Les Leopold blames fantasy baseball for the collapse of the economy:
So some genius financial engineer figured out how to break the bottleneck. Let’s create a fantasy layer of derivatives so that we don’t have to own the real thing. We can do it all AS IF we owned the underlying real assets.
Here’s how they did it. Imagine that each synthetic security is the same thing as a fantasy baseball team. The synthetic financial security, like your team, goes up or down in value depending on how the underlying assets perform, be they subprime loans or major league baseball players. You can measure how much up or down based on their numbers, pure and simple. Bingo, you no longer have a supply problem.
In effect each of our fantasy baseball teams is a synthetic derivative. It “derives” its value based on how 700 or so real major league baseball players perform. If your team does well, it goes up in value – that is you are likely to be in the money at the end of the season.
The whole post is well worth the read. His conclusion:
So next time you’re tempted to blame Obama or Goldman Sachs or Greenspan for the crash, think also of those deranged lads who gave birth to fantasy baseball some 30 years ago at La Rotisserie Française in New York.
How is possible to be tempted to blame Obama for the crash?
@Chris: People find lots of reasons to blame politicians for things that aren’t their fault.
Sorry to be so o-t, but I know David is an Ivy Hoops fan.
Cornell is up 12 at the half. When was the last time an Ivy advanced to the Sweet 16???
@James: I believe it was Penn in the early 1980s. They went to the final four.
Penn in 1979, David, just checked. (Yeah, I always underestimate how long ago events from approximately that period are, too!) You’re right, they lost to DePaul in the semifinals.
I was going to complain that CBS is showing the Missou/WV game, which is admittedly a very good game, instead of the Cornell game, but I just discovered that NCAA.com is streaming all the games live and for free!