The securitisation of mortgages added a new dimension of systemic risk. Financial engineers claimed they were reducing risks through geographic diversification: in fact they were increasing them by creating an agency problem. The agents were more interested in maximising fee income than in protecting the interests of bondholders. That is the verity that was ignored by regulators and market participants alike.

We must recognize that as the dominant power in the world we have a special responsibility. In addition to protecting our national interests, we must take the leadership in protecting the common interests of humanity.

If the choice is between cooking alive and wasting money unnecessarily I would rather waste some money, because long before we cook we are going to kill each other if we don't deal with climate change.

The only thing that could hurt me is if my success encouraged me to return to my childhood fantasies of omnipotence - but that is not likely to happen as long as I remain engaged in the financial markets, because they constantly remind me of my limitations.

When you sell options, you get paid for assuming risk. That can be a profitable business, but it does not mix well with the risks inherent in a leveraged portfolio.

Germany will always do the minimum to preserve the euro. Doing the minimum, though, will perpetuate the situation where the debtor countries in Europe have to pay tremendous premiums to refinance their debt. The result will be a Europe in which Germany is seen as an imperial power that will not be loved and admired by the rest of Europe - but hated and resisted, because it will perceived as an oppressive power.

The prevailing wisdom is that markets are always right. I take the opposite position. I assume that markets are always wrong.