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Your Abbreviated Pundit Round-up
Daily Kos —
... Joe Nocera: Of quants (numbers guys) and David Einhorn (see above) and predicting risk. Do you go with the numbers or do you go with your gut? There's nothing wrong with models – so long as you know how to interpret them. A must read for Nate Silver fans, poll watchers and intuitive predictors (there's something for everyone.) ...
Value At Risk
Political Animal —
Value At Risk One of the things I love about bogs is that they allow people who really know what they're talking about to respond, publicly, to what they read, and to do so almost instantaneously, so that the rest of us can benefit. There's a wonderful example today. It starts with a long NYT article by Joe Nocera on a risk management tool called 'Value at Risk', or VaR. "Built around statistical ideas and probability theories that have been around for centuries, VaR was developed and popularized in the early 1990s by a handful of scientists and mathematicians -- "quants," ...
Value At Risk
Obsidian Wings —
... One of the things I love about bogs is that they allow people who really know what they're talking about to respond, publicly, to what they read, and to do so almost instantaneously, so that the rest of us can benefit. There's a wonderful example today. It starts with a long NYT article by Joe Nocera on a risk management tool called 'Value at Risk', or VaR. ...
How Much Of Your Money Do You Want To Give To The Poor Millionaires Who Were Greedy Enough To Fall For Bernie Madoff's Siren Song?
DownWithTyranny! —
... I'm sorry Madoff's clients lost $50 billion. They should have been more careful about the risks they were taking in their lust for greater rewards. It's the first rule of investing. Perhaps they thought they were getting away with insider trading and offshore banking shuffleboard to evade capital gains taxes. And they expect hardworking Americans to subsidize this? ...
Up, Up and Away
Matthew Yglesias —
... Joe Nocera has an interesting story in the New York Times Magazine about why Wall Street’s complicated risk management formulae went bad. But a lot of this stuff, like the “ever-rising rents” on commercial real estate, really doesn’t seem like a very complicated issue to me. Why on earth would commercial rents in general just keep going up forever and ever all across the country? ...
Stress Testing for Banks and Maybe for Us
Firedoglake —
... Every bank wants to make sure it is taking special care with this portfolio, because the securities markets are risky. One of the main tools for managing the risk is called value at risk, usually shortened to VaR. Joe Nocera wrote an entertaining description of the theory here. One of the problems with VaR is that it relies on a form of the ...
