36 and @3:12 messed with my head a bit. But I get it. I think he is basically speaking on the flexibility of the math that is used in Finance. And how it can be 'manipulated' so to speak without actually being wrong. Someone smart help me out : )
drbayoms 10 months ago
(39:10 - 39:15) Is that comment correct, i was under the impression electrons couldn't move faster than around 65% of the speed of light. I'm assuming the connection is by wire, i suppose wireless signals are different.
"The value 0.59c is used for twisted-pair cabling, where c stands
for the speed of light in a vacuum, which is 300,000 km/s, or 186,282 mi/s.
300,000 km/sec * 0.59 = 177,000 km/sec "
MustardMushroom 11 months ago
@MustardMushroom: signal in the ethernet cable is EM wave, just like optical fiber. Physical upper limit for the information transfer is c. In plastic/quartz fiber or ethernet it is around 2/3c. I guess you forgot your Physics 101.
angel1977ch 10 months ago
@angel1977ch
The quote is taken from a different website. That's why i asked because i didn't know, i guess you left your manners in the womb.
So 2/3c = 199 861 639 m / s, which isn't the speed of light.
MustardMushroom 10 months ago
what's the name of the son starting at 43:28?
brianlfriel 11 months ago
Watching this just made me want to be a Quant more. Lol.
10243406 11 months ago
The primary negative effect of the quants was not the extra-ordinary mis-pricing of risk (Gaussian constant volatility vs heavy tailed fluctuations w/ clustering & nonlinear codependency etc), it was the systemic fragility induced by synchronizing the system coupled with risk averse agents that suffer from informational imperfections
axe863 11 months ago
The mathematics used in this video is so idiotic. Gaussian dynamics, linear co-dependencies... lol
axe863 11 months ago
@axe863 the mathematics can't be idiotic.
people are idiotic.....
mrlonely08 11 months ago
@mrlonely08 Youre right... I shouldnt have said it like that.... Thanks :)
axe863 11 months ago
Very interesting.
firemarshall007 11 months ago
39:20 Two months after Wilmott mentions the "next crash could be within minutes", it happened. Being an algo trader myself, the "speed" of markets is always increasing - it takes less and less time to make the same wave pattern.
infiltr80r 11 months ago 2
'Thats a $ 100.000...you know, ofcourse I live off intrest..you know...so..I dont..this is nice to have I made some pocket money etc. etc.'
046jockey 1 year ago
the financial bubble has nothing to do with quants, big banks got greedy and just wanted more money and when the whole thing went wrong they knocked at uncle sam's door: euh we f@cked up give us some money.
do drug dealers give loans to drug addicts? No, then explain to me how people with shitty jobs suddenly became house owners????
gryphonV8 1 year ago
@gryphonV8 The financial bubble and the collapse had alot to do with quants! Who do you think designed synthetic CDOs? Who do you think figured out the weaknesses of the ratings agencies rating models and designed both synthetic and normal CDOs to receive AAA (risk free) ratings. By 2006 most of these AAA synthetic CDOs derived their value from credit default swaps on bb- rated CDOs. Who understood the assumptions of insurance company models and passed on the risk through swaps. Quants.
mikeyooh7 11 months ago
@mikeyooh7
I agree somewhat. But, these Quants did not trick the Financial rating agencies. They are paid BY the people who created the 'products' they rate. Rating agencies were knowingly complicit (just like in the case of Enron). The triple A ratings benefited the rating agencies also. If the rating agency gave let's say Goldman a bad rating. Goldman would take their business elsewhere so to speak.
drbayoms 10 months ago
17:43 - This is the krux of human nature interacting with the financial market..
hwy9nightkid 1 year ago
13th minute
what's the song?
Paul20101111 1 year ago
@Paul20101111 It's from Clint Mansell's soundtrack to the film "Moon," which is quite good.
tenementpalm 11 months ago
@Paul20101111 it's from Clint Mansell's soundtrack for the film "Moon"
tenementpalm 11 months ago
I don't agree with you lumaix they're mathematicians they were manipulating numbers to do the task that was asked of them. I could well be wrong, but it all sounds like excuses to me-no offence meant friend :) Greed drives these people I believe.
MrRALPHY15 1 year ago
Oh. My. God. Those guys are talking bullshit all the time and are portrayed as geniuses. But the fucking aren't. They are NOT. All the math they are showing you in this documentation is stuff you learn in your first semester as a computer scientist.
Alhazred2 1 year ago
@Alhazred2 Your comment says a lot about your knowledge in the field of mathematical finance. Have you heard the expression "Speech is silver, silence is gold!". In your case speech should not be priced equally with a commodity such as silver. (I know that it is just an expression but anyways.) All I'm saying is that in your case you obviously don't have the slightest idea or clue what you are talking about!
SlimSlick1 1 year ago
@Alhazred2 I'm sure there're not showing off their most groundbreaking theoretical stuff, just showing examples of what quantitative analysis is....
benzbubblecat 1 year ago
The most stupid documentary I've ever seen, totally a waste of time (I watched till the end in order to be sure about it) ... Totally irrelevant with reality. Director's scarce of knowledge about world of finance is obvious. Quarts are unnecessary people. They are not alchemists, they are just temporary fools of Wall Str. Due to their applications ,they are no different then tech analysts of 1920s.
Nachry 1 year ago
@Nachry
You obviously do not work on Wall Street. The genie is out of the bottle.
whizonit 1 year ago
fantastic! this represents the same view that I have about the micro world of finance ever since.
ThaFacka 1 year ago
One of the examples as mentioned in the film is sub prime mortgage repackage into a later vehicle of investment. But why are you so neatly forgetting to mention the whole existence of sub prime is due to government interference. If not for FDIC, and reinvestment act, those vehicles of investment wouldn't exist in such damning numbers to start with. I would hope they would be a bit more honest, or be able to look beyond their own mathematical models.
samuils 1 year ago
@samuils
Acutally it's a threefold problem where all come together to produce these unviable instabilities. Firstly, the artificial "fundings" of mortgages as you describe to have something to work on. Secondly disrespecing real system thinking by violently reducing complexity, forgetting about dynamics and/or cutting away interactions. And thirdly, incentives on shareholder value alone.
You see, all those things work together to bring a system like this alive. Emergence in a negative example.
ThaFacka 1 year ago
The reasons for the current global collapse, isnt a system of "evil" incentives but rather yes, the way that CURRENT system works. Current because it is no longer a capitalist system, thus its a new system, government interventions have increased incentives while taking away many risks. In an atmosphere with no or little risks, an economical system of leverage ( stock market) will undoubtedly run amok. Take the gvt out of equation pls. it was never meant to be there in a first place
samuils 1 year ago
@samuils
Where do you think that "interference" came from? By your comments you believe it "started" with the Government. That's not true. Let's just take the last 10-12 years (when Wall St compensation really grew). It was WALL STREET realizing that certain regulation prevents them from making obscene amounts of money. They then put forth a 'full court press' in regards to lobbying Congress. They bought and paid for alot of the Politicians you see. Now, that STARTED on Wall st. Look at ......
drbayoms 10 months ago
@samuils
..the number of lobbyist per Congressman. Over the last 30 years it became VERY profitible for lawyers and former politicians to work for these Wall St companies and the lobbying arm of that company. Yes, there was something evil about the entire process. If I told you that a hospital in a small town financed the local politicians so that they would in turn lax any current regulations on how they do business. All the while paying off the hospital watchdogs who are supposed...
drbayoms 10 months ago
@samuils
to let you know if whether or not the doctors in that Hospital have any current lawsuits pending or that the hospital has a problem with the spreading of disease (due to negligence). This started 30 years ago, really. It has been exacerbated over the last 12 years. You do not have to pay off EVERY juror in a criminal trial. But if you can pay off 2 or 3 of the 12, that will make a big difference. Excuse the analogy. Wall St. owns some of the "jurors". That's evil.
drbayoms 10 months ago
@drbayoms And it still goes to my point of government interventions. It doesnt matter how or why government intervenes and or picks winners or losers, the simple fact that it does, already distorts markets. And that is what I was talking about.
samuils 10 months ago
@samuils
But it does matter. Look at Wall Street between 1933 and 1980. Very few instances of volatility on Wall St. Government (to some extent) kept Wall St at arms length. Wall St. manipulated DC, NOT the other way around. Because of this, you will never, ever be able to get the "bugs" out of the machine. It is forever changed. Government CAN work. You Americans allow yourselves to be manipulated by those who say "less Government" is best. Wall St. did not believe that lie, why should you.
drbayoms 10 months ago
@drbayoms And you are still talking about government being involved, once again it doesnt matter who manipulates who. If wall street thugs manipulate government, in the end it means the same, more government intrusion. You have to understand that help to certain companies is also government intrusion. The so called collusion between government and business. This propping up is called creating a bubble. We need less to none of that
samuils 10 months ago
@samuils
You are talking in circles. Lobbying to loosen oversight and regulation IS WHAT CAUSED THIS. Your statement is ass backwards. You are suggestin that a group of thugs who cause the crash (on purpose) will be the same people to fix it. And the people who had the 'chains' on Wall St to begin with (up until 1980) are the problem? Are you serious. Do you even know why you had a bubble in 2001? Was that due to Gov intervention? Actually it was the opposite.
drbayoms 10 months ago
@drbayoms First of all, nothing has been fixed, the economy is going down the drain. And once again the money largely was insured so what chains are you talking about? The 2001 tech bubble was due to "cheap money" which has to do with fed reserve. If you can borrow at an incredibly low rate, an unfounded low rate, more investments will be made. If rate of borrowing was higher, the crash wouldnt be so bad.
samuils 10 months ago
@samuils
Count the number of bubbles and recessions you had between 1933 and 1999. Are you done? It should not take that long. This crash was caused by those who used a rarely utilized financial product, CDO's. They looked at mortgages and said we can make more money by INCREASING the number of mortgages we give out, by bundling them. Since we will receive our cut upfront, this would be ok. They knew that by the time the bridge collapsed, they would be on the other side.
drbayoms 10 months ago
@drbayoms Go further into the root of the problem. Yes new vehicles of investments were created, but why were they bought up? The reason is because government insures bank funding. FDIC is the insurance. Meaning they can invest into anything they wish, and know that if they lose they will be repaid. Meaning the risk is taken out. If the risk was there then News vehicles of investment would not exist in such large quantities.
samuils 10 months ago
@drbayoms last time i checked the total value of MBS in the DTCC system was 20 trillion dollars.. half of those mbs are owned by multiple parties, and this is what the media means when they say CDO. 10 trillion dollars.
what basis do you have for claiming "CDO is rarely utilized." just because you personally do not use something, does not mean it is unused, drbayoms.
legion2 10 months ago
@legion2
There is always danger in not having all the information. Your response is proof of that. I say that because you obviously did not read my comment on CDO's. Your 10 trillion dollar quote is the value of CDO's TODAY. Here is my quote "This crash was caused by those who used a rarely utilized financial product, CDO's". This sentence tells you I am stating that CDO's WERE RARELY UTILIZED, not they ARE RARELY UTILIZED. Were, not are. Is that clear enough. ..........
drbayoms 10 months ago
@drbayoms the video says that using CDOs for SUBPRIME mortgages is a recent innovation. CDOs in general are not a recent innovation, nor are they necessarily a bad thing. what blame and anger? perhaps you are angry for being exposed as a pseudointellectual? you probably had to look up what the DTCC is because you are an academic and have no practical experience in finance.
legion2 10 months ago