TAILIEUCHUNG - Brad Feld Reviews The Lights in the Tunnel_1

Khi máy tính của họ nhanh hơn và nhanh hơn, quants có thể làm nhiều hơn và nhiều hơn nữa. Họ tạo ra các chất dẫn xuất mới lạ dựa trên sự kết hợp kỳ lạ của vật. Họ có thể phóng đại các phần thưởng và nguy cơ an ninh. | Acceleration 45 As their computers got faster and faster the quants were able to do more and more. They created new exotic derivatives based on strange combinations of things. They could magnify the reward and risk of a security. They could invert it so you gained if the security fell in value. They could even try to capture the reward if an investment increased in value but eliminate the risk if it went down or at least they thought they could. As housing prices continued to climb during the bubble the subprime loans were packaged into mortgage-backed securities so that they could be traded like bonds. This had become standard practice for mortgages. However in addition to that new types of derivatives were created based on the packaged subprime loans. Most notable were collateralized debt obligations or CDOs which attempted to siphon off the lowest risk loans and repackage them into a security that could be marketed as a high quality investment. These new derivative securities were then sold to banks and financial institutions all over the world with the understanding that they were very low risk investments. When the subprime borrowers started defaulting the value of the mortgage-backed securities plunged and the derivatives did not work as expected. In many cases it was difficult or impossible to calculate their value. In addition financial institutions had engaged in many other complex interrelationships based on exotic derivatives that were intended to help manage various risks. All this led to uncertainty that caused values to fall even more. The result Copyrighted Material Paperback Kindle available @ Amazon THE LIGHTS IN THE TUNNEL 46 was the downfall of Bear Stearns in March 2008 and the global crisis that followed The point of this of course is that it would have been impossible to create these weird derivatives without access to very powerful computers. If the subprime crisis had occurred in earlier years it would certainly have been a far smaller .

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