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	<title>the rational post &#187; risk</title>
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	<link>http://www.freedom24.org/rationalpost</link>
	<description>a collection of essays and articles on the science of everyday life</description>
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		<title>in like a lion, out like a lamb?</title>
		<link>http://www.freedom24.org/rationalpost/2010/09/07/in-like-a-lion-out-like-a-lamb/</link>
		<comments>http://www.freedom24.org/rationalpost/2010/09/07/in-like-a-lion-out-like-a-lamb/#comments</comments>
		<pubDate>Tue, 07 Sep 2010 15:51:21 +0000</pubDate>
		<dc:creator>The Editor</dc:creator>
				<category><![CDATA[financial crisis]]></category>
		<category><![CDATA[history & society]]></category>
		<category><![CDATA[capital markets]]></category>
		<category><![CDATA[crisis]]></category>
		<category><![CDATA[investment]]></category>
		<category><![CDATA[macroeconomics]]></category>
		<category><![CDATA[psychology]]></category>
		<category><![CDATA[risk]]></category>
		<category><![CDATA[speculation]]></category>
		<category><![CDATA[statistics]]></category>
		<category><![CDATA[stimulus]]></category>

		<guid isPermaLink="false">http://www.freedom24.org/rationalpost/?p=2350</guid>
		<description><![CDATA[Students of behavioral finance must have had a field day this past week. In the wake of a month of dismal economic reports, Wall Street got its risk on with a few better than expected reports on manufacturing sentiment, home sales, and employment. Hopium, it appears, is a powerful drug.
Economists spent August cautiously lowering their outlook for the second half of the year as Obama&#8217;s &#8220;recovery summer&#8221; failed to bear fruit, the Federal Reserve failed at both of its twin mandates (stable prices and full employment), and bullish analysts failed to convince investors that the market was ready to climb to fresh highs. As a result, stocks ended the worst August in nine years with rising calls for stimulus and ...]]></description>
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		<slash:comments>0</slash:comments>
		</item>
		<item>
		<title>black (scholes) hole</title>
		<link>http://www.freedom24.org/rationalpost/2009/01/22/wall-street-black-hole-option-pricing/</link>
		<comments>http://www.freedom24.org/rationalpost/2009/01/22/wall-street-black-hole-option-pricing/#comments</comments>
		<pubDate>Thu, 22 Jan 2009 16:36:18 +0000</pubDate>
		<dc:creator>The Editor</dc:creator>
				<category><![CDATA[finance & economics]]></category>
		<category><![CDATA[financial crisis]]></category>
		<category><![CDATA[in other words]]></category>
		<category><![CDATA[black scholes]]></category>
		<category><![CDATA[bubble]]></category>
		<category><![CDATA[capital markets]]></category>
		<category><![CDATA[crisis]]></category>
		<category><![CDATA[derivatives]]></category>
		<category><![CDATA[models]]></category>
		<category><![CDATA[regulation]]></category>
		<category><![CDATA[risk]]></category>
		<category><![CDATA[speculation]]></category>
		<category><![CDATA[theory]]></category>
		<category><![CDATA[trading]]></category>
		<category><![CDATA[valuation]]></category>

		<guid isPermaLink="false">http://www.freedom24.org/rationalpost/?p=583</guid>
		<description><![CDATA[Scientists and market commentators have long been aware of the susceptibility of the markets to any single investment philosophy. The rise of early program trading contributed to the historic one-day loss of nearly 23% on Black Monday in 1987. Recent experiments with risk securitization may cost trillions of borrowed dollars to unwind and decades to fully digest. In this piece by veteran commentator Michael Lewis, the blame is placed squarely on the flawed assumptions of the Black-Scholes model, and the degree to which its methodology spread from the arcane trading desks of the world&#8217;s biggest investment banks to the private retirement savings of the beleaguered middle class&#8230;
Inside Wall Street&#8217;s Black Hole
by Michael Lewis
For years, investors have relied on a complex ...]]></description>
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		<slash:comments>0</slash:comments>
		</item>
		<item>
		<title>how to close a hedge fund</title>
		<link>http://www.freedom24.org/rationalpost/2008/10/21/how-to-close-a-hedge-fund/</link>
		<comments>http://www.freedom24.org/rationalpost/2008/10/21/how-to-close-a-hedge-fund/#comments</comments>
		<pubDate>Tue, 21 Oct 2008 16:23:15 +0000</pubDate>
		<dc:creator>The Editor</dc:creator>
				<category><![CDATA[finance & economics]]></category>
		<category><![CDATA[financial crisis]]></category>
		<category><![CDATA[in other words]]></category>
		<category><![CDATA[bailout]]></category>
		<category><![CDATA[hedge funds]]></category>
		<category><![CDATA[investment]]></category>
		<category><![CDATA[risk]]></category>
		<category><![CDATA[speculation]]></category>

		<guid isPermaLink="false">http://www.freedom24.org/rationalpost/?p=374</guid>
		<description><![CDATA[Few people will escape from this crisis with enough reputability to scream &#8220;I told you so&#8221; at the top of their lungs like hedge fund neophyte Andrew Lahde. In this epilogue to his one year experiment in asset management – during which time his fund returned 866% betting on the subprime collapse – he rails on the industry, its myopic leadership, the vice of greed, and even the virtues of a little green plant&#8230;
Dear Investor:
Today I write not to gloat. Given the pain that nearly everyone is experiencing, that would be entirely inappropriate. Nor am I writing to make further predictions, as most of my forecasts in previous letters have unfolded or are in the process of unfolding. Instead, I ...]]></description>
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		<slash:comments>1</slash:comments>
		</item>
		<item>
		<title>bailout</title>
		<link>http://www.freedom24.org/rationalpost/2008/10/12/bailout/</link>
		<comments>http://www.freedom24.org/rationalpost/2008/10/12/bailout/#comments</comments>
		<pubDate>Sun, 12 Oct 2008 20:24:56 +0000</pubDate>
		<dc:creator>The Editor</dc:creator>
				<category><![CDATA[financial crisis]]></category>
		<category><![CDATA[in other words]]></category>
		<category><![CDATA[bailout]]></category>
		<category><![CDATA[contagion]]></category>
		<category><![CDATA[regulation]]></category>
		<category><![CDATA[risk]]></category>
		<category><![CDATA[stimulus]]></category>

		<guid isPermaLink="false">http://www.freedom24.org/rationalpost/?p=369</guid>
		<description><![CDATA[As finance ministers from around the world congregate in Washington D.C. this weekend, various &#8220;solutions&#8221; will be floated that either compliment, contradict, or completely ignore America&#8217;s best efforts to fix its broken banking system. Coordination will be critical to preventing a protracted global recession, and Paulson and Bernanke&#8217;s ambitious plan – as examined below by a pair of Senior Fellows from the Brookings Institution – will either be the first step toward rational intrabank lending, or the final nail in the coffin of deregulated financial services&#8230;

Making the Rescue Package Work: Asset and Equity Purchases
The Brookings Institution, October 10, 2008
If the main purpose of the Emergency Economic Stabilization Act of 2008 is to give banks confidence in each other, then enabling ...]]></description>
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		<slash:comments>0</slash:comments>
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		<item>
		<title>sanity check</title>
		<link>http://www.freedom24.org/rationalpost/2008/10/11/sanity-check/</link>
		<comments>http://www.freedom24.org/rationalpost/2008/10/11/sanity-check/#comments</comments>
		<pubDate>Sat, 11 Oct 2008 04:42:26 +0000</pubDate>
		<dc:creator>The Editor</dc:creator>
				<category><![CDATA[finance & economics]]></category>
		<category><![CDATA[financial crisis]]></category>
		<category><![CDATA[in other words]]></category>
		<category><![CDATA[bailout]]></category>
		<category><![CDATA[contagion]]></category>
		<category><![CDATA[investment]]></category>
		<category><![CDATA[management]]></category>
		<category><![CDATA[moral hazard]]></category>
		<category><![CDATA[risk]]></category>
		<category><![CDATA[strategy]]></category>

		<guid isPermaLink="false">http://www.freedom24.org/rationalpost/?p=226</guid>
		<description><![CDATA[Words of cautious wisdom from the celebrated biographer of risk, back in November of 2007&#8230;
Crazy Little Thing Called Risk
By PETER L. BERNSTEIN
BACK when I was managing other people’s money, I had a client, a doctor, who enjoyed giving away money to his daughters. He was lucky, because an extended bull market was under way with only minor interruptions. The more he gave away, the more the market replaced what he had parted with. As generosity appeared to be a cost-free form of recreation, he considered the whole thing a riskless enterprise.
Whenever I saw my client, he immediately thanked me for making him whole after his most recent spate of giving. I always had to remind him that his gratitude was ...]]></description>
		<wfw:commentRss>http://www.freedom24.org/rationalpost/2008/10/11/sanity-check/feed/</wfw:commentRss>
		<slash:comments>0</slash:comments>
		</item>
		<item>
		<title>hot potato</title>
		<link>http://www.freedom24.org/rationalpost/2008/05/17/hot-potato-financial-crisis/</link>
		<comments>http://www.freedom24.org/rationalpost/2008/05/17/hot-potato-financial-crisis/#comments</comments>
		<pubDate>Sat, 17 May 2008 16:59:38 +0000</pubDate>
		<dc:creator>The Editor</dc:creator>
				<category><![CDATA[finance & economics]]></category>
		<category><![CDATA[financial crisis]]></category>
		<category><![CDATA[in other words]]></category>
		<category><![CDATA[banking system]]></category>
		<category><![CDATA[contagion]]></category>
		<category><![CDATA[history]]></category>
		<category><![CDATA[macroeconomics]]></category>
		<category><![CDATA[regulation]]></category>
		<category><![CDATA[risk]]></category>
		<category><![CDATA[strategy]]></category>

		<guid isPermaLink="false">http://www.freedom24.org/rationalpost/?p=243</guid>
		<description><![CDATA[As financial institutions continue to navel gaze in the aftermath of the credit crisis, confidence in their ability to self-regulate continues to decline. With little trust in their assets, their markets, or even their peers, these global banking titans have sworn off their independence and, like disenchanted teens, are returning home to be cared for by risk-averse, populist policy-makers and their never-ending pool of taxpayers&#8217; dough. The danger here is that both sides are still reacting to deeds already done, and nobody has yet proposed a solution to avoid similar financial chaos going forward. With threats to global income in the order of nearly a trillion dollars, whoever ultimately grabs this hot potato better have pretty thick skin&#8230;

Paradise lost
May 15th ...]]></description>
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		<slash:comments>0</slash:comments>
		</item>
		<item>
		<title>hot potato</title>
		<link>http://www.freedom24.org/rationalpost/2007/08/25/shifting-sands/</link>
		<comments>http://www.freedom24.org/rationalpost/2007/08/25/shifting-sands/#comments</comments>
		<pubDate>Sun, 26 Aug 2007 01:44:19 +0000</pubDate>
		<dc:creator>The Editor</dc:creator>
				<category><![CDATA[finance & economics]]></category>
		<category><![CDATA[financial crisis]]></category>
		<category><![CDATA[in other words]]></category>
		<category><![CDATA[world affairs]]></category>
		<category><![CDATA[banking system]]></category>
		<category><![CDATA[contagion]]></category>
		<category><![CDATA[leadership]]></category>
		<category><![CDATA[macroeconomics]]></category>
		<category><![CDATA[models]]></category>
		<category><![CDATA[mortgages]]></category>
		<category><![CDATA[policy]]></category>
		<category><![CDATA[regulation]]></category>
		<category><![CDATA[risk]]></category>
		<category><![CDATA[systemic]]></category>

		<guid isPermaLink="false">http://www.freedom24.org/rationalpost/2007/08/25/shifting-sands/</guid>
		<description><![CDATA[With international markets still reeling from the &#8220;sub-prime meltdown&#8221; and investors already bracing for the next financial quake, it&#8217;s good to know that some of the world&#8217;s economic shepherds are well aware of the wolves on the horizon, however unprepared they might be to fight back. Unlike their more political and rhetorical peers, enlightened stewardship from the IMF and its sister organizations may be the global macro-economy&#8217;s only hope against the coming valuation storm, as risk quietly shifts from sophisticated financial institutions into the hands of the unsuspecting Everyman&#8230;

&#8220;Responding to Shifts in Financial Risk: the Need for Leadership&#8221;
 Speech by Rodrigo de Rato, Managing Director of the International Monetary Fund
March 23, 2007
As Prepared for Delivery
1. We have seen a period ...]]></description>
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