Back on October 9, we asked whether the TED spread is the new VIX: At this moment, the TED spread is the most important indicator to watch, because until the banks can honestly claim some hope of solvency and are able and willing to resume something approximating normal functioning, any other market activity is epiphenomenal at best. While the VIX deserves its popular title as the “fear index,” in this climate even it may be too broad a tool. The perception…
Wednesday, September 17, 2008
Nassim Nicholas Taleb, author of the widely discussed The Black Swan and Fooled By Randomness, is out with a new paper. “The Fourth Quadrant: A Map of the Limits of Statistics” pursues a thesis very familiar to his readers, namely that economists and finance professionals put society at risk by offering false comfort in the form of statistical models. Risk Does Not Equal Volatility The novel effort here is Taleb’s attempt to map out which kinds of risks and events are more-or-less adequately captured…
Friday, October 24, 2008
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