the.com/financial engineering
building complex structures out of debt so nobody notices whose money is actually at risk.
means using legal and mathematical tricks to reshape risk, returns, or taxes rather than creating any actual value.
from the term rose in the 1980s as bankers borrowed engineering's prestige to describe derivatives and leveraged buyouts, implying precision where there was mostly leverage.
peak moment2008 crisis was financial engineering gone catastrophically wrong
favorite toolspecial purpose vehicles that hide debt off balance sheets
academic cousinquantitative finance, same math, better reputation
corporate versionstock buybacks engineered to boost earnings per share