Aug

30

 [The company said] the target for its general insurance business was
“challenging” following disaster-related losses.

"Zurich Defends Accounts as Ackermann Exits After CFO’s Suicide"

Using some pop psychology, I would anticipate that what exactly is referred to as "challenging" has some bearing on the magnitude of future declines. In this case some financial target being "challenging" simply means that there is no way in hell they will meet it. If however the business environment is described that way it's likely to mean two things: all hell is breaking loose and the management not only lost control but doesn't want to take responsibility for what's going on.

Victor Niederhoffer writes:

A study of use of "challenging" and NYSE might show some evidence of future inordinate declines a la Sornette but taking account of both side of the distribution, not just one tail, i.e. a real study.

Here is a 2007 study of that hypothesis which is somewhat "challenging" on a number of fronts. 

Ken Drees writes: 

I find this Stunning.

The poetry of the the modifier word "healthy" pointing to cash flows as in blood flow that sustains "a strong and resilient balance sheet", the body of the corporation, juxtapositioned against the wan image of a very "dead" monitor, (CFO), of the bloodflow of the corporation's health under a "sheet" at the morgue.

Nov

6

 I am currently reading Nate Silver's book The Signal and the Noise : Why So Many Predictions Fail-but Some Don't.

I really enjoyed the piece on weather forecasting by the government and how computers and humans play. Apparently weather.gov meteorologists take very detailed notes on their individual performance over the computer to make sure they are "adding value." In the process, they have significantly improved their own weather predictions. It also touches upon traversing the massive amount of data humans have access to and how people are not obsolete…yet,

I uploaded the pages from the book here (pages 120-122).

Seems like there are many links to trading here.

The forecasting done in weather is incredibly complex and it's quite amazing the leaps that they've taken. The fact that they could give a small radius of where Sandy would land when it combined with other storms and fronts was absolutely amazing. Weather forecasters could evacuate areas and save lives with time to do so. Weather is incredibly difficult and computationally expensive to simulate and predict. So for them being able to do that….just wow.

And on another note, I do not think forecasters misled the public at all on Sandy. News here (lower Manhattan) was very concerned about the upcoming storm and they encouraged everybody to evacuate. They had constant feeds and were constantly changing their forecasts based on new data coming in, which I hear is more prudent than what many novice traders do.

Sep

20

 Like Michael Lewis's classic Liar's Poker, Jared Dillian's Street Freak takes readers behind the scenes of the legendary Lehman Brothers, exposing its outrageous and often hilarious corporate culture.

In this ultracompetitive Ivy League world where men would flip over each other's ties to check out the labels (also known as the "Lehman Handshake"), Dillian was an outsider as an ex-military, working-class guy in a Men's Wearhouse suit. But he was scrappy and determined; in interviews he told potential managers that, "Nobody can work harder than me. Nobody is willing to put in the hours I will put in. I am insane."

As it turned out, on Wall Street insanity is not an undesirable quality.

Dillian rose from green associate, checking IDs at the entrance to the trading floor in the paranoid days following 9/11, to become an integral part of Lehman's culture in its final years as the firm's head Exchange-Traded Fund (ETF) trader. More than $1 trillion in wealth passed through his hands, but at the cost of an untold number of smashed telephones and tape dispensers. Over time, the exhilarating and explosively stressful job took its toll on him. The extreme highs and lows of the trading floor masked and exacerbated the symptoms of Dillian's undiagnosed bipolar and obsessive compulsive disorders, leading to a downward spiral that eventually landed him in a psychiatric ward.

Dillian put his life back together, returning to work healthier than ever before, but Lehman itself had seemingly gone mad, having made outrageous bets on commercial real estate, and was quickly headed for self-destruction.

 A raucous account of the final years of Lehman Brothers, from 9/11 at its World Financial Center offices through the firm's bankruptcy, including vivid portraits of trading-floor culture, the financial meltdown, and the company's ultimate collapse, Street Freak is a raw, visceral, and wholly original memoir of life inside the belly of the beast during the most tumultuous time in financial history. In his electrifying and fresh voice, Dillian takes readers on a wild ride through madness and back, both inside Lehman Brothers and himself.

He will be speaking today at the Union Square Barnes and Nobles at 6pm

BARNES & NOBLE
105 5th Avenue @ 18th Street
New York,NY
6:00PM

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