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Looking into it a bit, Jamie found that the model used by Wall Street to price LEAPs, the Black-Scholes option pricing model, made some strange assumptions.

Michael Lewis

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Michael Lewis
Age: 64
Born: 1960
Born: October 15
Author
Journalist
Writer
New Orleans
Louisiana
Michael M. Lewis
Made
Streets
Assumptions
Wall
Option
Strange
Leap
Bits
Assumption
Looking
Model
Black
Price
Pricing
Found
Street
Leaps
Used
Models
Jamie

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Yet another hedge fund manager explained Icelandic banking to me this way: you have a dog, and I have a cat. We agree that each is worth a billion dollars. You sell me the dog for a billion, and I sell you the cat for a billion. Now we are no longer pet owners but Icelandic banks, with a billion dollars in new assets.
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That's what happens when you're thirty-seven years old: you do the things you always did but the result is somehow different.
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The incentives are still rotten, and people are still paid to do things they shouldn't be doing. The reforms did not really address the incentives, the system is still dysfunctional and there are still behavioural issues that need to be addressed.
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A thought crossed his mind: How do you make poor people feel wealthy when wages are stagnant? You give them cheap loans.
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Book tours are almost designed to beat out of an author any affection he has for his book.
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He was blessed with an unconventional mind, which overcame his conventional middle-class upbringing.
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In Wall Street now, you have to hide what you're doing. It's more fun when you don't have to do that. But I don't think its sense of purpose has changed at all.
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They [some countries] borrowed money to go acquire things, Indian power plants and Danish newspapers and British soccer teams. And they did it willy-nilly, and they themselves a story, that Icelandic history and culture and DNA leaves us very well-suited to being investment bankers.
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It's such a pain in the ass to write a book, I can't imagine writing one if I'm not interested in the subject.
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Commitment, by its nature, frees us from ourselves and, while it stands us in opposition to some, it joins us with others similarly committed. Commitment moves us from the mirror trap of the self absorbed with the self to the freedom of a community of shared values.
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