A Credit Default Swap Was Confusing Mainly

The Model Used By Wall Street To Price Trillions Of Dollar's Worth Of Derivatives Thought Of The Financial World As An Orderly, Continuous Process. But The World Was Not Continuous; It Changed Discontinuously, And Often By Accident.

The Incentive For The Outsider Is To Attack The System Right Up To The Moment He Is Co-opted By It. The Incentive For The Insider -and This Took Some Getting Used To- Is To Allow Yourself To Be Attacked, And Then Co-opt Your Most Ferocious Attackers, And Their Best Ideas. The Effect On The System As A Whole Is To Make It More Stable, Because Everyone Winds Up Working On Its Behalf.

Above All, Recognize That If You Have Had Success, You Have Also Had Luck — And With Luck Comes Obligation. You Owe A Debt, And Not Just To Your Gods. You Owe A Debt To The Unlucky.

The Cdo Was, In Effect, A Credit Laundering Service For The Residents Of Lower Middle Class America. For Wall Street It Was A Machine That Turned Lead Into Gold.

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