Phorgy Phynance

True lies and risk management

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Quantitative risk management is actually one of the topics that I can speak about with some authority because I have worked in the area professionally. Seeing the smoke and mirrors that goes on behind the scenes, I managed to convince myself that one of the greatest dangers to the markets is, ironically, risk management. I’ve referred to this as the “Risks of Risk Management“.

But since I am such a small potato, who would listen to me? Anyway, I got a real kick out of reading this latest article by Satyajit Das.

Fear and Loathing in Derivatives – “Perfect Storms” – Beautiful & True Lies In Risk Management

I stumbled on Das’ article by following a few links deeper from the reference pointed out by another of my favorite blogs: Financial Armageddon.

One of the “funny” things is that most hedge funds and investment banks are now FINALLY caught up in sophistication to where LTCM was in 1998.


Written by Eric

September 23, 2007 at 10:37 pm

Posted in Risk Management

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