condo-sales-formula

We all know, of course, that this whole financial mess started with the housing market. But how did a bunch of wacky mortgages mushroom into an all-encompassing threat to the global financial system?

I’d like to call your attention to this piece in Wired magazine – entitled The Formula that killed Wall Street.

It’s a fascinating tale about one economist’s mathematical formula called “Gaussian Copula Function”, and what happened when legions of financial traders took the concept behind it and ran it into the ground. When you’re done, you should have a decent idea about what happened to our financial system and why.

“knowledge in the hands of fools will never replace wisdom”

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