> inancial products/innovations, e.g. mortgage bonds, CDOs, etc., are designed with side effects baked in
A more plausible explanation is that people who invest in those instruments (and possibly people who invent them) simply do not understand them completely.
Everyone knows Ponzi scheme or perpetual motion, but if you hide some of the internals with indirection and big words it might not be apparent.
But don't worry, after the next crisis economists will explain why it happened.
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timeasmymeasure
Hanlon's razor
Date: 2019-02-01 02:21 am (UTC)A more plausible explanation is that people who invest in those instruments (and possibly people who invent them) simply do not understand them completely.
Everyone knows Ponzi scheme or perpetual motion, but if you hide some of the internals with indirection and big words it might not be apparent.
But don't worry, after the next crisis economists will explain why it happened.