Quotes About Risk

The market might have learned a simple lesson: Don't make loans to people who can't repay them. Instead it learned a complicated one: You can keep on making these loans, just don't keep them on your books. Make the loans, then sell them off to the fixed income departments of big Wall Street investment banks, which will in turn package them into bonds and sell them to investors.

That was the reason the casino bothered to list the wheel's most recent spins: to help gamblers to delude themselves.

The best decisions he has made in his life, he said, were completely unexpected, the ones that cut against convention. Then he went even further. He said that every decision he has forced himself to make because it was unexpected has been a good one.

The game has some of the feel of trading, just as jousting has some of the feel of war.

Who takes out a home loan and doesn't make the first payment?" asked Danny Moses, putting the matter one way. "Who the fuck lends money to people who can't make the first payment?" asked Eisman, putting it another.

Only someone who has Asperger's would read a subprime mortgage bond prospectus

Corporate finance, which services the corporations and governments that borrow money, and that are known as "clients," is, by comparison, a refined and unworldly place. Because they don't risk money, corporate financiers are considered wimps by traders.

There were a great many interesting questions in the world to which the only honest answer was, "It's impossible to know for sure." "What will the price of oil be in ten years?" was such a question. That didn't mean you gave up trying to find an answer; you just couched that answer in probabilistic terms.

scale. The American institutions built to manage risk and respond to a virus had been engaged in a weird simulation of crisis response that did not involve actually trying to stop the virus. "The greatest trick the CDC ever pulled was convincing the world containment wasn't possible

These folks don't know what they're talking about. If losses go to ten percent there will be, like, a million homeless people." (Losses in the pools Hubler's group had bet on would eventually reach 40 percent.)

Meriwether spent his entire day avoiding dumb bets, and he wasn't about to accept this one.

fourth risk: the electrical grid. The river and its tributaries generate more than 40 percent of the hydroelectric power for the United States; were the dams to fail, the effects would be catastrophic.

The astute investor Warren Buffett is fond of saying that any player unaware of the fool in the market probably is the fool in the market.

If you are going to start a regulatory regime from scratch, you'd design it to protect middle-and lower-middle-income people, because the opportunity for them to get ripped off was so high. Instead what we had was a regime where those were the people who were protected the least." Eisman

In 2008 it was the entire financial system that was at risk. We were still short. But you don't want the system to crash. It's sort of like the flood's about to happen and you're Noah. You're on the ark. Yeah, you're okay. But you are not happy looking out at the flood. That's not a happy moment for Noah." By

If a hurricane is another night in a bad marriage, a tornado is a blind date.

The line between gambling and investing is artificial and thin. The soundest investment has the defining trait of a bet (you losing all of your money in hopes of making a bit more), and the wildest speculation has the salient characteristic of an investment (you might get your money back with interest).

market leader in interest rate swaps. There was a natural role for a blue-chip corporation with the highest credit rating to stand in the middle of swaps and long-term options and the other risk-spawning innovations. The traits required of this corporation were that it not be a bank—and thus subject to bank regulation, and the need to reserve capital against risky assets—and that it be willing and able to bury exotic risks on its

the risk we should most fear is not the risk we easily imagine. It is the risk that we don't.

Companies that manufactured aspirin petitioned the White House. "The White House called and told us to cease and desist," recalled Foege. "Do a new study." The aspirin makers had been able to force the CDC to scrap its findings and slow down science. Foege had resigned after that. "The fact that they would risk the lives of children—it just bothered me so much," he said.

fifth risk: the risk a society runs when it falls into the habit of responding to long-term risks with short-term solutions. "Program management" is not just program management. "Program management" is the existential threat that you never really even imagine as a risk.

The only thing capitalism cannot survive is stability. Stability—true stability—is an absence of progress, and a dearth of new wealth.

Back in 1996, 65 percent of subprime loans had been fixed-rate, meaning that typical subprime borrowers might be getting screwed, but at least they knew for sure how much they owed each month until they paid off the loan. By 2005, 75 percent of subprime loans were some form of floating-rate, usually fixed for the first two years.

Clark liked to say that human beings, when they took risks, fell into one of two types, pigs or chickens. "The difference between these two kinds of people," he'd say, "is the difference between the pig and the chicken in the ham-and-eggs breakfast. The chicken is interested, the pig is committed. If you are going to do anything worth doing, you need a lot of pigs." The