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And then Arthur found the Holy Grail. A big part of his success had come from figuring out what securities were actually worth compared to what the market said they were worth. That knowledge often came from diligently picking apart financial devices that had been designed for opacity. No matter how abstract or synthetic an instrument was, there was always a real, tangible thing at the bottom of it.In 2006, Arthur Black had been at an investor’s conference half-listening to a seminar on the subject of collateralized mortgage obligations and doodling on a legal pad. A question from the audience caused him to look down at what he had drawn and realize it was a diagram of the tension vectors inherent in those securities. Those tensions looked like a bomb waiting to explode. Thinking too hard about the combination of lending money to people whose primary qualification was that they couldn’t afford to pay it back and an assumption of infinite growth in the housing market made Arthur’s. "I don't watch TV," I answered truthfully."No TV? How boring!" she proclaimed.I bit back my first few responses before answering, "I never said I was interesting."After that, she decided a walk was a better idea. And so we walked. The conversation was light, with no great ideas involved, but casual enough to relax both of us. Eventually she decided that it would be best if she returned back home to make sure that her cruel aunt and uncle didn't miss her.Disappointed, I drove back home, where I slept very well.A couple of days later, she called back."Hello," she said."Hello," I responded. "How's it going?" Pretty well. I should be free up this Friday. Want to grab dinner and a movie?" she asked."Sure," I replied. "I'll see you then."Friday came, and she showed up. I took her to a mid-scale restaurant, dropped by a movie-rental place and picked a film I had vaguely wanted to see. We returned to my place.I popped in the movie right away, but real quickly she asked for the.
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