Almost everything I have ever written

I did not write for the reader

I wrote it for the writer

Unpublished, unedited, undated, unread

But still written in the language of a mortal fool

In the language that keeps changing

Until it’s original meaning is lost

But is it lost forever?

A wise man just told me an ancient tablet recently was discovered and decoded

I wonder if it was written for the writer or for the reader?

Philosophy is in the mind of the philosopher. If you not are the philosopher you cannot observe the philosophers philosophy directly. All you can do is observing the philosophers philosophy indirectly through words or similar expressions coming from the philosopher. In other words we are extracting limited amount of information about the philosophy from the philosopher. The words we observe from the philosopher we can call implied philosophy. The implied philosophy only implies something about the philosophy of the philosopher. The implied philosophy can sometimes sound like gibberish that often reflects upon the poor philosophy of the non-philosopher that like to call himself a philosopher. However, that the implied-philosophy sounds gibberish can just as well reflect upon the observer that not is a true philosopher and thereby not can distinguish dirt from gold. Implied philosophy can be skewed and biased. If we observe the implied philosophy from a series of philosophers we will get what we can call the philosophy-surface. The philosophy-surface is dynamic and changes over time. The implied philosophy-surface can go through regime shifts, from periods with great philosophy to periods with mostly gibberish. The implied philosophy is the mask of the philosophers philosophy. Only true philosophers can see straight through the mask of the philosopher or the so-called philosopher. And what you read now is not philosophy. This is implied philosophy. I am not a philosopher.

When I was a king's guard (in Norway) I had a lot of time to think, like figuring out how many minutes it would take to boil a egg in my hat during the summer, that I am sure was just as warm as the British Queens guards hats.

“It boils down to this—we haven’t had a strike in over ten years, so we must have been overpaying them all along.”

Actually I have never heard of a quant strike, are they overpaid or could it simply be because they still are working on finding the optimal strike price? I wonder if it strikes you fellows, as it strikes me, that all we ever seem to talk about is integration and derivation over strike prices!

FDCI reports 7 banks failed this week, and about 70 this year so far. Well that means everything is "normal" in the banking business I guess.....Are you tired of keeping track of the number of failed banks, it makes you fall asleep like a sheep.

May be time to count something else then, what about the number of satellite´s that will get fried in solar Cycle 24:

" Galaxy 15 stopped responding to ground controllers on April 5. The satellite's manufacturer, Orbital Sciences Corp. of Virginia, has said an intense solar storm in early April may be to blame."

A quantum tunnel time model was today for the first time in the history tested out by the Large Hadron Collider. It proved that continuous delta hedging perfectly works. And not only under the theoretical fantasy assumptions of continuous time hedging but also for discrete time hedging.

Stocks where accelerated with much higher energy than ever before in the history, reaching close to the speed of light. This made it possible to tunnel through time in even distributed annual time steps. By setting Delta t to discrete time steps exactly one year apart the experiment proved it was possible to hedge away all the risk. And also risk neutrality went into a perfect equilibrium.

Strangely enough some unexpected counter-intuitive results also showed up. If Delta t was moved 1 day backward going from 31 of March to 31 of March each year then the model failed to remove risk. Also if Delta t was moved one day forward the model was blowing up and some people were even afraid it would cause a micro-black-hole that could suck up the whole earth.

Why it worked with annual time steps only from this day should be further investigated!

From I was 15 to 17 I was every Christmas running my own Christmas tree business. I was standing in the center of my home village in front of the Town Hall selling Christmas trees. Trees that I had got for free from the farm of my parents, and also from a "neighbor" farm. I did not have driving license yet (you first get it at age 18 in Norway), but my father was driving the trees down for me. My younger brother was my Christmas tree business partner one year.

Some of the savings from this I invested in a bond issued by a oil company, I think I was 16. I had little idea what I was holding in my hands. Yes it was a paper bond certificate that I actually was holding in my hands that I had bought at the local village bank (I have no idea how they could let 16 year old farm boys buy such complex derivatives, nothing changes I guess). Even if I never had heard about options, never studied options I understood from the text in very small print on the back of the bond that there was some type of optionally/flexibility (it was indeed a convertible bond).

I remembered after the underlying shares had rallied a lot I was thinking a lot about if I should use the flexibility described on the back of the bond certificate to exchange my bond into shares. It was very hard to decide I remember, because if the shares felt I would no longer have the bond where I could clip off the coupons and collect cash. I very well remember there was a coupon card. At some point I decided to exchange my bond into shares I remember.

And looking at it now, I think it was close to an optimal conversion point (even if I never had heard about options or studied any option theory), especially in a market where it not was allowed to short shares. The embedded option was deep in the money. Not long after I also sold the shares.

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.