If Beta is dead, VaR should be extinct

It is to my horror that after poring through the notes on what is VaR. It finally dawned upon me that the entire financial industry has embarked down the path of no return. In the academic world, Beta is dead and thus by inference so is VaR. I thought the industry practitioners might be better when it comes to this kind of stuffs so perhaps they might have something more advanced.

Seems like I was dead wrong, allow me to correct myself, they are even more out of touch than the academicians. Financial markets are like the real world, it is much more chaotic than what can be captured by some complex formulation and parameters. The all to familiar gaussian bell curve appeared on the 3rd page to my disgust.

Just how do you model human behaviour? Applying mediocristan laws in a world of extremistan is bound to get you into trouble. The natural tendency of human beings to swing towards extremes. Right down here we still have an entire industry worshipping something that is incorrect and I have a career that is based on bullshit.

Being politically correct emails galore

Got an email straight from a director in London to change all references of "Proprietary and Prop" to "Arbitrage" in all our reports. Well, yeah as if that is going matter at all. Now the harsh criticism on proprietary trading is coming down from the regulators and politicians. So change the wordings of the title. Presto, we are operating a different business now!!

Please do not use the acronyms PIIGS. Spell them out Portugual, Ireland, Italy, Greece and Spain correctly. Do not say you have short positions, that makes us look like short-sellers. These people gain from the misery of investors. Say you have a short exposure.

Seriously, I totally do not understand what all the fuss is about.

Practical Realities

It is the distinctive unmistakable feeling that work is starting to suck my lifeforce away. Nowadays, I spend the most of my time looking at practically meaningless data. Delta, Gamma, Vega, Theta and Rho, these Greeks are really meant make to simple things complex.

In reality, risk sensitivities are only meant for trading purposes. They represent no significance at all when it comes to real long term investments. However, trading in a bank is no difference from gambling. Investment banks are just super big glorified casinos. Why do I have to bother with all these nonsense?

Ah...I forgot, because it's my job to do so. It pays very well but I literally hate it, but this is the best I can get to move towards my goals.

Career Advice

"Would you tell me, please, which way I ought to go from here?"

"That depends a good deal on where you want to get to," said the Cat.

"I don't much care where..."said Alice.

"Then it doesn't matter which way you go," said the Cat.

-Lewis Carroll, Alice in Wonderland