[오늘의 한문장] When Genius Failed: The Rise and Fall of Long-Term Capital Management

Even the Federal Reserve was endorsing such programs, which went by the generic name "Value-at-Risk." Beneath the programs’ sophisticated veneer, they amounted to asking, "If markets behave as they have in the past, how much will we lose?" But what if markets did something different? History, Mark Twain noted, rhymes; it does not repeat.17

[오늘의 한문장] When Genius Failed: The Rise and Fall of Long-Term Capital Management

There is a reason why financial markets run to extremes more often than coin flips—and more often than the "hundred-year storm" that Long-Term’s partners would later cite as the culprit behind their disaster. A key condition of random events is that each new flip is independent of the previous one. The coin doesn’t remember that it landed on tails three times in a row; the odds on the fourth flip are still fifty-fifty. But markets have memories.

[오늘의 한문장] When Genius Failed: The Rise and Fall of Long-Term Capital Management

The fund had entered into thousands of derivative contracts, which had endlessly intertwined it with every bank on Wall Street. These contracts, essentially side bets on market prices, covered an astronomical sum—more than $1 trillion worth of exposure.

[오늘의 한문장] The Return of Depression Economics and the Crisis of 2008

A recession is normally a matter of the public as a whole trying to accumulate cash (or, what is the same thing, trying to save more than it invests) and can normally be cured simply by issuing more coupons

경제 불황은 인간의 비이성적 행동에 기인.

경제 불황은 인간의 비이성적 행동에 기인.