The Rise Of The Financial Machines

"BEWARE of geeks bearing formulas." So saith Warren Buffett, the Wizard of Omaha. Words to bear in mind as we bail out banks and buy up mortgages and tweak interest rates and nothing, nothing seems to make any difference on Wall Street or Main Street. Years ago, Mr. Buffett called derivatives "weapons of financial mass destruction" -- an apt metaphor considering that the Manhattan Project's math and physics geeks bearing formulas brought us the original weapon of mass destruction, at Trinity in New Mexico on July 16, 1945.

In a 1981 documentary called "The Day After Trinity," Freeman Dyson, a reigning gray eminence of math and theoretical physics, as well as an ardent proponent of nuclear disarmament, described the seductive power that brought us the ability to create atomic energy out of nothing.

Read the whole story here.

Comments

[Erdgeist]

With Nixon, America dumped the 'productive economy' (manufacturing) and put in its stead, free-trade (which is really outsourcing) and free markets (financial wizardry and less regulation). Thanks Dick. It has been downhill every since 1973.

[PT6]

"FAIR MARKETS" are what made America Great for 70 years (1931 to 2000)!

Wild and Free markets have now taken TRILLIONS from the American Middle Class using Tricks:

"Illegal Naked Shorts"
"TRICK Mortgages"
"Bundled High Risk TRICK Mortgages" rated "AAA"
"Excessive Leveraging of OIL"
"Use of Bright University Students to constantly develop and program NEW TRICKS."

We must get back to "FAIR MARKETS" with regulations against all these different and clever Schemes.

[nezumi]

I don't think mathematicians are the problem. The problem is the misconception that economics busts and bubbles have anything to do with mathematics or another hard science. With money, emotions get in the way, be it greed, panic, partying, herding, laziness or the gambler's wish to look into the abyss. As my mechanic used to say: Use the right tools, /&%&§$ !!

[PT6]

Oh, this Crisis was just some accident of nature!

It had nothing to do with "c"R"ooks" or no government regulations!

I hope you enjoy your "illegal Naked Shorts" and sleep well at night

[nezumi]

Yes it was. And only to be aware of that is to prevent it from happening again.

It is very easy to look for (and to lock up) a scapegoat. This is no way to learn from the past.

[PT6]

"FAIR MARKETS" are what made America Great for 70 Years (1931 to 2000)! Not Wild/Free markets!

Free markets have now taken TRILLIONS from the American Middle Class using Tricks like "Illegal Naked Shorts", "TRICK Mortgages", "Bundled TRICK Mortgages", "Excessive Leveraging of OIL", and use of OUR BRIGHTEST University Students to constantly develop NEW FINANCIAL TRICKS.

We must get back to "FAIR MARKETS" with regulations against all these NEW and clever TRICKS.

These same computer "Whizzes" could also Hack our Vote Tallies in this ELECTION!

[PT6]

The most important lesson for all students is that ETHICAL business is the only way to succeed!

We have seen Wall Street employ unethical "TRICKS" and used brilliant students to program new systems that were designed to "CHEAT" others.

Honest young students fell into this environment and were not only promised fortunes but many actually received $10s of millions in stock that is now worth very little in bonuses for Christmas for new "TRICKS" that made Brokers Billions!

Our best students need to use their skills for the pursuit of GOOD.

For America to survive we must have "Fair Markets" as we did for the most part from "1931 to 2000."

I think students graduating now may have a year or so of difficulty but are actually fortunate they were not sucked into the Wall Street of the PAST and corrupted by its GREED!

[KillTheMessenger]

What gets me most is that we keep blaming the people who actually can do the math. Why are we not blaming the ones who can't?

If you have a high school diploma, you should be able to understand the concept and the pitfalls of compound interest. And if you don't have a high school diploma they should probably not let you handle ARMs.

[CharlieMarlowe]

Exactly right about thinkers being wrong. Unfortunately ,it is a big deal because there are too many "sheep" willing to follow and believe without thinking. And that has led to great human suffering.

[CharlieMarlowe]

So Karl Marx, Adam Smith and Gene Roddenberry were wrong about the future. How about that?

[KillTheMessenger]

Everybody who ever lived was wrong about the future. No big deal.

[dadw5boys]

HIGER INTEREST RATES AND HIGHER TAXES ARE THE ONLY ANSWERS !

OR KEEP DIGGING TILL YOU BURY YOURSELF.

[KillTheMessenger]

Maybe we should chant

"Dig, baby, dig!"

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