Lecturing Birds on Flying Can Mathematical Theories Destroy the Financial Markets?

by Triana, Pablo; Taleb, Nassim Nicholas

• ISBN13: 9780470406755
• ISBN10: 0470406755
• Edition: 1st
• Format: Hardcover
• Copyright: 2009-06-09
• Publisher: Wiley

Summary

Leading thinkers have been talking for years about the conflicts between theoretical and real finance. Triana moves the conversation to an easy-to-follow narrative, and explains how it is that theoretical finance can fail dramatically in the real world.

Author Biography

Pablo Triana has successful derivatives ex-perience at all levels: on the trading floor and as a professor, consultant, and author. He is a frequent contributor to business publications, including the Financial Times, Forbes.com, Breakingviews.com, and Risk magazine, among others. Triana is also the author of Corporate Derivatives. He holds a master of science from the Stern School of Business, New York University, and a master of arts from American University.

Table of Contents

Foreword	p. XI
Preface: An Evening at NYU, Taleb's Article, and a Credit Crisis	p. XIX
Mathew Gladstein's Complaisance	p. XLIII
Essentials
Playing God	p. 3
It's tough to model human action
Finance is not as religious as physics
Black Swans make things harder
The markets are not Normal and the past is a faulty guide
Should we care that theorists persist?
The Financial Economics Fiefdom	p. 29
Virginity matters
When describing reality was okay
It's the incentives, stupid
Many obstacles to reform
Heeding Fischer Black's message
Quant Invasion	p. 59
Machine learning comes to finance
It's a computational thing
Models live here, too
Quant punting
Interesting enough for a movie
Critique
Copulated Nightmares	p. 93
Abrupt reform, if not so much prison
Modeling death
The 2005 pre-warning
Rating us into hell
A disapproving grin
Blah VaR Blah	p. 127
Insalubrious charlatanism
Tracking a true culprit
Credit truths
A long rap sheet of evidence
The police are in on it
Blue Is Not Green	p. 161
Lehman did die
Anything is possible
Buffett versus the Black Swan
Stubbornly holding the theoretical fort
An end to indoctrination
The Black-Scholes Conundrum	p. 177
Once upon a time at MIT
Frowning, not smiling
How Black was that Monday
A devastating KO
The Taleb & Haug critique
Conclusions
Black Swan Deceit?	p. 245
The tired "perfect storm" alibi may be a facade
Indoctrinating clients and investors
The unseemly marketers of academic dogma
Do as I say, not as I do
Glorifying complexity
An Unhealthy Yearning for Precision	p. 267
Dangerous voluntary enslavement
Let freedom ring
Normality can kill you
A VIXing issue
Protect those derivatives
We Need Fat Tony	p. 297
Finale Should The Nobel Prize in Economics Be Eliminated?	p. 305
Notes	p. 319
Acknowledgments	p. 335
About the Author	p. 337
Index	p. 339
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