14. Financial Arms Race
Over time, seduced by their allure, dealers began trading derivatives, risking their own money. Like narcotic dealers, they discovered the pleasure of their illicit, highly addictive products. They had not heard the warning of the seventeenth-century French author François de La Rochefoucauld: “We are so accustomed to disguise ourselves to others that in the end we become disguised to ourselves.”
Derivative professionals, especially quants, were taken in by an elegant vision of a scientific and mathematically precise vision of risk. As the English author G.K. Chesterton wrote: “The real trouble with this world [is that].... It looks just a little more mathematical and regular than it is; its exactitude is obvious but its ...
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