Saturday, October 8, 2011

CNBC Financial Anchors Trying to Get Stock Tips from Derivative​s Expert --LOL!

Financial derivatives expert Paul Wilmott recently appeared on CNBC to warn about the dangers in the financial world because big bank traders continue to work with mathematical models that can't possibly reflect the real world. Friedrich Hayek warned about this problem ages ago in his book, The Counter-Revolution of Science.

Instead of the CNBC anchors, including Larry Kudlow, grasping the deep warning that Wilmott is trying to make, they start asking him for trading tips based upon, it appears, the mathematical formulas he says don't work.

Iris Mack, who warned Harvard and Larry Summers, before it happened, about the likely blow up of the Harvard endowment because of such derivatives trading, brought this CNBC clip to my attention and emailed:

I have NO idea how my friend and colleague Paul Wilmott kept a straight face during this CNBC interview! LOL!

It's amazing how the English maintain their composure.

Paul is talking about massive derivatives risks and the CNBC folks are asking for investment tips?

BTW: Iris will be conducting a number of wokshops over the next year on quantitative investments:

Quantitative Investment Workshops, The Terrapinn Group, 3-Day MBA Course

•London (October 12-14, 2011; March 12-14, 2012 and September 19-21, 2012)

•Singapore (October 17-19, 2011 and October 17-19, 2012)

•Hong Kong (April 23-25, 2012)


  1. I suspect the anchors were trying to neutralize his message by pretending he hadn't just given a dire warning.

  2. Bob,

    The ticker in that clip is showing S&P 500 at 999 while the VIX is at 29. This is "recent?" Sure this is the right clip? It must be at least 27 months old.

  3. Robert, I would LOL. However, this is the continuing reality, so it is becoming more and more burdensome to laugh at such things. Unfortunately, this is standard routine on CNBC, so all that I can do is shake my head. If that is what you meant by "LOL", then I completely understand. If not, then I guess you have got a better sense of humor than I.

    If you can't laugh at it then it will drive you crazy... I am certainly not going crazy, but I am not laughing as much as I used to at such things.

  4. Wow, that was probably the funniest thing I watched all day!

  5. could you do a story on what he was trying to say?

    i hear a lot of people talking about derivatives, but no one ever explains what the issues are.



  6. Amen, JFetz

    When the reality of the depth and breadth of the corruption of the DC/Wall St/FED matrix wasn't so obvious (well, to the people who hadn't already taken the Misean "Red Pill") it was much easier to laugh at their clueless and sycophantic bilge.

    Now that they, as allegedly "informed" reporters with their "ears to the ground", continue to twist the news to meet the needs of their corporatist masters it is just sick. I wonder how long Dylan Rattigan, who has been vocal about exposing their misdeeds (even going as far as to respectfully and intelligently interview Ron Paul) will survive in that pit of vipers.

    The MSM is an echo-chamber for The Elite. It is useless for "real news" and anything you hear needs to be critically examined and independently verified. They are nothing but shills, and have sold their souls for a few minutes on camera.

  7. wilmott is a buddy of taleb.but my question is,if these quants understand the problem,are they merely buying OTM options and waiting? why employ so many well paid quants to do stat-arb if it is playing with radium?

  8. This is not a "recent" clip. The Dow is at 9318, Silver is 15.22.

    I wish it were a recent clip. I'd be buying silver at such fire sale prices.

  9. how can u bet on the size of a move independent of its direction ?

  10. how can u bet on the size of a move independent of its direction ?

  11. I crack up when Kudlow states that "booms and busts are a part of free-market capitalism". Austrians understand that hampered markets are the cause of booms and busts and that free markets are self-correcting long before any significant booms and busts can develop.

  12. "Paul, we always have the potential for bubbles and crashes. It's just part of free-market capitalism as you well know."
    -Larry Kudlow

    There goes that darn free-market capitalism again making trouble for everyone.

    BTW, is Kudlow doing a Phil Hartman impersonation of himselff?