Michael: LTCM demonstrates what unbridled arrogance and a mistaken view of your own superiority gets you.

If my two choices are some schmoe who just read Robert Kiyosaki (a true schmoe in his own right) or some Ivy Leaguer, well, gee, I guess I’ll go with the Ivy Leaguer.

As far as LTCM demonstrating how complex capital markets are: Not really. The geniuses running LTCM were and are no different from the quants putting way too much faith in the alchemical nature of their precious computer models. The idea that these guys are somehow more attuned to the nature of risk and its proper dispersion is a joke.

All of this risk supposedly being better managed and better spread is about to blow up in credit markets throughout the world.

A good friend of mine is a Stanford MBA, and a two decade long veteran of the investment banking industry and he has been using words like “catastrophe” and “disaster” to describe the impending meltdown. These selfsame “sharp” Ivy League types that you place so much faith in are absolutely terrified right now. And for good reason. We’ve been playing a rigged con for the last 20 years, and the party is just about over.