Posted by: Tom Keene on September 20, 2011
He started at Societe Generale's Middle Office in August 2000, where he would have learned how the bank's system of checking on trader's activities worked...He would spend hours swotting up about economics.
The Telegraph, 26 Jan 2008
How does this stuff happen? No, rather, continue.
How does this greek-letter stuff (no, not the sainted Tri-Delts of Boulder) continue to happen. I have had two bright "street people" (they of the AMT, not underemployed destitution) suggest it is right and so to do for "Middle Office" peeps...to advance. Stop this, now.
Analysis will be had. Circumspection will save Swiss, not United Kingdom executive jobs. Heads will roll, with Gaussian drift, in Zurich, London and dare I suggest VaR Paris. (VaR is like gaie without the absinthe.)
The Union Bank of Switzerland (they hate when I say that on air) and their brethren will employ legions to discover "fault." Discover this.
It is about institutional and individual humility. It is singularly about the certitude of the Twainian second-rate. This will rinse-and-repeat until we stop swotting up about economics. Discuss.
Posted by: Tom Keene on September 19, 2011
"Do you want to give them the keys back? Me neither. And do you know why? Because they don't know how to drive! At a time when we're just getting out of the ditch, they'd pop it in reverse, let the special interests ride shotgun, and hit the gas, careening right back into that ditch."
President Obama, The Milwaukee Speech, Labor Day, 2010
When in doubt...class warfare. And yes, "they" have proven they don't know how to drive.
At my desk, to the left, there is a brass plaque I retired a few years ago. I won it three consecutive years and then, with ceremony, they presented it to me and said, "just go away."
Worst User of Excel at Bloomberg.
There is a similar plaque (unretired) that gets trotted around the globe for The Dumbest Economic Idea of the Moment. At present, this gem resides in Frankfurt as the ECB applies 2.8% GDP monetary policy to a 1% GDP economy.
It appears the plaque will migrate to 1600 Pennsylvania Avenue by Spring Training 2012.
Here are two exceptionally smart articles on our pending tax rage. Montgomery and Rubin canvas the sense and nonsense of the present "debate" parsing the grownups from the politicians. Read these for they are what business journalism should be each and every day.
I have no clue what the knock-on effects of our Buffettian class warfare will bring, but all, and I do mean ALL, should run when they see the word "fair." (Tip: read Mankiw, Poterba and particularly Eugene Steuerle.)
Investment means jobs and investment reacts to, and only to, incentives.
(Under you can't make this up, note this set of green-carded incentives as the dreaded Chinese create jobs at hip-American PBR, W. Juneau Avenue at N. 10th Street.)
Niall Ferguson looks over distant horizons and considers Chindia. From Omaha, across the preferred-dividend plains, past 21 abandoned acres in northwestern Milwaukee, and beyond our fair borders there are others willing to take "the keys."
Consider this proposed tax policy as The Brazilnesia Investment Act of 2013. Discuss.
Posted by: Tom Keene on September 16, 2011
Many securities exhibit some linearity until the test of fire.
Nassim Nicholas Taleb, pre-Swan, pre-fooled.
Christine called. Could I possibly have a conversation with Taleb, Kahneman and Birinyi? I screamed (star tantrum) into the phone. No! I will not do it...unless you give me a trading error. $2 Billion? Impressive, Christine.
Why does this stuff continue to happen?
Taleb studies/thinks slowly, and fast/adapts the Tversky & Kahneman heuristic. He believes in simple.
Laszlo Birinyi does (as in those that can do, those that can't...), understanding that simple rules lead to less loss, not more gain. (Tattoo this to your 2-and-20 brain).
Taleb continues, emphasizing the advantage of clear simple rules that suggest what the Gnomes of Bahnhofstrasse 45, 8001 Zurich should have not done rather than the tried-and-failed rules they did. (See Popper, Soros, Blaug, Bruce Caldwell and Kent Osband. After that 1000 pages, see Frank Knight, 1921, 10+ pages).
The professor from Thaler, letting the upstarts vent, advises the prospect of a less-than-likely future $X.X billion trading error. Zero chance.
This was a non-linear day. Discuss.
Posted by: Tom Keene on September 14, 2011
The extent of deep poverty in 2010 was unprecedented (at least since 1975 when we first started collecting the data for this statistic). Besides last year, the closest deep poverty has gotten to the current rate was in 1993, at a rate of 6.2 percent.
Elise Gould, Economic Gilded-Age Institute
I feel better. We have not doubled our "deep poverty." (+100%). Rather, we are enjoying a 97.06 percent increase in those desperate (Carlton Fisk to Roy Halladay).
The walk from the St. Regis Hotel in Beijing to the hermetically-sealed office displays a wide set of experiences. Horrific air pollution, a "communist tension." And then, there's that pesky medieval poverty. They tend more Marco Polo in China. Desperation is different there. The river runs not-American poor. We are directionally, albeit slowly, migrating to a greater non-Hayakian serfdom (Dickens, anyone?)
The Governor from the State of HBS has 59 plans. The President from the Plutocracy of America has a pass-this-plan plan. What's your plan? Right, Left, Chevy, Mercedes, trickle down, up or sideways? Read the Economic Policy Institute analysis of ColdRealityism. It's a great society.
Consider considering diving into the deep end. Discuss.
Posted by: Tom Keene on September 13, 2011
We offer a prediction: Italy will soon enter a recession. The budget may not be balanced, but the country will be kept afloat, inside the euro, by the continuing ECB bond purchases. These purchases - like an aspirin for a patient who has pneumonia - will delude Italians that the pneumonia is gone, while it is still there.
Alesina & Giavazzi, VOX
I walked into the packed Thomas H. Lee Lecture Hall at Brandeis University. Memo: if you would like to meet the hard-working discontents of our whether-we-like-it-or-not globalization, visit the Rosenberg Institute of Global Finance.
Seconds before I cascaded discretely into the discrete math, economic history and a Mannian not-weak dollar, I noticed a note on the white board, "http://www.voxeu.org/"
You and I need to advance interdependent understanding of economics, finance & investment. Start with VOX and their good competition Project Syndicate. Mr. Brisbane at The New York Times suggests we need serious thoughtful articles on Europe. He is correct.
They are simply being fired out in rapid and smart form from non-traditional sources: Alesina, Giavazzi, Roubini, and Zingales. (A great band. They grew up on Mountain and went acoustic just after CSNY.)
Read the above-quoted VOX Italian must-read. Then read more while sipping an austere Tuscan wine; Smart essays of crisis are out there. Just not where you think. Search.
Winter is coming. And, December suggests a pneumonia of our discontent. Discuss.
