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Strategies & Market Trends : The coming US dollar crisis -- Ignore unavailable to you. Want to Upgrade?

To: dybdahl who wrote (3119)	12/30/2007 9:49:23 AM
From: Real Man	Read Replies (1) \| Respond to of 71456

The domino effect is for sure real in mortgage-related products, as many of those went from par to zero. So, what do these knowledgable folks think of the current banking crisis? I am not a specialist in derivatives, but I know well how their math works, and how it breaks down. There are quite a few very smart folks working in the area, who have Ph.D.-s in rocket science (I have one, but shhhh... -g-). While pricing of these instruments according to Gaussian models is part of standard MBA/finance education, I don't think anybody knows what to do when these equations break down, which can happen. The standard response is to run.