Derivative trading with mark-to-market accounting degenerates into mark-to-model. Two firms make a big derivative trade and the accountants on both sides show a large profit from the same trade.

I also want to raise the possibility that there are, in the very long term, "virtue effects" in economics- for instance that widespread corrupt accounting will eventually create bad long term consequences as a sort of obverse effect from the virtue-based boost double-entry book-keeping gave to the heyday of Venice. I suggest that when the financial scene starts reminding you of Sodomand Gomorrah, you should fear practical consequences even if you like to participate in what is going on.

Even in pure mathematics they can't remove all paradox, and the rest of us should also recognize we are going to have to endure a lot of paradox, like it or not.

The game is to keep learning, and I don't think people are going to keep learning who don't like the learning process.

The ethos of not fooling yourself is one of the best you could possibly have. It's powerful because it's so rare.

Some years ago one oil company bought a fertilizer company, and every other major oil company practically ran out and bought a fertilizer company. And there was no more damned reason for all these oil companies to buy fertilizer companies, but they didn't know exactly what to do, and if Exxon was doing it, it was good enough for Mobil and vice versa.

Our biggest mistakes, were things we didn't do, companies we didn't buy.