“Fool’s Gold” by Ms. Tett’s pt2


	“Fool’s Gold” by Ms. Tett’s pt2

hjharris

6-17-2009 11:50 AM

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<div style="margin: 12px 0px; font-family: arial; color: #333333; background: #ffffff; border: solid 4px #e5e5e5; width: 100%; clear: left;"><div class="CM_CTB_Content_Wrap" style="margin: 0px; padding: 0px;background-color: #ffffff;"><div style="border-bottom: solid 1px #dcdcdc; white-space: nowrap; margin-bottom: 8px; background-color: #eeeeee ;background-image: url(http://clipmarks.com/images/source-bg.gif); background-repeat: repeat-x; height: 24px; line-height: 24px; vertical-align: middle; padding-bottom: 4px; color: #666666; font-size: 10px;" ><a href="http://clipmarks.com/clip-to-blog/" title="see clips that are hot right now"><img src="http://content.clipmarks.com/blog_embed/e27b9e34-7cb7-4803-88e6-38ccc624c593/5D0D0C38-5F3F-402D-B4DA-94007A9205BD/" alt="" width="19" height="19" border="0" style="vertical-align: middle; margin: 0px 4px; display: inline; border: none; float:none;" /></a>clipped from <a title="http://www.nytimes.com/2009/06/16/books/16kaku.html?pagewanted=2&_r=1&th&emc=th#" href="http://www.nytimes.com/2009/06/16/books/16kaku.html?pagewanted=2&_r=1&th&emc=th#" style="font-size: 11px;">www.nytimes.com</a></div><blockquote style="text-align: left; padding: 0px 8px; margin: 4px 0px 8px 0px; background: transparent; border: none;" cite="http://www.nytimes.com/2009/06/16/books/16kaku.html?pagewanted=2&_r=1&th&emc=th#">She shows  the premium that young hotshots there placed on “innovation” and “creativity,” </blockquote><div style="height: 2px; font-size: 2px; background: #dcdcdc; border-bottom: solid 1px #f5f5f5; margin: 2px 4px;"></div><blockquote style="text-align: left; padding: 0px 8px; margin: 4px 0px 8px 0px; background: transparent; border: none;" cite="http://www.nytimes.com/2009/06/16/books/16kaku.html?pagewanted=2&_r=1&th&emc=th#">Ms. Tett describes how banks invented increasingly complex derivatives, “all based upon the fundamental premise that the default risk of bundles of mortgages had been virtually erased by the process of bundling and then slicing them” into so-called “tranches,” which were  supposed to give investors a choice of different levels of risk and return. </blockquote><div style="height: 2px; font-size: 2px; background: #dcdcdc; border-bottom: solid 1px #f5f5f5; margin: 2px 4px;"></div><blockquote style="text-align: left; padding: 0px 8px; margin: 4px 0px 8px 0px; background: transparent; border: none;" cite="http://www.nytimes.com/2009/06/16/books/16kaku.html?pagewanted=2&_r=1&th&emc=th#">Her book starkly illustrates the folly of using mathematical models to predict human behavior and the Las Vegas-like bet-making embraced by many bankers. </blockquote></div><div style="margin: 0px 6px 6px 4px;"><table style="font-size: 11px;border-spacing: 0px;padding: 0px;" cellpadding="0" cellspacing="0" width="100%"><tr><td style="background:transparent;border-width:0px;padding:0px;">&nbsp;</td><td align="right" style="background:transparent;border-width:0px;padding:0px;width:107px" width="107"><a href="http://clipmarks.com/share/5D0D0C38-5F3F-402D-B4DA-94007A9205BD/blog/" title="blog or email this clip"><img src="http://content7.clipmarks.com/images/c2b-foot.png" border="0" alt="blog it" width="107" height="17" style="border-width:0px;padding:0px;margin:0px;" /></a></td></tr></table></div></div>

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