The winners of the seventeenth annual awards, organised by Improbable Research, include:

• Chemistry: Mayu Yamamoto of the International Medical Centre, Japan, for developing a way to extract vanillin (a vanilla flavouring) from cow dung

• Medicine: Brian Witcombe of Gloucester, and Dan Meyer of Antioch, Tennessee, for their report in the British Medical Journal about the occupational hazards of sword-swallowing

• Peace: the Air Force Wright Laboratory, Dayton, Ohio, for instigating research on a chemical weapon to make enemy soldiers sexually irresistible to each other (the “gay bomb”)

• Aviation: Patricia V Agostino, Santiago A Plano and Diego A Golombek of Argentina, for the discovery that Viagra aids jetlag recovery in hamsters

• Nutrition: Brian Wansink of Cornell University, for exploring the seemingly boundless appetites of human beings by feeding them with a self-refilling, bottomless bowl of soup

All that leaves me feeling surprisingly peckish. For further details of a special commorative ice-cream, designed especially for the occasion (yes, you guessed – vanilla, but with a twist!), plus a series of FREE lectures tomorrow (Saturday 6th October), head straight for the horse’s mouth. Neither treat will be accessible to you if you are outside Massachusetts, unfortunately.

I don’t want to take full credit for coining the term “Magoo Finance”, because others have already attached the name to the person of former Fed Chairman Alan Greenspan well before I did (see earlier). But I wonder if it might now serve as a useful shorthand for my colleagues in Big Media to characterise the kind of blind or short-sighted risk-taking that has been a feature of the past several years.

I thought it was noteworthy that the expression Value at Risk yields no useful information when punched into the BBC news archive, The [London] Times, or Daily Telegraph. The Guardian, Independent and New York Times all make mention of it, but in no systematic way, normally simply in relation to bank earnings. (The NYT yields a review of Taleb’s second book Fooled by Randomness, that is less than complementary.)

VaR is used by the banks to determine how much the bank would lose in a given day on its assets under management given a certain fall in the markets. Banks use it to calibrate their risk management. It is a pillar of the modern banking regulatory regime. Continue reading ‘magoo finance III’