It’s 2020. Charlie Sanford is 83. His vision of finance, revealed to us in the mid-1990s, has become a reality. The financial sector no longer thinks in terms of dollars and cents, but in units of risk: one Cat (catastrophe) equals 20 fat tails equals 250 SDs (standard deviations), equals 150 Vars (values-at-risk) or a 50-50 chance that the price will go either up or down.
Everyone is a risk manager: the bus conductor, the fireman, the librarian or deep-sea fisherman, they must come to terms with a level of risk that they are comfortable with, and pass the rest on to someone else.
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