Education in the United States

that's an obvious simplification (I am already told I write too much ffs) but the essence is that, disappearing / minimized correlations with various tricks to give the impression of lower risk.

the more complex the trick(s) the easier it is to justify ex post or at most to claim it was a good faith error, and the harder for everyone else to come and stop you from doing that in time to avoid the disaster.

The money definitely doesn't go poof. When people talk about rogue traders, they generally are talking about individual traders who take steps to evade internal guardrails because they are looking to put on excessive risk or hide losses.

if it's futures or similar bets yes 1:1 someone else gained from them.

btw the 4.9 was the losses to close the positions in a disastrous way that affected the market (closing them in 3 days you aren't a market taker anymore, you are making prices at least in those 3 days).

so it's unclear if you can claim it was Kerviel who lost them after all (and courts cleared him iirc).

the winners though could be thought as "the whole market" (if it was futures or similar, and it wasn't OTC), not some specific firms or individuals.could have been thousands of people on the opposite side of his big positions

Yeah, I was just using that as an example to defend my poker analogy, since making poker analogies is a rather tired routine here to say the least.

btw some trading isn't 0 sum, in forex or commodities the counterparty could simply be hedging.

He doesn't win/lose overall in his position no matter what (outside of the cost of the hedge itself), you are providing insurance in a way by being the counterparty.

Then you decide to keep the risk because you think it's+ev, it's like you are offering to guarantee 48% of the pot to someone who goes in at 50% equity and you take the variance

Can you explain this example with actual numbers? I.e. counterparty A takes this position, counterparty B takes this position, then this happens? Assume zero cost of trade for simplicity please (unless it's material to the example).

Note that I did say initially that one of the counterparties either benefitted or avoided a loss, which I am counting as an equivalent benefit.

airline takes a position on oil price to lock in current future prices for the year (simplyfying). he commits for the quantity it expects to need for a year at $100 a Barrel.

if oil goes up the paper profit made there by the airline goes to pay for the higher price of kerosene and viceversa if the airline loses money on that bet (oil goes down later on in the year), the airline makes up for it paying less for kerosene (this is a simplification because kerosene price isn't perfectly correlated with oil and so on).

your pure trader is in the deal because he has a directional read that tells him oil will go up within the year with 60% probability, he enters the bet and loses or win based on how oil price moves.

but the counter party doesn't, it's consolodated finance are the same no matter where oil goes which is what it wanted to achieve.

usually reducing risk has a cost (in various direct or indirect forms) and viceversa so costs usually benefit the gambler and are a net cost for the hedging entity

Not sure I understand your example. If am the airline, and I want to lock in $100 a barrel or better, I have to bet on the price going up. Therefore, you, the trader, have to bet on the price going down. I don't see how else that can work.

The outcomes are:

Price goes up --> I make money, you lose money.
Price goes down --> I lose money, you make money

You're saying that I then choose to spend some of my money on oil (that money or other money, doesn't really matter as money is fungible), which happens to balance my book for the year regardless of whether I won or lost the bet, which is fine, but the bet you and I made seems zero sum to me.

If I hit my case out against you, rack up, and go spend my dough on hookers & blow, you can't say that just because I was going to either drop my load on the poker table or in the hookers that makes poker not a zero sum game. You can't make observations about the system without closing it off somewhere.

The forex or commodities trade is zero sum as between the two parties. You are simply noting that a hedge, forward purchase, etc., may be sensible for the overall business of an airline, agricultural company, etc., regardless of whether the transaction in question, standing alone, is profitable.

You of course are correct on that point. Managing volatility is a real thing.

Of course it was highly predictable that getting rid of standardized testing was a bad idea; but to their credit many universities realized this quickly and are course correcting. Of course, my alma mater system (the UC's) will be one of the last to correct, with predictable results.

I actually have a slightly different take on what happened, that is pretty similar to most of the other takes, but acknowledges a tension which I think is a very big reality which is often overlooked. Believe it or not, I think most academics involved in admissions have a pretty good "feel" for what they are looking for, and what will work in a prospective student to their university.

However, in today's university system HR/DEI departments weird tremendous power (formal and informal), and if it has to be a choice between their political objectives and an academics "feel," their politics are going to win every time. Standardized testing results I think gives academics some additional "ammo" to pick the students they wanted to pick anyways. HR/DEI departments are still going to win these battles probably more than they should, but standardized testing will level the playing field a little.

As far as the UCs (which I have a personal interest in that I dont expect most of you to share) it seems their most important objective is to achieve their desired racial quota: something along the lines of 50% Latino/25% Asian/ 20% White/ 5% Black (with variation campus to campus). And unlike smaller private systems like the Ivy's the process has been completely bureaucratized with HR/DEI completely in charge, so there is no reason to think they wont get exactly what they wish, for good or bad.

Lack of standardised testing caused the global financial crisis?

no he is just make the huge mistake of goind back to topic in a thread about american education

There might be legal reasons, which ofc they have being trying to circumvent in any possible way, but it isn't so obvious it will be easy for them to do so in general in the near future.

They got rid of standardized tests to be able to keep doing AA even when blatantly illegal in a way that was harder to demonstrate in court.

Then they had horrible problems even inside their own model because whatever else they tried to use to push for "minorities" more was easier to abuse for actual "privileged" families than test scores.

Not sure what the next attempt for their institutionalized racism will be tbh, looks like they tried all their ammos, but they are smart and cunning and had time to think about it so there might be something left i am unaware of.

Actually, I think they realized they just weren't getting the quality of students they needed to get. At the end of the day, the Ivy's do have a brand that is important to them. They want the lions share of the best and the brightest. And without standardized test scores they weren't getting them.

I think the entire narrative about more "privileged" families getting in is just spin. It might actually be true, but I doubt they really care. If they could get their racial quotas AND still get high quality students with no standardized test scores; they wouldn't be bringing them back IMO.

The UC system is much more controlled by left wing ideologues, without the pragmatism or brand of the Ivys. I think the UC leadership will be fine becoming lower tier universities in the name of equity, and keep out standardized testing.

Kel, can you give some background? I assume that this is leading up to some sort of rant about affirmative action, but indulge me. What was standardised testing, who banned it, when, why, what was it replaced with, and why was this a bad thing?

Also true for every relationship I've ever been in.

People are lazy and not very good at argument but smart enough to recognize the weakest part of an argument so they'll jump on it if it presents itself. It's a subgenre of arguing in bad faith.

I was going to point out why this is a moronic take, then I thought "what is Luckbox expert at?' And I realised that it was probably arguing from a position of bad faith, so I am essentially playing with an expert and no edge.

You think that criticizing the weak points in an argument is lazy? Is it lazier than making the weak points in the first place?

Imagine you write 4 paragraphs about the ascent of Nazism in Germany and in one line you write that Hitler was originally from France, all the rest is factual.

And you mentioned France erroneously just to make a point about the fact that he wasn't even German to begin with.

Then a user comes and relentlessly only addresses the fact that no, he was from Austria, without ever touching the other part of your arguments.

Why is this so hard to imagine? The other arguments have all been made ad nauseam, the French connection is the novelty. Obviously that would be the interesting part.

Lol k my bad that I waste time I guess

Is this supposed to be an analogy to something that actually happened in this forum?

Also, does the person in your example continue to insist that Hitler was from France even after someone points out his error?