Bill Roper's Journal

Along with the laws of gravity and the gods of the copybook headings. I liked this line particularly:

"In hindsight, ignoring those warnings looks foolhardy. But at the time, it was easy. Banks dismissed them, partly because the managers empowered to apply the brakes didn't understand the arguments between various arms of the quant universe. Besides, they were making too much money to stop."

or

"But no one was willing to stop the creation of CDOs, and the big investment banks happily kept on building more, drawing their correlation data from a period when real estate only went up..."

or

'Why didn't rating agencies build in some cushion for this sensitivity to a house-price-depreciation scenario? Because if they had, they would have never rated a single mortgage-backed CDO...Their managers, who made the actual calls, lacked the math skills to understand what the models were doing or how they worked."

Sure thing. They loved all the easy money based on sure-fire models that had no constant basis in reality, and built a ridiculous bubble, and congratulated each other for finding an endless source of wealth immeasurable.