Every now and then I run across some important finance type saying something so patently crazy, such a complete howler, that it just stops me little brain. The most recent one of these was from Myron Scholes in the New York Times magazine this weekend. The theme of the mag was ‘debt’ in various forms, and Scholes was the subject of a snappy, short interview where he made the comments that put me on the floor.
First, though, who is Myron Scholes? Well, he’s a nerd’s nerd, the co-creator of the Black-Scholes model for pricing derivatives, for which he won the Nobel Prize in economics. After years as an econ professor he was invited along with a number of other finance nerds to build their very own hedge fund, the spectacularly misnamed Long Term Capital Management (LTCM for those in the know), which was founded in 1994 and went bust four years later. LTCM was initially famous for spectacular returns and legendary secrecy about their trades, using multiple brokers to hide their methods even from the people accessing the markets for them. (more…)
May 20th, 2009 | Comments (16)
