Whether you have or have not read or heard Bill Gross before, here is a great one ... I offer this humbly, and as a great admirer of Gross, but of course not to endorse the explicit PIMCO ad here....!
http://www.pimco.com/Pages/RunTurkeyRun.aspx
Wednesday, October 27, 2010
Tuesday, October 5, 2010
Risk Conferences flourish, and a rogue trader does not
Back after a week in San Francisco, and two excellent conferences ….. Moody’s Risk Practitioners Conference, and CFA Institute’s GIPS Conference
I am impressed and delighted by the extent of participation in each of these conferences – would have definitely called the size of the turnout ‘surprising’ given suggestions that companies and people have become very leery and tight-fisted about the money and the time spent out at these market conferences. On the other hand, maybe this was not so surprising given the quality of the organizations behind these events, and the outstanding value provided by the content, presenters, et al.
I spoke at both these conferences, as always shaking my finger at the excesses and the indolence that led to the current crisis, and pleading for lessons to be extracted, learnt, and used going forward. Questions that came at me included ones on Stress-Testing, VaR, quantitative focus in Risk, risk training, Basel 4,5 & 6…..
My big agenda is still People Risk – about the fear and greed that drives risk, (notwithstanding as someone said that to blame greed for the market is like blaming gravity for a plane crash), about how especially in a crisis markets are not efficient and players are not rational, and people don’t behave the same way when they are alone versus in a crowd, or when they are making money versus when they are losing much. And if people are really our greatest assets, like every major corporation on earth will eagerly tell you, then are we really treating and safeguarding them like that were so? As I drove out this morning, I heard that a French court has convicted Jerome Kerviel of Societe Generale in what is the most famous recent case of rogue trading (Bernie Madoff apart). This is a story of a small-time-trader on an arbitrage deck breaking over 140 key controls to build up exposures exceeding $ 70 billion, managing finally to lose over $ 7 billion. The sentence includes 3 years in general, and a promise from Jerome to repay all the money – all 7 billion of it! Good luck with that!!
I am impressed and delighted by the extent of participation in each of these conferences – would have definitely called the size of the turnout ‘surprising’ given suggestions that companies and people have become very leery and tight-fisted about the money and the time spent out at these market conferences. On the other hand, maybe this was not so surprising given the quality of the organizations behind these events, and the outstanding value provided by the content, presenters, et al.
I spoke at both these conferences, as always shaking my finger at the excesses and the indolence that led to the current crisis, and pleading for lessons to be extracted, learnt, and used going forward. Questions that came at me included ones on Stress-Testing, VaR, quantitative focus in Risk, risk training, Basel 4,5 & 6…..
My big agenda is still People Risk – about the fear and greed that drives risk, (notwithstanding as someone said that to blame greed for the market is like blaming gravity for a plane crash), about how especially in a crisis markets are not efficient and players are not rational, and people don’t behave the same way when they are alone versus in a crowd, or when they are making money versus when they are losing much. And if people are really our greatest assets, like every major corporation on earth will eagerly tell you, then are we really treating and safeguarding them like that were so? As I drove out this morning, I heard that a French court has convicted Jerome Kerviel of Societe Generale in what is the most famous recent case of rogue trading (Bernie Madoff apart). This is a story of a small-time-trader on an arbitrage deck breaking over 140 key controls to build up exposures exceeding $ 70 billion, managing finally to lose over $ 7 billion. The sentence includes 3 years in general, and a promise from Jerome to repay all the money – all 7 billion of it! Good luck with that!!
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