On Sep 23, 2008, at 8:00 PM, Kevin B. O'Brien wrote: > Dan M wrote: >> The problem was that no-one (including the board of directors of >> AIG knew >> that AIG was insolvent until the day the government intervened. >> Bubbles and >> panics are part of the nature of the market. You can repeat your >> mantra of >> free markets are perfect until you are blue in the face, but AIG >> was the >> biggest insurance company in the world and no one had any idea of >> their >> problems > There is a management consultant named Bob Lewis who puts out a weekly > newsletter I get that illustrated the problem very neatly. > > Set up a spreadsheet so that cell A1 has the formula "=B1 +1". Then go > to cell B1 and enter the formula "=A1+1". > > Now, most decent spreadsheet programs will not let you get away with > this circular reference, but an unregulated market can. Essentially, > it > all came down to a shell game where everyone was insuring each others > risks, and then convincing themselves that they had laid off the risk > this way.
::facepalm:: _______________________________________________ http://www.mccmedia.com/mailman/listinfo/brin-l
