The Modeller’s Miscellany #93
The world will drive you mad if you expect it to be rational.
“The ones who thrive long term are those who understand the real world is a neverending chain of absurdity, confusions, messy relationships, and imperfect people.”
– Morgan Housel
Does not compute
Welcome to the first Miscellany of 2022. We’re kicking off with an article from Morgan Housel who we have featured before. He published this excellent article a few days ago on why the world will drive you mad if you expect it to work in rational ways. The opening sentence sets the scene for what follows:
A lot of things don’t make any sense. The numbers don’t add up, the explanations are full of holes. And yet they keep happening – people making crazy decisions, reacting in bizarre ways. Over and over.
Standard Chartered $61 Million fine after spreadsheet error
And what better way to kick the year off than with a spreadsheet error story. SC was fined by the Bank of England’s Prudential Regulation Authority after five errors in reporting its liquidity position.
One of the errors occurred in November 2018, as a result of a mistake in a spreadsheet entry. A positive amount was included when a zero or negative value was expected, leading to a $7.9bn (£6bn) over-reporting of the bank’s dollar liquidity position.
Rolling three statement modelling
Full Stack founders Giles and Myles will be talking about rolling three-statement modelling with Danielle on Wed Feb 2nd. Danielle is such a modelling superstar that we don’t even need to give her a second name anymore. You all know who she is. Sign up here.
LIBOR dies at 52
Excellent obituary in the New York Times:
The London interbank offered rate, a number that spent decades as a central force of international finance and was used in setting interest rates on everything from mortgages to student loans, has died after a long battle with regulators. It was 52. Read more.
How every asset class performed in 2021
Visual capitalist continues to come up with the goods week after week. Early this month they published a useful overview of how every asset class, currency, and S&P500 sector performed in 2021. Simply because we all love a good chart on a Sunday morning.
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