Riccardo Rebonato, global head of market risk and global head of quantitative research and quantitative analysis at the Royal Bank of Scotland and author of the prescient PLIGHT OF THE FORTUNE TELLERS: Why We Need to Manage Financial Risk Differently, discussed the weaknesses of mathematical finance models and their over reliance by quants as we’ve witnessed during the economic collapse last week on the very popular blog Econtalk.  Listen to it here. This lively chat provides an insight into the managing of risk by one of the industry’s top players.  

PLIGHT OF THE FORTUNE TELLERS was published in the autumn of 2007, well before the economic downturn.

This morning, Tom Ashbrook, the host of On Point (WBUR) spoke with researchers Stuart Rutherford and Daryl Collins and one of their survey participants Lufefe about what it really means to live on $2 a day.  Lufefe, along with hundreds of others, participated in a year-long survey of the poor’s financial practices. Rutherford and Collins, along with Jonathan Morduch and Orlanda Ruthven, gathered meticulous financial diaries that demonstrate not only don’t the poor live hand-to-mouth, but they manage their money well enough to save for life’s big emergencies and celebrations. If you visit WBUR’s site, you can listen to the program and also view a series of photos taken in the Langa Township where Lufefe lives and where much of the research was conducted.

Collins and Rutherford’s research is available in Portfolios of the Poor. Visit the book’s web site here: http://www.portfoliosofthepoor.com/

Image Caption: A participant in the “financial diaries” research in Madhupur, Bangladesh, March 2009. Photo: Robin Saidman /VitalEdgeAid.org

I wanted to share this great image Reason created to accompany their review of The Invisible Hook.

Stefan Szymanski, the author of PLAYBOOKS AND CHECKBOOKS: An Introduction to the Economics of Modern Sports, tackles the economics of the exorbitant tickets to Yankee Stadium in this original article.

The House that George (and Michael) Built: New capitalism and Subprime Baseball

As we are entering a new era of capitalism, with tighter regulation of bankers and banking, federal oversight of the auto industry and public demand for higher moral standards from our business leaders, will the nation’s monopoly sports franchises start to come under pressure to clean up their act? Public reaction to the new Yankee Stadium is instructive. First, while the Steinbrenners claim that, unlike so many city funded stadiums and arenas, they are picking up the bill themselves, there was been widespread opposition to the deals that allowed them to issue $1 billion tax exempt bonds (entailing a tax subsidy of between $250 and $500 million) and to repay the bonds in lieu of (property) taxes. Moreover, there have been investigations claiming that the stadium was deliberately and misleadingly overvalued in order to make the deal to go through. Second, now the stadium is open, punters are baulking at paying the $2500 price tag attached to the premium seats, attendance figures are weak and there is talk of serious price discounting. Could the mighty Yankees, like a subprime borrower, end up being unable to pay their way?

Stefan Szymanski, author of PLAYBOOKS AND CHECKBOOKS, weighs in on the Olympics in Chicago on today’s “Marketplace Morning Report.” Click here to listen to the interview.

Click through to listen to Peter Leeson discussing Somali pirates and their 18th century brethren with Kai Ryssdal on Marketplace yesterday.

A quick excerpt:

Ryssdal: Are there remnants of that 18th century system that we see today with these Somali pirates, for example?

LEESON: It doesn’t appear that modern pirates are using a democratic form of governance. And I think the reason for that is that the crew members and the captain, if you will, of a modern Somali pirate crew is probably appointed by the landed financier. Kinda tribal chieftains who provide the seed capital for ships, who has an interest in making sure a captain of his choosing is in charge. With that difference aside, what you do see are the sorta rules of social organization emerging about how to divide up booty, and there’s also a kind of judicial system.

Stefan Szymanski’s new book PLAYBOOKS AND CHECKBOOKS: An Introduction to the Economics of Modern Sports is very timely, and Harry Hurt III discusses the book in an intriguing article called “The Wide, Messy World of Sports” in The New York Times on May 16. Szymanski is going to be interviewed by PRI’s Marketplace next week–look for the interview here…

Click through to listen to a great interview between Peter Leeson and John J. Miller, host of the Between the Covers feature for National Review Online.

Princeton University Press would like to congratulate Jeff Madrick and his book THE CASE FOR BIG GOVERNMENT for being a finalist in the 2009 PEN/John Kenneth Galbraith Award for Nonfiction.  It was one of three books, and the only university press book on the list.  The award went to Steve Coll for his excellent book The Bin Ladens: An Arabian Family in the American Century.  The other finalist was Jane Mayer’s book The Dark Side The Inside Story of How the War on Terror Turned Into a War on American Ideals.

Robert Shiller will be in the UK later this month to highlight the issues raised in his new book, co-authored with George Akerlof,  Animal Spirits .

On 18th  May he will be appearing on BBC Radio 4 Start the Week and speaking at 6.30pm at  Policy Exchange.

At 5.00pm on Tuesday 19th he will be at The Work Foundation and at 12.30pm on the 20th he will be at LSE for the Financial Markets Group

Finally at 1.00pm on the 21st May he will be participating in an RSA ThuRSdAy event