It was time for a refresher course on Bloomberg. (Last year's visit to the offices may be found here.) In August Bloomberg Financial Services sent me both e-mail and snail-mail about yesterday’s seminar ("Focus Day") at the Palace Hotel. I signed up for foreign exchange, credit derivatives, sector analysis, and application-program interface (how to transfer data to Microsoft Excel).
Although I was tired, the speakers talked about features that I can use, so I didn’t doze off. Also, there’s still enough of the finance geek in me that they held my interest even through discussions of default “swaps” (a misnomer for credit insurance) and foreign exchange forwards, products that I don’t work with frequently.
Fogey soapbox: okay, I admit that I haven’t kept up with what’s going on in high finance---and part of my concern is undoubtedly based on the human tendency to be worried about what one doesn’t understand---but I am worried that trillions of dollars are being wagered each day based on mathematical models whose reliability hasn’t been proved. So the correlation between two securities is .18---would you bet your house on that? Would that relationship hold if the yuan was revalued by 20% or mortgage defaults rose by 10%?
Bloomberg has made a fortune by being an indispensable tool to those folks who make huge financial bets. It’s more than an analytical tool---you can even make trades on the system. That’s why its owner has the luxury of time to dabble in politics---and why they could afford to have sushi chefs making platters of those delectable morsels for their customers at the morning coffee break. © 2006 Stephen Yuen
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