http://www.minyanville.com/businessmarkets/articles/todd-harrison-randoms-indexes-exxon-resistance/3/8/2010/id/27187
There is a quaint little custom that the non wealthy do for entertainment on a Saturday night. They get together and play a game called Spades. It's a game played with 4 people generally and more often rather than not it's played through partnerships, thus making it two against two. You bet to take books or tricks combined together or one partner can go no low and take nothing at all.
If I to have the ace and king of every suit, one would think that I would be assured of picking up 8 books if bet that many, but that's not necessarily so.
I'm actually only assured of two books (Ace and king of spades) due to the random distribution of the other cards that I cannot see. If the other team had no hearts or clubs or diamonds and used a spade to trump, then I have reneged on my bet, due to no fault of my own, but still went set none the less, and am made to pay the consequences.
Remember when we posed the question, "If an accounting change can unwind the entire capital market construct, how stable is the market construct to begin with?"
The obvious question is therefore begged, if hedge funds could collude to take down sovereign economies, how stable are those economies to begin with?
Or, as Mr. Chanos and I would agree on, where do you draw the line between symptoms and the cause?
