Thursday, March 11, 2010

"Read Euler, read Euler, he is the master of us all."

This quotation is attributed to French mathematician Pierre-Simon Laplace.

I use it to introduce my own advice regarding the financial crisis now facing the country:
"Read Enron, read Enron!"
All the abuses that were eventually to bring our financial system to its knees were pioneered by Enron.
I am reminded of this by the headline:
Lehman Bankruptcy Report: Top Officials Manipulated Balance Sheets, JPMorgan And Citi Contributed To Collapse
Ah, yes: manipulation of balance sheets + collusion of big banks! - this is at least part of the Enron story.

For anyone interested in understanding the collapse of the U.S. financial system I strongly advise: read Enron!
(The Enron story has the advantage of being more-or-less self-contained, and involved only a few billion dollars. This small scale helps make it reasonably comprehensible.)

Note: for info on Leonhard Euler (1707-1783), see "Read Euler, read Euler, he is the master of us all."
For info on Laplace (1749-1827) see Pierre-Simon Laplace.

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