Plunging into the shadows: "In
thinly traded, lightly regulated and untransparent markets,
the bold can make an awful lot of money—and
they can lose it on an even more extravagant scale... In today's caffeine-fuelled dealing rooms, a barely regulated private-equity group could very well borrow money from syndicates of private lenders, including hedge funds, to spend on taking public companies private. At each stage,
risks can be converted into securities, sliced up, repackaged, sold on and sliced up again. The endless opportunities to
write contracts on underlying debt instruments explains why
the outstanding value of credit-derivatives contracts has rocketed to $26 trillion—$9 trillion more than six months ago, and seven times as much as in 2003."
posted by kliuless
on Sep 24, 2006 -
27 comments
The Logic of Diversity "A new book,
The Wisdom of Crowds [
..:] by
The New Yorker columnist James Surowiecki, has recently popularized the idea that groups can, in some ways, be smarter than their members, which is superficially similar to
Page's results. While Surowiecki gives many examples of what one might call collective cognition, where groups out-perform isolated individuals, he really has only one explanation for this phenomenon, based on one of his examples: jelly beans [
...] averaging together many independent, unbiased guesses gives a result that is probably closer to the truth than any one guess. While true — it's the
central limit theorem of statistics — it's far from being the only way in which
diversity can be beneficial in problem solving."
(Three-Toed Sloth)
posted by kliuless
on Jun 20, 2005 -
6 comments
