G. K. Chesterton, demonstrating his genius at the art of paradox, once referred to optimism as “morbid.” Since the moment I read that (it appears in the second chapter of The Everlasting Man, I have felt in my bones that it is true, and have accordingly nurtured a healthy repugnance for the braggarts of optimism. But as with many paradoxes, it is difficult to explain | Read More »
Derivatives and human hubris.
Learning of the kinds of exotic instruments used by Wall Street in the years before the crash can be a mind-boggling experience. First, of course, because of the complexity of these things; but also because of the staggering sums of “paper wealth” they produced. AIG and other firms sold credit default swaps in such massive numbers that there was at one point insurance on over | Read More »