Another Analysis of the Financial Crisis

In Forbes. This one is by our own Prof. Steve Shreve.

Exam #2

The second midterm exam will be given in class on Wednesday, October 22. I've posted a review page. I'm working on scheduling a review session for Monday evening, I'll post an update when I know the details.

dfield

One of you classmates reminds us that care must be taken when dealing with direction fields

Assignment for Week #8

The reading and homework for Week #8 have been posted. You can follow the link from the Schedule page.

Book Report - Imperium

I recently finished reading Imperium by Robert Harris. The events in the book recount Cicero's rise to power in the turbulent political scene of first century Rome.

I read his book Pompeii some time ago and it was quite engaging. In Pompeii, a Roman engineer must determine why the aqueduct in Misenum has run dry. It turns out (no surprise to any mildly informed reader) that the problem is related to the impending eruption of Mt. Vesuvius. (Many other interesting things happen along the way.)

Imperium is somewhat different - more historical and less fiction than Pompeii. Harris claims that nothing in the book contradicts historically recorded events, and, moreover, he claims that every potentially verifiable event actually happened. I don't know about that, but the story coincides with everything I know about Roman history.

Making comparisons between our nation and times and events in ancient Rome is a common hobby. One needs to be careful when doing this. Our culture and times are very different from the period described in this book. Nonetheless there are some useful conclusions one can draw. One of the most important lessons that history teaches is that human nature never changes. With that in mind, this book shows in a fun, entertaining and educational way how even the most naked power grab can be cloaked in high minded rhetoric.

If you will be voting this November, I recommend that you read this book, and take another close look at our two candidates before you do so.

The BSCF Application Deadline Approaches

A reminder: The Fall 2008 deadline for applications to the BSCF major is Monday,October 13. That is the Monday before the Mid-Semester Break. Electronic applications may be sent to bscf@andrew.cmu.edu, or hard copies can be put in Dr. Handron's mailbox in the Mathematical Sciences department office, WEH 6113.

Financial Crisis Revisited

A few days ago I noted Theodore Seto's explanation of the current financial crisis. Today I'd like do point you to Megan McCardle's explanation. Here's one important bit:

What we need, fundamentally, is not simply stricter regulation or less greedy bankers. What we need is better economic theory of how these things play out, so that the regulators have better tools to assess and prevent systemic risk.[emphasis mine]

Thus is demonstrated the old adage: the flip-side of crisis is opportunity. At least for you finance students!

21-260: Assignment for Week #7

The assignment for Week #7 has been posted.

xkcd

Whad would he do?

Financial Crisis

Theodore Seto, A professor of tax law and policy at Loyola Law School Los Angeles, has written a nice explanation of the causes of our current financial meltdown. It is fairly impartial in it's assessment, though clouded in a few aspects by the authors politics. Read the comments, and make your own assessment.