Agree Quote by Michael Lewis
“Yet another hedge fund manager explained Icelandic banking to me this way: you have a dog, and I have a cat. We agree that each is worth a billion dollars. You sell me the dog for a billion, and I sell you the cat for a billion. Now we are no longer pet owners but Icelandic banks, with a billion dollars in new assets.”
About This Quote
Source Book: The Big Short by Michael Lewis, 2010
Illustrates how swaps can create the illusion of ownership without changing net wealth, highlighting financial engineering tricks.
In simple terms: Swaps can make assets appear without real change.
Key Takeaway
Beware of superficial asset swaps.
Themes
finance
economics
risk
manipulation
Mood
cautious
analytical
Type
financial
critical
educational
When to use this quote
- investment banking
- corporate finance
- risk assessment
- regulatory review
Key Concepts
derivatives
synthetic assets
valuation
financial engineering
Questions to Reflect On
- How do synthetic assets affect market transparency?
- What safeguards can prevent misuse of swaps?
A Different Perspective
Such swaps can hide true risk and lead to systemic instability.
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