November 04, 2008
A November Check in
4 November: The US is about to hopefully do great things for global spirits, etc. Or maybe not.
I am afraid I remain terribly unmotivated in the area of comment - drained by real duties to be frank. Since becoming a region wide director, I have plumbed the absolute depths of irritating management idiocy. Well, really since my old assistant left for a better offer (same pay, MENA institution meaning effective lifetime employment and less demanding work load). I have learned that I did not value her enough as my current assistant doesn't quite get it that it is not acceptable to not inform me that a new hire turned down the job offer (after accepting), until 2 fucking weeks later, leaving me at once short staffed and puzzled as to why my new hire did not show on Monday. Indeed, she doesn't quite grasp that in this business, unlike her former government job, time is in fact quite literally money.
So rather than feeling motivated to rant on about either idiocies economic or political, I am mostly of late feeling homicidal with respect to own staff. Or in particular with respect to my assistant who is not going up the learning curve with the appropriate speed. It astounds me how much time I have to spend on trivialities, such as mediating between my driver and her, as they can not seem to communicate properly.
Of course the advice is to fire her, except I am up to my ears in work, as is my staff - we're looking to a gangbuster year end closing (insofar as bad news is kinda good news for me) - and it is fucking impossible to find appropriately skilled trilinguals at the right price for this position, especially given the HQ only allows shorter term contracts for the post.
Well, I should be pleased at the overall evolution. Probably going to drive off a cliff in 2009, but fuck it.
Posted by The Lounsbury at November 4, 2008 02:54 PM
Filed Under: Blog Notes - Admin
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Unrelated, but about an old remark of yours, saying you thought Scholes (or was it Merton?) was a cocksucker... I've been munching on it for a while.
One of the best articles I've seen about the financial crisis is one by the NYT. It was talking about how risk was underestimated on a systematic basis (and therefore products were mispriced, investment policies violated, etc.), as opposed to the usual assumption that the big bosses just ignored it. The thing is, facing products they barely understood if at all, and using systems which were not programmed to price them, analysts would just use, in the case of what the NYT quoted, your basic regular bond models and tools against a complex synthetic product.
That such mispecifications and abuses of financial tools and theory are so widespread - and will continue to be so - does not surprise me in fact. It strikes me how universities and business schools, even at advanced levels, do not train their students, or at least put no emphasis whatsoever, on the limitations of what they teach. In this sense, I agree with Taleb's assertion about them being brainwashed for generations.
OTOH, the BSM model, like most other models, is based on many theoretical constraints, has limited explanatory power, etc. As such, it could be a useful tool for analysis, provided one keeps in mind those limitations and do not take it as an actual, even remotely complete, representation of reality. Scholes never pretended it did, at least not to my knowledge (unlike Miller for example for his M&M's tradeoff theory of capital structure, for whom I would indeed reserve the epithet of cocksucker as a consequence).