Tuesday, 16 September 2014
Last updated 8 hours ago
Oct 13 2008 | 1:31pm ET
On the day that New York Times columnist and Princeton University professor Paul Krugman was awarded the Nobel Prize in economics, one former hedge fund manager is calling for the revocation of another hedge fund pairs' prize.
Nassim Nicholas Taleb, the former owner of hedge fund Empirica and current risk engineering professor and best-selling author, told National Public Radio's Morning Edition that the current market turmoil proves that the stock-option valuation process that Robert Merton and Myron Scholes won a Nobel for in 1997 doesn't work. And he wants that prize revoked.
Merton and Scholes, of course, were the brains behind Long-Term Capital Management, whose collapse in 1998 was the largest-ever hedge fund failure at the time. According to Taleb, the risk management failures that torpedoed their old firm have now helped to torpedo Wall Street by leading investment companies to believe (wrongly) that they were insulated from risk.
Earlier this month on CBS' 60 Minutes, Taleb said the "use of probabilistic methods for the estimation of risks did just blow up the banking system."
Aug 25 2014 | 11:21am ET
As many of you know, FINalternatives was recently acquired by the owners of Futures magazine, a firm called The Alpha Pages LLC. Today marks the soft-launch of a new sister site for both publications. As its name suggests, The Alpha Pages will cover all types of alternative investments, going far beyond the more well-known ones such as hedge funds and private equity. Read more…
The Federal Reserve keeps baby-stepping toward a “normalization” of monetary policy. But just what is normal?