Wilton’s Zombies:

“Selectmen Brennan ! Take down those Barrels on Rt 7”

As spokesman for Wilton’s Official Organization of Zombie Youth ( WOOZY) we are taking a page from President Reagan and implore “Selectmen Brennan: Take down those barrels! “

We of WOOZY do not ask for much. We are not asking Willie Nelson to run benefit concerts. Nor do we have telemarketers asking you to subscribe to magazines for Zombie causes. But these barrels on RT 7 are causing zombie’s huge problems. We have enough trouble walking as it is and our eyesight has taken a severe hit from being dead for so long. Now we are faced with these orange barrels that baffle us as we try figure out which corridor we need to stumble and lurch through. It is very confusing to WOOZY members and many of us are frightened and embarrassed when we face these on obstacle course barrels on RT 7. As we can’t speak, asking directions is out of the question and ZOMBIE’s are getting very discouraged and taking the big “step” of moving on to more hospitable circumstances. Now I know the hard liners out there are taking the stance that this is Darwinian and that natural selection is merely taking its course on RT 7 and Zombies have no exemption from the laws of nature. “Man-Up” they say or suffer the pangs of evolution. But these same hard liners advocate saving habitats for Siberian Tigers and whales. So we counter that Rt. 7 has been part of our natural habit since before Ethan Allen and ought to be maintained to keep WOOZY off the endangered species list. Just last night a bunch of us were coming out of Orem’s (we are not all flesh eaters, some of us enjoy cheese omelets) and headed north up Rt. 7 and suddenly were confronted with orange barrels everywhere. What lane is ours? What direction are the cars coming at us ? Simply put we could not figure out where to go. Confused ,dazed and frustrated we gave up a night of marauding and trudged home. Several long time WOOZY’s have pondered going to Ridgefield -no barrels there. And here is where you mortals make an error in upsetting the balance of nature. Just like those islands that have flightless birds nesting habitats get wiped out when rats are introduced. when the Zombie’s leave, the gap opens up the window for more vampires. Now yes there exists a bit of vampire envy among WOOZY members. Vampires have that eternal life and good looks going for them while we have trouble with our complexions and the inconvenience of body parts likes arms and legs dropping off without notice but you mortals will regret more vampires moving in. If we all are forced to leave the next thing you know vampires will be at soccer games. vampires at swim meets , vampires at baseball games. No one can want that. With all these activities and no Zombie’s to counteract the vampires you may see a vampire infestation . For some vampires may seem ok—that is ,until they get a little hungry. So we ask you—keep the balance of nature intact and let Rt 7 be a barrel free zone as it has been for hundreds of years-the natural roaming zone for Zombie’s. The Zombie destiny is for a barrel free RT7 and as we all learned in our latin lassces way back in the day…. “Ducent volentem Fata, nolentem trahunt” or “Follow the fates, for they will drag you anyway”.

Tiger at the Bat

with apologies to Ernest Thayer author of Casey at the Bat

The Enquirer rumors fueled some rocky moments for Tiger on Turkey day;

The golfer refuted rumors about Rachel that she was yet another game for him to play.

And then when Elin went to bed and Eldrick did the same;

A ringing cellphone disturbed the silence of the beneficiaries of his fame.

Elin arose to respond to the summons, while Tiger was at rest ;

Elin clung to that hope, which springs eternal in the human breast.

Hesitantly, she thought, if only Tiger could credibly deny this rumor or that;

The family had a chance to survive with fame and fortune standing pat.

But Holly came before Rachel, as did also Cori Rist;

The former was a porn star, the latter a party girl on the list.

So upon this ringing cellphone, Elin’s grim melancholy sat;

For there seemed but little chance of Tiger’s lies getting off the mat.

And when Elin saw the text from Rachel, she shrieked loud for one and all;

And reached for Tiger’s golf clubs and unfurled a swung to tear the cover off the ball.

And when the dust had lifted, the trophy case was destroyed;

While Tiger stumbled down the stairs to understand the commotion he had heard.

Then from Elin’s Viking throat, there rose a lusty scream;

It rumbled through the kitchen, it rattled Tiger from his dream.

Elin smashed the table with the iron and threatened to choke Tiger’s precious throat;

And Tiger, frightened Tiger, began running like the Olympian Bolt.

There was anger in Elin’s manner as she smashed everything in the place;

There was fury in Elin’s thrashing as she aimed at Tiger’s face.

And when, Elin failed to respond to begging pleas, Tiger fled to the car;

But Elin bashed in the back windshield before Tiger could get very far.

The neighbors came out to see Tiger, curled up asleep in the dirt;

The car had hit a hydrant and blood was on Tiger’s shirt.

While Tiger concocted a story to reporters that he gave;

Elin ,the heroine in the accident, was given credit for a save.

And now the stories of Tiger girls are coming from everywhere;

While Tiger tries to hide, pleading privacy, no more haughty grandeur there.

But our Nordic lady is devastated, while the playmates get attention;

While her lawyers redo the prenup “Infidelity? Did we mention?”

From the media, exploding with rumors, there went up a huge roar;

Like the spectators at the Masters appreciating his fabulous golf score.

Who is next ? what other woman? shouted every blog in the land;

And it is likely reporters would have stormed the house had not Tiger raised his hand.

With a retreat to his ship “Privacy” Tiger apologized with shame;

While Elin bought a house in Sweden and put it in her name.

And next fair weather sponsor Accenture, declined its option to renew;

While Nike ignored the fuss and proclaimed Tiger is far from through.

“Fraud!” cried the maddened thousands, and an echo answered fraud;

But another win at the Masters and we know the audience will be awed.

If a player in the NBA were reported to have 15 possibilities for his night;

We would not even shrug , and might even think the number 15 was light .

News they may divorce as the scandal news ebbs and floes;

How the future will evolve not even the apologetic Tiger knows.

Tiger has been hanging with MJ and Charles and figures that plan has got to go;

He learned he can’t keep up with MJ , a man of excess we all know.

O h somewhere in this favored land the sun is shining bright;

The band is playing somewhere and somewhere hearts are light.

And somewhere men are laughing and somewhere children shout;

But there is no joy in Orlando, mighty Tiger has struck out.

Curriculum for Risk Management Course

 

 

Week # 1 

Topic :  Probability Calculations as Basis for Risk Management Tools and Pricing of Financial Products such as Life Insurance

 

Reading for the Week:

 

“The Ascent of Money” Niall Ferguson

-Introduction ( Darwinian Nature of Financial Products

-Chapter 4 The Return of Risk  pages 176-229  ( Insurance Pricing

 

“Against the Gods” by Peter Bernstein

-Introduction    to page-22

-Renaissance Gambler  pages 39-56

-French Connection  pages 60-72

-Considering Nature of Man  pages 102-115

-Law of large Numbers  pages 122-125

-Normal distribution pages 142-151

-Regression to the mean pages  page 172-179

-Fantastic system for side bets  pages 304-328

 

Week 1 Class outline

 

1.Probability in Gambling calculation

2. Probability extended to life insurance calculations and pricing

3. Law of large Numbers

4. Normal distributions –Insurance basis for casualty and property insurance

5. Regression to the mean in markets

6. Pricing models as a concept for financial products

7. Introduction to Derivatives

 

Week # 2 

Topic:  Products to Manage Risk Options and Futures and tools to evaluate risk such as Value at Risk (VAR)

 

Reading for the Week:

“Options,Futures,and Other Derivates” by John C Hull

-Chapter 2 Futures markets

-Chapter 11 Black Scholes Model

-Chapter 12     Options of Stock Indices, Currencies and futures

-Chapter 13 the Greek Letters

-Chapter 14   VAR Value at Risk

-Chapter 23 Credit Risk

 

Option Volatility & Pricing: Advanced Trading Strategies and Techniques (Hardcover) by Sheldon Natenburg

 

Chapters to be determined

 

Week 2 Class outline

 

1) Futures contracts

2) Options contracts

3) Delta, Vega, Theta Rho Gamma

4) Implied volatility and pricing of options theoretical value

5) Black Scholes and other pricing models

6) Using options for hedging /trading. Current markets for selected products to be reviewed

7) Credit risk

 

Week # 3  

Topic:  High profile Failures of Risk Management Crash of -87 and LTCM collapse

 

 

Reading for the Week:

“When Genius Failed” by Rower Lowenstein

-Chapter 1 Meriwether

-Chapter 7 Bank of Volatility

-Chapter 8 The Fall

-Chapter 9 The Human Connection

-Epilogue

 

“Demons of our Own Design” by Richard Bookstaber

-Chapter 6 Long Term Capital Rides Leverage to Hell

-Chapter 2 Demons of ’87

 

Liar’s Poker”   by Michael Lewis

Chapter 4 pages 54-78 

Chapter 8 pages 152-184

 

Michael Lewis article on End of Wall Street   Appendix 5

The End of Wall Street:

http://www.portfolio.com/news-markets/national-news/portfolio/2008/11/11/The-End-of-Wall-Streets-Boom

 

Interview with Michael Lewis   see Appendix 1

http://business.theatlantic.com/2009/01/an_interview_with_michael_lewis.php

 

Week 3 Class Outline

1. LTCM background

2. Role of leverage and prime brokers

3 Volatility and liquidity

4) Collapse of LTCM

5) Crash of ‘87 and Failure of Portfolio Insurance to hedge against risk

6) End of Wall Street article from Michael Lewis Appendix 5

7) Lewis article on Credit Default swaps and problems therein Appendix 1

8) Liar’s poker discussion and role of various players (Who is you your side? No one)

 

 

Week # 4    

 

Topic:  Bubbles and the Changing Landscape of Wall Street

 

Reading for the Week:

 

Michael Lewis articles include din appendix found here:

Copied in Appendix 3:

1) Story by Michael; Lewis The Mansion-- A Subprime Parable see Appendix 3

http://www.portfolio.com/culture-lifestyle/goods/real-estate/2008/09/18/Michael-Lewis-Mansion?

Copied in Appendix 2:

2) The Formula that Killed Wall Street by Felix Lewis

http://www.portfolio.com/business-news/2009/03/03/Formula-That-Killed-Wall-Street?PMID=alsoin/A-Mathematical-Demise

3) (Appendix 4    Article by Michael Lewis on AIG

http://www.bloomberg.com/apps/news?pid=20601039&sid=atlHxXH7FweQ&refer=columnist_lewis

 

Extraordinary Popular Delusions and the Madness of Crowds by Charles Mackay

Chapter 1 The Mississippi Scheme page 1-45

Chapter 2 The South Sea Bubble page 46-88

Chapter 3 Tulipmania page 89-97

Chapter The Magnetizers page 304-345

 

“The Ascent of Money” by Niall Ferguson

Chapter 5 “Safe as Houses” page 253-282

 

Week # 4 Class Outline

1. Bubbles   Tulip mania

2. Hysteria and Edmund Mesmer (   source of word: “Mesmerize”)

3. Mississippi scheme John Law

4. Real Estate bubble and Subprime Mortgages/ Fed policy/Lewis AIG Appendix 4

5. Evolution on Wall Street to public corps from partnerships and expanded risk taking

6) Correlation formula giving rise to CDO’s Appendix 2

7) Sub Prime parable (Lewis article) (Appendix 3 

8) Internet stock and tech boom and bust

 

 

 

Week # 5    

 

Topic: Black Swans and Imagination about Risk

 

Reading for the week  

Black Swan The Impact of the Highly Improbable by NassimNicholas Taleb

Prologue-50   Black Swan definition Logic or What you don’t know

110-110 Katrina Risk, Risk Takers, scorn of the abstract 

122-130  “Fat Tony” and “Dr John” Gambling with the wrong dice

136 Yogi Berra and Henri Poincare

156-159 Other than That it was Ok

200-210 “Mediocristan” to “Extremistan”    seizing opportunity Positive black swans

223-224 The long tail in personal events

284 Two ways to approach Randomness

 

“Demons of our own Design” by Richard Bookstaber

Chapter 8 Complexity Tight Coupling and Normal Accidents

 

The Outliers  by Malcolm Gladwell

Pages 35-68 The 10,000 Hour Rule

 

Class outline

 

1) Black Swans defined

2) Katrina and other events outside   normal distribution of probabilities

3) Wrong dice and % odds

4) Concepts of Medicristan and Extemistan

5) Seizing your own Positive Black swan

6) Approaching randomness

7) Normal accidents Three Mile Island

8) 10,000 hour rule to create your own Black Swan

 

 

 

Documents from the web for handouts: