Machine for Calculating Risk

Machine for Calculating Risk, H.C. Westermann, 1962.

Bear Stearns, Merrill Lynch, Lehman Bros., et al, could have used this.

Barak Obama and Convenience Yield

Could a drop in June crude futures prices over the past two days* be due to this? Uncertainty about Nigerian oil deliveries has injected a lot of risk (and thus cost) into the crude futures market, so anything that is seen to lessen uncertainty should have the opposite effect.

*That is, the drop that happened just before yesterday's sharp increase--for which I have no explanation!

Update: The more I think about this, the less I think this announcement had any effect on convenience yield. The brief drop in futures prices just prior to the most recent jump looks more like noise than a reaction.

Nation of Scaredy Cats

from "The Tale of Samuel Whiskers" by Beatrix Potter

I rarely do this, but what he said:

At the beginning of the 21st century, the typical American suburb is just about the safest place that has ever existed in the history of the world - yet it's full of terrified people.

Statistics have little power in the face of a media environment in which extraordinarily rare events, such as strangers kidnapping children, are presented as commonplace by profit-hungry "news" outlets, for whom the bottom line is that fear sells.

Politicians realize this too. The ongoing overreaction to the 9/11 terrorist attacks is only the most vivid example of how our leaders cynically exploit our fears by making wildly exaggerated claims, such as that Islamic terrorism poses an "existential threat" to America.

Ain't it the truth? We're a nation of scaredy cats. No one knows how to assess risk (except for trained risk managers like me!). Selection bias (i.e., getting your "stats" from the TV news) is rampant. Chill out, America!