The tag 'Black-Sholes' never really instilled confidence in me with regard to their modelling. Many a ship hath been sunk by same.

In the past I thought you have said publicly traded assets aren't the full answer? I'll try to find it...

http://tickerforum.org/cgi-ticker/akcs-w....


http://market-ticker.org/archives/802-Il....


Nothing specific about M2M or public exchanges here but you did propose that the government set up rules.

"There is no limit to what can be accomplished if it doesn't matter who gets the credit."

I'd acknowledge the original author, but that'd defeat the purpose.

Quote:

I suppose I should be annoyed that this is of course presented as an "original idea", but I'm not.

History shows that during the gold rushes of the Old West, the original discoverers rarely if ever got rich off their finds. The "big boys" would come in, and sometimes either swindle them or pay a fraction of what a claim was really worth. It's a myth, though, that every successful prospector died by falling off his mule after spending his last eagle getting drunk at the corner bar. They were what modern marketers call "early adapters," many of whom were well-paid for their claims and went on to further successes.

There weren't that many that got really rich up in Alaska...

The guys who did well were not the prospectors but were the guys who sold the tools and supplies to the speculators.

If only your ideas about health care cost reform & health care isurance reform would get swiped. We might actually make some progress. Unfortunately both political poles don't seem able to tolerate a logical cmpromise.

Karl:

I'm puzzled about your "street cred" comment.

Granted, Scholes won a Nobel, but he was also an important player (partner, I believe) in LTCM that failed and was bailed out a few years ago, plus he was also an important player in another hedge fund that became insolvent just last year.

I guess I don't understand how these guys that are involved in multiple failed enterprises still maintain their "street cred". Is it a matter of the Nobel trumps everything and thus the failures aren't counted against them, or is it a "once in the club, always in the club" type of thing, or what? I would have expected that "high finance" is a dog-eat-dog environment, and if you fail (especially twice) you wouldn't have any "cred" left.

Jim Cramer: How does it have any "street cred" at all?

Idiocy of crowds? Who knows.....

A significant number of "mark-to-model" calculations used to value financial assets are based on Black-Scholes. It's quite significant that Scholes is coming out, rejecting that as a basis for valuation, and calling for mark-to-market.

Stockmonger I agree - it's very significant for people with these kinds of credentials to call out the BS.

These Guys know fraud and failure from the inside.

Their outright rejection of the present insane derivatives game is an important milestone in the evolution of the management of the Crisis.

Advocating that .gov to blow up the derivatives market is also basically advocating that .gov blow up a number of TBTF Financial firms to salvage the system.

This is a call for a titanic $1.2 Quadrillion institutional Demolition Exorcise.

LTCM will look like a fire-cracker compared to the carpet-bombing contemplated in trashing the broad Derivatives Market.

Further, although the majority of the Derivatives are held by American Institutions,detonating the Derivatives would have to be an International Operation as the Derivatives are dispersed Globally and not entirely sequestered at American institutions...