Monthly Archives: November 2007

Southwest's Profitable Hedge

Soutwest Airlines apparently has less to worry about in the recent spike in oil prices than its competitors. Why? Because they used futures markets to hedge the risk of rises in future oil prices. So, when the price of oil goes up, the cost of running airplanes gets more expensive, but their futures contracts become […]

Daily is no longer the daily

For some reason, the main daily page seems to get quite a few hits – a legacy of the old site, I think. In any event, the daily is no longer the daily, it’s just the whole thing.

The Blow-Up

There’s a lot to say about Bryant Urstadt’s article about quant traders in this past fall’s Technology Review (free reg required), called “The Blow-up.” Combined with Amir Khandani and Andrew Lo’s “What Happened to the Quants in August 2007″ (.pdf link), it gives a fuller picture of how quantitative finance is altering markets.

Value and art, SK style

I participated in a panel earlier this week at Columbia called ‘Unraveling the Art Market’.

A shout out to Jen Lena

Jen does her thing over at What is the What?, and since then we’ve been having completely interesting discussions about innovation, music, art, markets, and the creative use of data. And in 99.9% of the cases, she knows more about music than you and I do. But I bet she doesn’t know about this.

I predict…

…that Fabio Rojas will hedge on his prediction before the final tally is in.

Ban oil speculation?

A proposal that comes around from time to time has re-emerged in light of the skyrocketing prices of oil in the global markets. As oil pushes towards $100/barrel, the petroleum secretary of India has proposed abolishing the trading of oil in commodity markets.

Art market craziness

As my friend Chuck says, even the crappy Picasso’s are bringing in $30 million. What in the world is going on? The all-art index is up 21% in the first half of 2007, compared to 14% for the S&P500. The November ArtNews reports that Sotheby’s and Christie’s are offering upwards of $1 billion in guarantees this year. Sotheby’s and Christie’s sold $7.5 billion in art in 2006, and more this year. Add Phillips de Pury & Co. (which emphasizes contemporary, where the action is), and it’s surreal.

prices and baselines, part 2

In an earlier attempt to think through pricing, I was trying to understand the importance of public, baseline prices from which traders, investors, potential buyers and sellers could determine commodity prices. This leads me to discussions of ‘dark pools’ of liquidity..