Tuesday, March 24, 2009

Rolling Stone subtly blames Indians for the crisis

mar 23rd, 2009
 
i have been thinking along the same lines, to be honest. the subprime crisis is actually the revenge of the IT guys. the posh bankers with their million dollar bonuses lost control of their operations to the backroom quant-jocks, a bunch of whom are in fact indians. the rocket scientists did what they were asked to do, and the bankers soon couldn't understand what they were doing. but their greed prevented them from stopping the quant-jocks from inventing even more bizarre models.
 
this is payback, in a way, for robert clive and the raj :-) take that, anglo-americans :-)
---------- Forwarded message ----------
From: swami

http://www.rollingstone.com/politics/story/26793903/the_big_takeover/3

 

Check this out:

The problem was, none of this was based on reality. "The banks knew they were selling crap," says a London-based trader from one of the bailed-out companies. To get AAA ratings, the CDOs relied not on their actual underlying assets but on crazy mathematical formulas that the banks cooked up to make the investments look safer than they really were. "They had some back room somewhere where a bunch of Indian guys who'd been doing nothing but math for God knows how many years would come up with some kind of model saying that this or that combination of debtors would only default once every 10,000 years," says one young trader who sold CDOs for a major investment bank. "It was nuts."

 


3 comments:

Anoop's Blog said...

Its actually a doing of a good chinese man, David X. Li that caused this mess. Interesting reading. Also, this man is now works for Chinese bank and can't be reached any more...At least he didn't hang him self like others that are involved in the scam.

http://www.wired.com/techbiz/it/magazine/17-03/wp_quant

non-carborundum said...

Yes - it's the fault of Indian IT guys for applying perfect logic to the wrong assumptions furnished by these finance types. They didn't leave even a random chance of getting the right answer.

nizhal yoddha said...

very interesting, anoop. thanks. i liked that piece from wired on the chinese geek. but there was an army of s/w guys and physicists mucking around with partial differential equations. with or without this guys gaussian cupola or whatever.