Wall Street's Downfall: Smart Guys, Fuzzy Math and Dumb Moves

How much regulation has the administration put in since they claimed it was a priority....NONE! Why no mention of that? What happened to the investigation of the CEO of Country wide...NOTHING! Ever any investigation of Fannie Mae? Clearly the leader in sub prime mortgages that played a major role in Wall Street collapse....NOTHING!When you want to "write about wall street" fill in all the blanks so some one as simple minded as me can understand the " whole picture".

All the math equations in the world cannot factor in the human equation - greed. What people should do and what people will do are 2 different things! When the world's smartest math minds went to Wall Street and invented hedge funds and credit-default swaps and derivatives, then the stock market became one big gambling game and NOT a safe place to put your retirement money! After Wall Street crashed, all these math geniuses scratched their heads wondering "what happened? it looked so good on paper!"

Thanks for raising an issue that few in the financial press have zeroed in on. The cold hard reality is for the decade preceding the financial crash, the "quants" ruled Wall Street. The sophisticated, incredibly complex mathematical models created by the financial engineers determined and defined the level of risk. If the model said it was OK, it was OK. If the model said the losses were going to be 1% of the money lent out, then the losses were going to be 1%. Period. End of story.

Senior managers, rarely trained in statistics, math or econometrics weren't capable of second-guessing their model builders. True, some retained consultants to "second guess" their models, but the consultants were just as narrow-focused as the quants who built the models.

Of course, all the models were wrong. All the models were designed based upon historical assumptions and, as any 8th grade history student knows, history doesn't always repeat itself.

Yet, no one seems to understand this. No one has written about the fact that none of what are now semi-worthless mortgage securities would ever have been created but for the math models saying they were a safe investment.

Do not invest in Wall street. there are other ways to keep money safe and make it grow without the risks now prevelant in the stock market. This administration will not do anything to protect Americans from this happening again, and it will happen again. The Congress and the president are way to tied monetarily to this game. Your money would be better kept out of the stock market gamble.

It's not great minds that change the world, in fact a great mind with evil intentions has proven to be devastating in human history. It is great vision and an open heart that keeps people truly safe. The best investment is using your God given talents to earn your bread. Be aware af those who earn money from money. These individuals are a disease to society, simply playing with money for private power and wealth. These individuals do not merit their good fortune.

Most of wall street should be in prison or executed for treason..They picked up were the 9-11 terrorist ended..

To bad you didn't put outa warning before the collapse seeing as how you were in the mix and saw it coming? Or were you? Hindisght makes geniuses of us all. AllI really want to see anymore is some stiff prson sentences and perp walks, Nothing else being spewed these days gets me a single penny back from all the losses that I, as well millions of others, have sustained. Giving banks billions, then letting them hike service and access fess and calling it a quarterly profit is assinine and criminal in and of itself. The sheeple may be buying these recovery claims, but their so drunk on the koolaid, that they can hardly be considered a credible group anymore. Until Congress goes after the criminal and greedy Wall Streeters you describe as the smart people, we the people will be very suspicious of the reform efforts being ballyhood by the Democrats who promoted most of these toxic assets in the first place.

More often than not it is ''Who you know" not "What you know".My experince has been that if you want to get anywhere,you have to tell the right people what they want to hear,whether it is right or not.If you look back a couple of years,people who dared question the actions of Wall Street or tried to sound the alarm were either ignored or fired. Unfortunately the same people who made the mess are being entrusted to clean it up.I think Smart people just make everyone else nervous.It is too bad.

Like many of those who commented, I do not like or agree with the greed, injustice, sense of entitlement, indifference, scare tactics, etc. going on in corporate or government. However, I can wholeheartedly vouch for some of what jjbuff is saying. Im curious though...when u say "if you want to get anywhere"...exactly where is this utopia?

To a certain extent the smarties on wall street didn't fail. They got to merge public capital and private capital so as to end up having all sources of capital flow towards themselves. What we actually saw was the triumph, the end game of capitalism which is to accumulate all wealth into as few hands as possible. As we lose our houses, our savings, our jobs, our industries, our educational opportunities, our entrepreneurial options to larger corporate entities that now have the ability to constantly move to whereever the lowest cost of labor is we have now joined the world proper. Huge populations, declining resources, pollution and ongoing extinctions have determined elites to promote the necessity of absolute control in order to provide themselves with longer term security. Sadly, it is a strategy for delayed extinction rather than a resolve or effort to prevent it. More and more we resemble bacteria trapped in a petri dish, unable by design and environment to escape, we have passed the peak of our competing growth and already the dead spots fouled by our own excretions are starting to appear and spread. Superstitions abound and are being backed up by weapons of mass destruction that can only hasten our demise unless we recognise we must turn from being mindless organisms into thinking, aware beings, acknowledging that we have exceeded our natural bounds and must now evolve to preserve, persevere and unwind our avaricious consumption oriented impulses into something else. The elites beleive that they will survive by riding up on top of the catastrophe, avoid the quicksand by standing on the shoulders of those they deem of lesser priveledge, not seeing that the depth of the pit they hope to escape is deeper than they ever imagined.

Financial reforms are long overdue. And the mega-banks have to be stabilized, they are too interconnected in the financial system we are all dependent on. After they are well, they should be broken up into smaller pieces so this cannot happen again -- saw a cool site; Balkingpoints ; incredible satellite view of earth

Rush Limbaugh (super Racist) and Palinoo (super stupid, dumb, confused)
for 2012!!!!

She is genuinely stupid and can ride on broom with no problem!!!!

And Republicans are chewing their own knuts!!!!!!

Current Health Insurance is a Biblical Harlot riding on Americans.
They (Harlot and Republicans)are discriminating sick , poor and old.
And you have to buy Afflac too!! But when you get sick They-Harlot
supported by Republicans cancel Insurance and Americans 1.6 Million
per year getting bankrupted!.
So now is a time for Insurance for all Americans! let us stop
monopoly of Harlot and Rpublicans support of it.

God bless Obama and all Americans!!!!!!

Republicans are more conservative until conception, but after that
Democrats getting all responsibilities for the rest of the life of
new conception (person), so in conclusion -in Gods eye Democrats are
far more conservative than Harlot-Republicans!!!!

Look, it's simple! There need be no more to banking than the following:
a) Do you want to deposit money? Yes. OK, you will receive x% interest.
b) Do you want to borrow some money? Yes. OK, you will pay x% interest.
c) Obama should nationalize the banks, have me run them, problem fixed.