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# The mysterious Dr. Li, the man who brought the American economy to it's knees

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posted on Apr, 2 2010 @ 08:41 AM

Strange stories have emerged from the recent, and ongoing, financial crisis. None of them are more disturbing than the tale of the mysterious Dr. Li. You haven't heard of him? Don't worry, I hadn't either until I was most of the way through a pile of books and articles about our financial situation

During the early 1990s a Chinese national who was supported by his government arrived in Canada seeking advanced degrees in mathematics. After several years of study he was able to obtain both a masters and a Ph.D. With these degrees in his pocket Dr. Li went to work for the Canadian Imperial Bank of Commerce. He gained experience there and around the turn of the century migrated to JPMorganChase in New York City.

The mysterious Dr. Li

Now this next part gets a bit technical, so I will try to sum it up. Please see the article for further explaination.

He arrived on the scene just as the mortgage securitization team was despairing of ever finding a way to make subprime bundles salable. At this critical juncture Dr. Li presented the team with the solution they had sought so feverishly.

His solution involved complex mathematics. The technique Dr. Li employed was called the Gaussian copula function. The result was a series of equations that put a percentage figure on the possibility that a large number of subprimes would default simultaneously

So Dr. Li came in with an equation that would tell the odds of morgages defaulting at the same time, but his math was WAY WRONG, devestatingly wrong as a matter of fact.

He had calculated that the simultaneous default risks for the three lowest quality layers were 0.34 percent; 0.49 percent; and 0.88 percent

And what were the actual numbers?

The actual percentage of defaults for the bottom three layers turned out to be 48.73 percent; 56.10 percent; and 66.67 percent. The financial consequences were catastrophic, as we all discovered.

David X. Li

After leaving China in 1987 at the behest of the Chinese government to learn more about capitalism from the west

So what we have here is a Chinese state sponsored man coming on the financial scene right before its collapse and playing a MAJOR role in it. The conspiracy theorist in me says it is more then a coincidence.

And what happened to Dr. Li? He disappeared. Nobody seems to know where he is

Recipe for Disaster: The Formula That Killed Wall Street
Meet the man whose big idea felled Wall Street

-E-

[edit on 2-4-2010 by MysterE]

posted on Apr, 2 2010 @ 08:53 AM
Fascinating indeeed! Thanks for the very interesting find. I wonder if he is mathmatical err was state sponsored as well just as you. S+F. I'll have to try to find more info on this little known key figure.

posted on Apr, 2 2010 @ 08:54 AM
reply to post by Redwookieaz

It sure is suspicious that he is no where to be found now (back to China?)

-E-

posted on Apr, 2 2010 @ 09:16 AM
I don't think he disappeared.

Li since moved to Beijing, where he .s the risk management department for the China International Capital Corp., a major investment bank. He has not commented on the meltdown or his role in it.

www.thestar.com...

Nothing mysterious about him actually. Dude just developed a formula which was obviously flawed. It was relied upon my major financial players which resulted in disaster, its not really his fault.

Meh...

posted on Apr, 2 2010 @ 09:22 AM

Originally posted by MysterE
reply to post by Redwookieaz

It sure is suspicious that he is no where to be found now (back to China?)

-E-

If he accomplished it while working with JPMorgan Chase then it sounds like everything went according to plan.

He's probably retired, on his own private island in the South Pacific completely bought and paid for, with a "job well done".

posted on Apr, 2 2010 @ 09:34 AM
reply to post by serbsta

I didn't see that, just what I read in the article. However, it still seems fishey how he came sponsored by China and brought the system down, and now back to China

Nothing mysterious about him actually

I humbly disagree

-E-

[edit on 2-4-2010 by MysterE]

posted on Apr, 2 2010 @ 10:10 AM
reply to post by MysterE

The wired article is from a year ago. If this is the only thread regarding Li, then ATS is definitely drop the ball on this one.

I'm gonna wait some more, let see what other member thinks about this. In the meanwhile I suggest you read the wired article carefully, see who's really to blame for this mess.

posted on Apr, 2 2010 @ 10:15 AM
reply to post by Jazzyguy

Its easy to see who is to blame, grab a mirror or go talk to people. We caused it not the banks. Sure the banks allowed it but people did this that are every day normal people.

posted on Apr, 2 2010 @ 10:20 AM
I just hope nobody blames Canada for allowing him in here, to master his 'skills'. Once a Canadian citizen, it's easy to move to the US.

Then again, a US company provided him a job....

[edit on 2-4-2010 by TortoiseKweek]

posted on Apr, 2 2010 @ 10:25 AM

Originally posted by whoshotJR
reply to post by Jazzyguy

Its easy to see who is to blame, grab a mirror or go talk to people. We caused it not the banks. Sure the banks allowed it but people did this that are every day normal people.

I disagree with you. The man on the street DIDN'T know how the banks were doing this. They took advantage of what they saw as a good situation.

posted on Apr, 2 2010 @ 10:25 AM
I would say that the guy who came up with the whole idea of bundling mortgage loans together and selling them as legitimate investments is the person at the center of what was a huge scam.

But Newt's deregulation of the banking investment markets is what brought the whole thing down. All the 401k money going into the market was robbed, and the government, which is supposed to prevent crimes like this did nothing, and continues to do nothing about white collar crime.

posted on Apr, 2 2010 @ 10:26 AM
As someone interested in the mechanics of conspiracies as much as the actual content of conspiracies, I'll be interested in whether this gains much traction and support in America. It maybe worth comparing this against, say, the
'British Royalty owns America' paradigm of conspiracies.

To me it's all a classic example of 'looking outwards for blame' and general scapegoating as whether outsiders actually have a role in what's happened is often immaterial and of secondary importance to the need to find blame. That goes for witches or foreign mathematicians.

posted on Apr, 2 2010 @ 10:43 AM
If any of you see this as anything other than anti Chinese propaganda then you need to re evaluate what is being said here.

I'll sum it up for you, "it wasn't the US, it was them damn commie reds"

yea..

posted on Apr, 2 2010 @ 10:47 AM

Originally posted by BetweenTheLine
If any of you see this as anything other than anti Chinese propaganda then you need to re evaluate what is being said here.

I'll sum it up for you, "it wasn't the US, it was them damn commie reds"

yea..

I'm sorry you feel that way, I mistook this for a conspiracy website, but I just wanted to bring a possibility to the table.

-E-

posted on Apr, 2 2010 @ 11:09 AM

Originally posted by MysterE

Originally posted by BetweenTheLine
If any of you see this as anything other than anti Chinese propaganda then you need to re evaluate what is being said here.

I'll sum it up for you, "it wasn't the US, it was them damn commie reds"

yea..

I'm sorry you feel that way, I mistook this for a conspiracy website, but I just wanted to bring a possibility to the table.

-E-

This is a conspiracy site and there's potentially different ways of looking at the same 'text'. BetweenTheLine's take on this is equally valid in that there's also a conspiracy at work behind the 'it was the commie reds' view. How and why does America see the 'red menace'? How much of it is that a coordinated manipulation of the American people?

I'm personally sorry that you only see this the way that you do.

[edit on 2-4-2010 by Merriman Weir]

posted on Apr, 2 2010 @ 11:17 AM
reply to post by Merriman Weir

He could have been, Irish, German, Isreali, or whatever and I would have reported it the same way. It just so happened this man was Chinese

-E-

posted on Apr, 2 2010 @ 11:23 AM
From my understanding, the Chinese abandoned communism about twenty years ago, so this can't be anti-communism rhetoric.

It does provide a step in the whole mortgage crisis scam of the last decade creating the biggest economic downturn since the Great Depression.

posted on Apr, 2 2010 @ 11:31 AM

Originally posted by whoshotJR
reply to post by Jazzyguy

Its easy to see who is to blame, grab a mirror or go talk to people. We caused it not the banks. Sure the banks allowed it but people did this that are every day normal people.

Classic cop out answer. You are perhaps right if your talking about the people that instituted these policies. But as for the lowly worker and consumer...

Did the people overvalue homes by 50%?
Did the people leverage every dollar at 1 to 1000?
Did the people create CDS, CDOs etc?
Did the people list questionable instruments as collateral?
Did the people rate straight garbage as AAA?

No, but the people sure got taken along for the ride by the banks, wall street and the rating agencies.

[edit on 2-4-2010 by ISHAMAGI]

posted on Apr, 2 2010 @ 11:32 AM

Originally posted by MysterE
reply to post by Merriman Weir

He could have been, Irish, German, Isreali, or whatever and I would have reported it the same way. It just so happened this man was Chinese

-E-

You're missing the point. Firstly, in this case, it was someone who is Chinese and therefore, for many, this will become loaded with preconceptions and connotations - even if you don't share them yourself.

Secondly, whether it was "Irish, German, Isreali, or whatever" as opposed to Chinese, then this would still tie-in with the 'look outside' paradigm of conspiracies where people look beyond their own communities for infiltrators from outside.

[edit on 2-4-2010 by Merriman Weir]

posted on Apr, 2 2010 @ 11:46 AM
reply to post by Merriman Weir

I see what you're saying, I do not discount the roll we played in the crisis. However, the circumstances surrounding this man are fishey to say the least.

-E-

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