How Maths Killed Lehman Brothers

by Dual Income No Kids on July 1, 2009 · 0 comments

Hi All,

A good friend sent us this story. Its a great piece on the Lehman Brothers bankruptcy. It explains the mechanics of credit default swaps and how the complexity associated with these financial instruments ultimately contributed to last years collapse of the firm.

For what its worth, I don’t understand CDO. My wife and I also try to keep our own personal finance simple. For example, we don’t trade stock short and don’t mess around with reverse convertible bonds or other exotic products. Its all about saving and investing, as simply and as directly as possible. If you do that, you are on the right path for building your wealth.

Link to the story here.

Hat tip to the indefatigable Miles MG.

Best,

James

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