Tag Archives | market risk
risk_intuition

Test Your Risk Intuition

March 28, 2011

I am dusting off a classic test for risk intuition. If you remember the test from years past, it will be nice to reminisce. If not, take the test now to assess your intuition and look at risk in a new way.

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Stress Testing: A Reminder from Fukushima

March 17, 2011

The eyes of the world are on Fukushima, Japan, where heroic technicians and military personnel struggle to prevent a nuclear armageddon. A massive earthquake spawned a devastating tsunami that knocked out a nuclear power plant’s cooling system. And here we are. This reminds us how low-probability high-impact events tend to be correlated. If a country experiences prolonged draught, [...]

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Market Makers’ Dilemma

October 11, 2007

One of my clients deals in a specialty commodity. They source the commodity, process it, and then sell it in local markets around the world. In some local markets, my client is a two-bit player. In others, they are the market maker. In those markets, they largely set the price of that commodity. Unlike a [...]