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Tag Archive: Financial risk modeling


Zero Hedge is one of my favorite blog on the risk analysis and for the global events, the blog argues that we are living in the Golden blogAge of Central Bankers, and that wreaks havoc on the fundamental nature of market expectations data.

  • The VIX  (Volatility Index) is not a reliable measure of market complacency.
  • The wisdom of crowds is non-existent.
  • Fundamental risk/reward calculations for directional exposure to any security are problematic on anything other than a VERY long time horizon.
  • I’d rather be reactive and right in my portfolio than proactive and wrong.

The Golden Age of the Central Banker is a time for survivors, not heroes. And that’s the real moral of this story.

Let’s dig deep to understand the most basic question in risk management. Continue reading

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RISK MANAGEMENT

Well, its bit old actually, but it is still good:blog

Safety is a product, not a process.

It is being said in the industrial accident context. I’ll let the Ranter explain! through his blog.

In general, effective safety measures are usually something you do, and scattering costly “devices” around an unchanged process is a classic failure mode. Not least because they might instil a false sense of safety and lead people to take risks… Continue reading

The final approvals for the BASEL III capital standards provided by US regulators. Was going through one of the article published in imagesAmerican Banker written by Clifford Rossi, opens up that implementing robust capital standards that give individual institutions sufficient buffers from extreme events and protect the system at-large has been a major challenge for regulators and the Basel Committee since the inception of risk-based capital charges years ago. However, over reliance on analytic methods that failed miserably during the crisis puts the entire system at risk while creating enormous burdens on institutions and regulators to closely oversee these models.   Continue reading

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