… apparently, bankers with equations kill markets (see article here.)
Amazing story of one equation that took on a life of its own. Why did this happen when the mathematician turned investment banker himself did not intend its broad, reckless use? May I suggest it is due to the enormous compensation incentives to create transactions – ostensibly enabled by this equation (that old compensation scheme problem again… sigh).
I think it’s amazing that we found a “butterfly’s wings” that gave rise to (at least a good part of) this storm.
Thanks to Paul Kedrosky of Infectious Greed for the links… the scope of his blog is a whirlwind of fascinating stuff…