The recent media coverage of the shenanigans around GameStop show just how little the media understand anything about trading including shorting a stock.  Shorting comes in two varieties of liquidity provider and liquidity taker.  Going naked short is a liquidity taker and few practitioners are equipped to take such a bet.  There are many ways players can improve their odds of winning, and few are legal.

Auctions have been around for centuries and provide a fair and transparent way for a seller to connect with potential buyers.  The finance industry has in the past used aspects of the auction design to provide liquidity on demand to those clients wanting to shift blocks of stock around.  The advent of order matching and the rise of algorithmic trading has increased volume but often gives a false impression of liquidity shown by the flash crash of 2010.  Sometimes a new shiny toy is not always better than the incumbent.

Risk management can look a lot like whack-a-mole where the checkers focus on individual silos rather than connect the dots across multiple areas that together create a catastrophe either financial or loss of life from a structural failure.  The connectors are Red Flags that answer the question, "how did we come to this".  There are many Red Flags, so in this podcast, I share my favourites.

This podcast is a follow on to a much earlier podcast called Eliminate! Eliminate! where I discussed the dangers of risk elimination.  A recent survey from Germany outlines the extent of the damage for kids that daily wear masks for extended periods.  This podcast outlines the concept of a form of risk management in parenting that is south of risk elimination.

The British Psychological Society recently called out the behaviour of the UK government's Behavioural Insights Team psychologists for a breach of ethical standards.  The BIT urged the government at the start of the pandemic to use scare tactics to ensure the population comply with draconian measures.  Now that the citizens are reduced to a quivering mess, the question is how to get out of this mess.  Step forward the second wave of a mutant variant and the chance of a vaccine.  Like being at the movies.  Worse, we are the movie.

A large fraction of foreign policy is to deter enemies to act in such a way that military intervention is the only option.  With nuclear power, this option is made complicated by the strategy of mutually assured destruction.  The MAD strategy comes up frequently in daily life.  This podcast discusses MAD and how it transcends activities such as the imposition of Omertà on pro cyclists and how people in political life get compromised.

Apologies to Carl Sagan that gave me the inspiration for the title and used his image.

In the arena of innovation and risk-based decision making, diving in with one's ego will always lead to a bad outcome.  In business, people assign themselves "hat" to signal their role in a conversation to avoid conflict.  finance, we learn to not make things personal and focus on the problem.   In the public narrative of the past months, this has not happened and ego has dominated, leading to moral outrage and calls for censorship.

The most important number in the world is Libor.  Omnipresent Libor dominates the rates everyone pays from lending.  This podcast provides a brief history on why things went so wrong with a concept that was so right.  Surely not due to snouts in the trough, stupidity and greed?

Apologies to Simon and Garfunkel for messing up their lyrics

One aspect of Covid-19 that is not discussed is why did the Western Democracy countries all lock down in unison.  Not exactly how the global big pigs operate.  Or do they?  This podcast provides a potential explanation using the previous Big Pig Little Pig concept.  I also close out 2020 with a top ten thoughts accumulated while making this podcast since May. 

The US in the summer 1976  was racing to develop a vaccine for a new virus call swine flu.  The academics, using anecdotal data, had predicted a death toll double that of Spanish flu and President Ford had to vaccine everyone before his re-election.  The pandemic never took hold and 4,000 were made disable or died thanks the government agency not disclosing the risk of the vaccine.   Good job we have learnt the lessons of the past.