This recently collapsed ponzi scheme was based on Bitcoins. It could have happened with US Dollars or Danish Krone or South African Rand, so it’s not really the fault of Bitcoins (to personify a digital currency momentarily) but I think there is a link. Those who like Bitcoins are from four groups Nefarious ne’erdowells who…
It may be time to pull out the old Milo Optimisation Post. It was trivial 5 years ago and it’s still intended as funny rather than serious, but the sad, sad thing is that the lesson still hasn’t been learnt in our airports and probably a range of other entities. The security check point is…
Trying out a new plugin that will allow me to include pretty formulae in future posts. Like this: $latex e^{\i \pi} + 1 = 0$ $latex \sqrt [3] {\alpha . \beta – \Omega} $ Not sure how much use I’ll get out of it, but good to know the capability is there should I need…
SAM introduces massively complex new legislation which at first glance provides enormous amounts of additional work for insurers’ compliance departments. But given the concepts behind SAM, is it really a compliance exercise or is it a business and risk management exercise? Ultimately, insurers will need to decide how they are going to meet the SAM…
In South Africa we have a major income inequality problem. It’s historical (accumulated wealth, accumulated skills) and current (disastrous public education) and isn’t going away any time soon. The free market argument here is to forget about income inequality per se and focus on economy friendly, business friendly policies that will grow the entire economy…
Here is another interesting story with a gender angle. A study shows that stockholders in companies with women in the Board achieved better returns than those without. The obvious and likely correct point is that women add something valuable to the Board and is the company performs better. Diversity is a good thing in general,…
Lots on this topic to come over the next few months. IAIS chair Peter Braumüller acknowledged that traditional insurance does not “generate or amplify systemic risk† within the financial system or in the real economy. Although non-traditional risks do (derivatives exposures, CDS etc.) Meanwhile, the IAIS has released it’s proposals for identification and assessment of…
Volatility skew didn’t exist before the 1987 market crash. Before then, the assumptions of the Black-Scholes option pricing model were felt to be about right. Constant volatility, continuously tradeable instruments with no discontinuities in prices, independent returns from one period to the next. Then the market crashed downwards exhibiting leptokurtic, negatively skewed returns and large…
