Two years ago I walked into a large sportsstore during the summer with nothing particular in mind. On one of the shelf’s I could see a sleeping bag named Tempelfjorden after the Tempelfjorden in Svalbard (the islands close to the arctic where my father once got attacked by a polar bear). A sticker claimed the bag would be comfortable down to -40 Celsius and that it would tolerate up to minus 50 celsius. The weight was “only” 4,7 kg. Quite amazing if it could do what it promised.

I am not sure why, I guess it sounded interesting and it was on sale and I actually bought one. Or was it my unconscious mind preparing me for global cooling while everyone talked about human made global warming? Anyway it was warm and I put it away in my cabin in Norway.

The sleeping bag was laying there unopened until this winter. Visiting Norway this winter during a cold spell. What an excellent opportunity to test out my extreme hedge.

It was just minus 25 celsius outside, but still good for testing the comfort of my extreme cold hedge. I grabbed the bag and walked out in exactly what I was wearing inside in front of my fireplace. A thin cotton trouser and cotton t-shirt. Wow it was freezing cold outside. At about 10 meters from my doorstep I quickly opened and unrolled the bag. It was harder to get into it than expected. First later on I figured out I not had opened the zippers. After getting inside I was quickly impressed by how warm and comfortable it was. And I was watching the most beautiful roof in the world, the clear ‘arctic' night sky filled with all its shining stars.

It was comfortable, but to fall asleep I found my nose got a bit too cold. I also had something slightly uncomfortable lying beneath my back. It was pitch dark but I had a mini torch in my pocket. Below my back I found what was a thin, but very warm and comfortable face mask and also a green cover to put over the sleeping bag to make it water proof. The waterproof cover I was throwing out, but I put on the facemask. Next I figured out how to close the end of the sleeping bag to an extend I only had an opening for my eyes. I felt wonderful comfortable and warm. Just a sleeping bag and thin layer of cotton clothe, noting more. To sleep ‘comfortably’ at minus 40 Celsius I however think you would need to combine it with full winter-dress.

The price on extreme sleeping bags is probably way up now, as always you should buy your hedge when everyone excluded a (temperature) crash.

In the evening me and a friend was returning from cross country skiing. It was time for tea and chess at the local cafe. My friend started out very good and took the lead. I decided not to give up and got into deep concentration. He did a few mistakes and I took the lead. He wanted to quit, and told it was over. I told him do not give up, you never know what can happen in the end I told him. He did a very smart move. I was leaning on my elbow and went into deep chess mediation. A mysterious light was shining over the chess pieces, but I did not take much notice of it. So many people into deep meditation talks about seeing some sort of light, why not also me.

Then suddenly my arm felt very warm, or should I say burning. My jumper was on fire, I quickly extinguished it. My jumper was "luckily" made of some type of cotton that not burnt that well, so no big deal, no damage to my arm, just that my sleeve got a bit shorter. Oh yes there was a candle on that cafe table.

After this I lost my concentration a bit and my friend was close to beating me, but in the end I made him chess mate.

This was just a mini tail-event or may be I just should say clumsiness (out of several tail event this months).

I was just reading this in a old dusty book:

"No real mathematician, and least of all Laplace, has ever claimed the presence of symmetry as being general in the case of the Bernoullian. Those who have fallen into that error are economists and statisticians who like Mr. Keynes are ignorant of the true assumptions underlying Bernulli's and Laplace's demonstrations.

...How this charming and naive statement reminds one of the playful sophistries of a bright and impish, but necessarily bad, small boy, trying to offer some excuse and explanation for his mischievous pranks, while he at the same time is wholly unmindful of the fact that his explanations and excuses are the most damning evidence of his own guilt.

Here we have Mr. Keynes, a successful writer of economic subjects, posing as a critic of such intellectual giants in the realm of mathematical science as Bernolli, Laplace and Poisson (which of course presupposes that he must have read very carefully the various writings of the old masters); who calmly and in the most innocent manners admits that of the 'laborious" mathematics involved in the question he is only acquainted with a rather clumsy demonstration published in 1896. "

Who wrote this attack on Keyns in the early 1900? I know, do you know?

Anyway little is new under the sun, many economists and a series of other practitioners in various fields and even statisticians teaching probability theory still have little or no clue about the depth of probability theory and the dangerous limitations of todays probability theory. From their ignorance some simply blow up billions of dollars, others blow up people.

What a world! What a circus!

It came with the wind.

Some people say it is a particle.

Others say it is a wave.

First came the mild summer wave.

Next the harsher autumn wave.

Before it turned into a biting winter wave.

That again turned into a mild spring wave.

Some people say it is a particle,

Others say it is a wave,

And some simply say it is a little bird.

Just as it came with the wind, suddenly it was gone with the wind.

If you look close enough you will see it is particle like, but yes it travels in waves in a ether like medium called Homo sapiens. There exist many old poems about this little bird:

I have a little bird.

Its name is Enza.

I opened the window.

And in-flu-enza.

One of my more spiritual friends far removed from quantitative finance told me there is an ancient poem/story going something like this

Master: Why do you fear this little bird?

Boy: I have heard it can do big harm to people.

Master: Only if you not feed it with the sacred herbs it will turn violent.

Boy: Where do I find such sacred herbs?

Master: Go to the tree of knowledge.

Boy: I think I have found the tree of knowledge it is very big.

Master: Climb up the trunk of the tree.

Boy: I am all the way up and there are fruits of many colors here.

Master: Pick a white fruit from the tree.

Boy: I have picked a white fruit.

Master: Now, crush it.

Boy: I have crushed it.

Master: Now, what do you find?

Boy: I find all these yellow grains, which are very small.

Master: Take up one of these grains and crush it further.

Boy: I have crushed it.

Master: What do you find now?

Boy: Some grains that are very minute, they are even hard to see.

Master: Take up one of these grains and crush it further.

Boy: I have crushed it further.

Master: What do you find now?

Boy: Nothing.

Master: Excellent, feed the little bird with this and the little bird will do you no harm.

I just walked by a woman wearing a T-shirt with this picture on:

Quants spend a lot of time behind their computers. It is soon weekend. Remember to stretch, dance, lift some weights and run a bit...

The demand for finance books in general I think is somewhat down based on how I see several famous bookstores have scaled down their selection on finance books and or moved it from premier location down to a small basement corner.

This is good! Way too many people got involved in things they not should get involved in the first place.

This also tells me the financial crisis still probably is far from over.

However people seems to have more fun, more people are dancing on the tables (in this book cafe), and less people are sticking their nose deep down in option formulas, I hope the world continues in this direction for a while ;-)

Writing is a nice way to organize something you have inside your mind. I have more and more inside my mind that I would like to write down, but I also have more and more I would like to read. Possibly I will write down a few things just for myself, or possibly I will be sharing it with the very few that could be interested in reading what I write.

Reading is observing. Don’t you need to observe before you write, except of course if you are an academic that just can come up with assumptions. Should I write another book or two or should I just be reading. There are so much to read, so many wonderful books, billions of sparkling stars on the night sky, so many galaxies to observe and understand, and then there are also the beautiful sparkling eyes of the woman that sits next to me.

So should I read or should I write?

Soon I am heading for Terra Incognita in time and space. First I am heading west, then east, then north, then south. I will be traveling in time and space. I think I will be reading this summer, that is the far north, and writing this winter, that is the far south. Enjoy your readingwriting in this short summerwinter that before you know it will turn into springfall!

Recently I was again visiting Iceland. Besides from hot springs (and hot women) you will always be able to cool yourself down in Iceland. Between the volcano’s and even above some volcano’s you will find glaciers. Vatnajokull is probably Europe's largest glacier (The average thickness of the ice is 400 m, with a maximum thickness of 1000 meter).

Glaciers expand and contract basically continuously, part of this behavior is stochastic part is deterministic (summer winter solar cycles, volcanoes below exploding etc). Then from time to time they expand dramatically (ice ages), what is a negative tail event for some could be a positive for others.

"In 1996, the volcano beneath the Vatnajokul glacier erupted, causing parts of the glacier to melt and created a huge river, temporarily the biggest river on earth by volume."

The few people I met on Iceland were in general very optimistic even if the county is hit hard by the financial crisis. One of the Icelandic ice climbers I met even though it was better now after the crisis. More focus on enjoying the nature and less focus on money and material wealth.

Some of the Icelandic glaciers supposedly contracted several hundred meters last year. Also the economy contracted dramatically. But there will be another boom both in the economy and in the glaciers.

And yes do not forget there is very little danger of getting swine flu in the middle of a glacier.

"By Velocity of a stock is meant the rate of change of the price with respect to time...For convenience, Velocity is usually reported of points per minute, dollars per minute, or cents per minute."

Wyler, J. A.

When a person forget to pay one of his small bills at some point to a big corporation or to the government he or she will immediately get charged interest on the amount and often have to pay some extra service fee on top of it, often wrapped into a threatening letter. When the government or big corporations do mistakes they will typically make it so time consuming for the customers to get their money or rights back that many customers simply write it off, in particular if small amount. Many small amounts from many customers is big money for the scammer .

Recently I worked for was it $2 per hour or actually minus per hour taking into account what I alternatively could do with that time just to not to let one of these big corporate scammers get away with their scams. When many of these big corporations obviously do errors, charged people a little too much, or given out happiness guarantees, they calculated scams are simply to make it so extremely time consuming and difficult for people to actually get back what these big corporations or governments (in for example over charging taxes by doing silly mistakes at the tax office) owns them that many if not most people instead simply write it off as sunk cost.

I do not know how many hundred dollar I simply quickly have written off over the years because I simply did not have time or energy to claim what I had the right to claim, because over charged or whatever. I wanted to claim it, but did not want to spend hours on the phone talking to voice machines or trying to send e-mails to corporations that do not read incoming e-mails, but are more than happy to spam your mail box with commercials.

Most people have noticed how most corporations quickly pick up the phone when you call their phone number given out in their recent commercial. For customer service on the other hand many corporations hardly have any people to answer the call, often just a voice machine of some sort, press 1, press 2, what is your password, account number, bla bla bla. And I am not talking about service per se, but simply about standing behind their promises.

If any good things should get out of the financial crisis I wish it is more good old personal service also after you have paid for the promised product or service. That many corporations now are struggling due to the financial crisis will hopefully increase the customer service down the road, but I am afraid not, may be it will be exactly the biggest corporate scammers that loved to rip off their many customers that will have most cash to survive the crisis.

Where is the Moral? Lack of moral still seems to be the standard business model for many businesses. Or at least asymmetrical moral requirements, promise much deliver little...