3

Canada’s contribution to the financial crisis

The formula that started it all


 

David Li was schooled at the Universities of Waterloo and Laval. He got his start in finance with CIBC. And a decade ago, the math whiz came up with a
major breakthrough. He wrote a formula, known as the Gaussian copula function, that offered up a way to measure and parcel up risk in pooled bond
markets.  It was simple and beautiful. So much so that it fuelled an entirely new, massive financial industry. But in Wall Street’s greedy hands, the limits of his formula (and Li’s own warnings) were largely ignored. Models eventually collapsed and so did financial markets. Wired helps explain how it all happened.

Wired


 
Filed under:

Canada’s contribution to the financial crisis

  1. I dare anyone to really understand it too!!!!!!!

  2. As Li himself said of his own model: “The most dangerous part is when people believe everything coming out of it.”………..why I am I reminded about Mark Carney’s (while he was in the Department of Finance) model of alleged tax leakage of income trusts….a model that has never seen the light of day. apart from 18 pages of blacked out documents.

    The ensuing financial crisis saw Canadian investors lose $35 billion of their hard earned life savings .

    Meanwhile Canada’s media had no problem with accepting blacked out documents as “proof” of alleged tax leakage?

    Some investigative media that is, with no effort to uncover the truth? Some science that is, with no peer review? Some democracy that is, with no transparency? Whose purpose does that serve? Who is Mark Carney’s sugar daddy? Canada is a country of compliant wimps. led to the slaughter by those in the media who are morally content to propagate known lies.

    They prefer the dark ages to the age of enlightenment…….and stand idly by while Canadians lose their life savings based on false arguments advanced by Mark Carney and codified into tax law by Flaherty and Harper.

    • hold up! Mark Carney who’s now the Bank of Canada President appointed by Stephen H? *That* Mark Carney?
      hmmm. the RCMP and now Mark Carney also involved with the situation around the income trust scandale? the plot thickens…

      did you hear/see PM STephen H referring to a “Synchronized Global Recession” during his press conference with President Obama?

      this Canadian is not a wimp. a majority of us are not. i figured out a long time ago that the media were under no obligation to report the truth–heard anecdotally and saw first hand examples for myself.

Sign in to comment.