Warren Buffett’s official biographer.
Note: Snowball
How do you make poor people feel wealthy when wages are stagnant? You give them cheap loans.
Note: The wealth gap, the illusion of liquidity and disposable income.
In Bakersfield, California, a Mexican strawberry picker with an income of $14,000 and no English was lent every penny he needed to buy a house for $724,000.
Note: The lack of an upper limit to the ratio between income and loan size is the main point here. But is also Michael Lewis also making a statement about immigration, language or strawberries?
Financial options were systematically mispriced. The market often underestimated the likelihood of extreme moves in prices. The options market also tended to presuppose that the distant future would look more like the present than it usually did.
Note: See also The Black Swan: The Impact of the Highly Improbable by Nassim Nicholas Taleb. https://kindle.amazon.com/work/black-swan-impact-improbable-ebook/B000Q2CLQS/B000PDZFCK Be careful not to misuse Gaussian tools in attempts to predict phenomena that are susceptible to extreme events where the total can be impacted by a single observation.