Monday, May 18, 2009

Questions for Myron Scholes - Crash Course - Interview -

Myron Scholes does not deserve the blame for the economic crisis but as a big name he seemingly is always in the cross fire. This time is no different as he is interviewed by Deborah Solomon of the NY Times.

Questions for Myron Scholes - Crash Course - Interview -

An excerpt:
"The writer Nassim Nicholas Taleb contends that instead of giving advice on managing risk, you “should be in a retirement home doing sudoku.”

If someone says to you, “Go to an old-folks’ home,” that’s kind of ridiculous, because a lot of old people are doing terrific things for society. I never tried sudoku. Maybe he spends his time doing sudoku.

Some economists believe that mathematical models like yours lulled banks into a false sense of security, and I am wondering if you have revised your ideas as a consequence.

I haven’t changed my ideas. A bank needs models to measure risk. The problem, however, is that any one bank can measure its risk, but it also has to know what the risk taken by other banks in the system happens to be at any particular moment."

I won't add much since I really think the idea of blaming him is just silly, but one piece of advice for Myron, try soduko some time. It really is a pretty fun game. I bet I have not played it in a year or more, but I do like it.

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