Section 2



The highest concentration of pretense and disinformation in the investment world is probably at a lunch of twenty money managers. Listening to the babble, everybody else is a genius, your portfolio is full of leaks, and before you know it, the roast beef tastes like salmon. The only rule I've learned is that the more confidently someone pontificates, the more likely he is to be wrong.

Barton Biggs, 1984

It's easy to forget how far and fast the financial markets have evolved over the past few decades until you pull up some of the first typewritten pages from Barton Biggs's initial Morgan Stanley dispatches from the early 1980s. Not only was he years away from a word processer that worked, he was decades from a cell phone, the Internet, online chart, or stock screening tool. An 11MB disk drive cost as much as a car, and traders cherished their cutting-edge HP12C calculators to price options using the revolutionary Black-Scholes model.

During his ensuing 30-plus-year career, Biggs witnessed the wholesale invasion and occupation of Wall Street—not by protesters but by statistical methods, quantitative models, technical analysis, and computerized trading. While his contemporaries tried to leverage powerful technologies to calculate future events through mathematical formulas, Barton Biggs was decidedly carbon-based in his approach to economics and ...

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