How did those financial criminals crush the economy? Should we arrest them and banish them forever?
A year ago, it was hardly unthinkable that a math wizard like David X. Li might someday earn a Nobel Prize. After all, financial economists—even Wall Street quants—have received the Nobel in economics before, and Li’s work on measuring risk has had more impact, more quickly, than previous Nobel Prize-winning contributions to the field. Today, though, as dazed bankers, politicians, regulators, and investors survey the wreckage of the biggest financial meltdown since the Great Depression, Li is probably thankful he still has a job in finance at all. Not that his achievement should be dismissed. He took a notoriously tough nut—determining correlation, or how seemingly disparate events are related—and cracked it wide open with a simple and elegant mathematical formula, one that would become ubiquitous in finance worldwide.
They reminds me of one italian word-“montimbanco”-in English, montebank.
Most of you will be reading this magazine (I hope), for those who do not I posted this item. It basically looks at the current financial crisis and seeks to reason the role of Business Schools and universities in shaping the minds of the future, their solution? History classes! Makes me feel smugly about our course already 😉 Read it here.
Writing for the Atlantic, the magazine titled after an Ocean that signifies two opposing ideologies depending on the coast you stand on, Benjamin Schwarz reviews books from the Depression era.
Atlantic June 2009
The short article is interesting because it takes seriously the emotional weight of such words as “depression” and “recession”. Schwarz remarks that it was President Herbert Hoover that named the post 1929 slump as depression, to avoid more current, yet dramatic, labels such as panic or crisis. But the sterilizing did not work. Depression and now recession, trigger feelings of dread and insecurity and define our age. This is what Schwarz discovers in the Depression era literature, not famine, nor misery, but “unrelenting fear and dashed hope.”
Filed under Magazine, Words
Economists see markets at play everywhere. Even in your romantic life. Indeed, I’m one of the worst guests that you can invite to your wedding. Why? Because while most of your guests are listening for your love story, I’m listening for your contract. While others see a romantic courtship leading to the altar, I see people who are satisfied enough to stop searching for someone else.
Searching for a spouse is very similar to searching for a job. There is not one perfect job for each of us, but there are clearly better and worse jobs. So we hunt, for a spouse and a job. When do we stop? When the offer in the hand is better than the likely offer in the bush.
At a wedding I see a relationship that is good enough to settle down and start investing in. If you get a reasonable rate of return, investment in your relationship will make it truly better than any other relationship you could have.
I once tried to formulate a function to explain why I prefer girl A much more to girl B, and also employ marginal analysis to groud my stance ‘rationaly’. Nonetheless, this was no worse than nutritionist tastes every ambrosia with frigid tube.
Mr. Obama was endorsed in part because he had surrounded himself with enough intelligent centrists. It also said that the eventual success of Mr.Obama ‘s presidency would be based on two things: resuscitating the world economy; and bringing the new emerging powers into the Western order. He has now hurt both objectives.
The decision that the U.S. goernment made on Sep.11th to slap a 35% tariff on imported Chinese tyres was an awkward decision; completely contrary to Obama’s re-affirmed earlier: to avoid a serious commitment to trade protectionism in times of economic crisis. In addition, the move of the Chinese tire levy punitive tariffs is extremely a huge political mistake, confirming his critics’ worst fears about the president’s inability to stand up to his party’s special interests and stick to the centre ground he promised to occupy in office.
What I find meaningful is Mr.Obama’s Leftward trend, which makes a coincidence with this and last week’s topics in class. However , one is history, while the other is nowadays reality. “Evidence of a weak president being pushed leftward might cause investors to worry whether he will prove similarly feeble when it comes to reining in the vast deficits he is now racking up; and that might spook the buyers of bonds that finance all those deficits.”
The following link is the original cover story of The Economist, Sep.19th