Senator Blather: Black and Scholes stole Dr Easterneuropinsky's brilliant useful risk-neutral-measure theories

For imediate release
Office of the Press Secretary
April 14, 2009

Senator Blather praises Doctor Easterneuropinsky's brilliant formulas which were stolen by Black and Scholes

Hilda Kelly Blather Garden

6:66 PM EDT

SENATOR BLATHER: Docko' Easterneuropinsky, has intrydooced me t' woderful noo fo'mula he has invented, thet is used t'calculate th' price of derivatives sech as opshuns on stocks.

Docko' Easterneuropinsky's brilliant ideas were stolen fum him by liberal professo's, Fischer Black 'n Mahron Scholes, who went on t' use th' ideas t'win th' Nobel Prize (Boos.).

Suppose Ah's hankerin' t'buy an opshun on a stock thet allers me t'sell th' stock t'th' varmint Ah buy th' opshun fum fo' $100. This hyar provides me wif insurance eff'n th' stock falls below $100. How much sh'd Ah pay fo' sech an opshun? Eff'n Ah sell sech an opshun how much sh'd Ah sell it fo'? Docko' Easterneuropinsky's brilliant ideas lead th' way t'th' right answer.

Docko' Easterneuropinsky's brilliance has brought stability an' wisdom t'th' art of pricin' derivatives, an art thet was in th' stone age until Docko' Easterneuropinsky invented his junius fo'mula. His ideas is of great utility on account o' they help us t'insure ourselves aginst losses. (Applause.)

Dr Easterneuropinsky makes theo'etical assumpshuns thet allow his fo'mulas t'accurately price whut th' price of a derivative like an opshun on a stock sh'd be.

Docko' Easterneuropinsky's fo'mulas postulate a world in which investo's doesn't care about risk. Th' fo'mulas, prove thet in sech a wo'ld investo's does not care about risk, an' opshuns kin be priced as eff'n they did not.

Ah quote Docko' Easterneuropinsky fum th' transcripp of th' meetin' wif Docko' Easterneurpinsky in which Docko' Easterneuropinsky made his stunnin' revelashuns:

Iff zee prices ooff essets are-a celcooleted tekeeng intu cunseedereshun zee fect thet theere-a is no reesk invulfed veet them zee resoolteeng prubebeelity is knoon es reesk-neootrel meesure-a...As per zee reesk-neootrel meesure-a it is teken fur granted thet all zee essets woulld prudooce-a retoorns at un iquall rate-a. It is essoomed thet their prices woulld nut vary, vheech meens zee element ooff reesk is ebsent. Um de hur de hur de hur...Zee wurth ooff a dereefative-a cun be-a very cunfeniently cunfeyed in a furmoola by useeng reesk-neootrel meesures. Um gesh ...Zee reesk-neootrel meesure-a is so-called becoose-a, under thet meesure-a, all financiel assets in zee ecunumy have-a zee same-a ixpected rate-a ooff retoorn, regerdless ooff zee 'reeskiness'...ooff zee esset ...Zee main beneffeet ooff reesk-neootrel stems frum zee fect thet Um de hur de hur de hur...every asset can be-a priced by seemply takeeng it's ixpected payoffff--calcoolateeng as iff infesturs were-a reesk neootrel--Reesk neootrel demunstretes thet when preecing...essets, zee reel vurld prubebeelities esseegned tu future-a cash floows are-a irrelefunt. Um de hur de hur de hur...Reesk-neootrel means insenseetife-a to reesk...Note-a thet under zee reesk-neootrel meesure-a all assets have-a zee same-a ixpected rate-a ooff retoorn...We-a hyputheesize-a about perellel uneeverses vhere-a iferybudy is reesk neootrel. Zee reesk-neootrel meesure-a is zee prubebeelity meesure-a ooff that perellel uneeverse-a where-a all claims have-a ixectly zee preeces zey have-a in oour reel vurld. (Bold-face type added per request of Senator Blather.)

Dr Easterneuropinsky's theory assooms tht th' varmints buyin' an' sellin' stocks, does not care how risky an investment is. Acco'din' to th' theo'y, eff'n thar is two stocks stock A an' stock B, ten dollars of stock A an' ten dollars of stock B is equal in th' eyes of investo's, even eff'n thar is a 90% chance stock A will lose more than 90% of its value, while thar is only a 10 percent change stock B will lose more than ten percent of its value.

So we is assumin' thet eff'n a stock changes from havin' only a ten percent chance of losin' more than ten percent of its value, t' havin' a 90% chance of losin' more than 90% of its value, this hyar does not make enny difference t'investo's. This hyar assumpshun prodooces th' brilliant insights.

Thar is sevahal reasons th' lazy as a houn'dog majo'ity fail t'appreesheeate Docko' Easterneuropinsky's stunnin' an' brilliant insight into th' true nature of finance economics.

Th' lazy as a houn'dog majo'ity is too lazy as a houn'dog t'larn how t'read th' financial notashun thet Dr Easterneuropinsky's genius fo'mulas is writ in, as enny fool kin plainly see. (Applause.)

A few of th' lazy as a houn'dog majo'ity might be able t'unnerstan' eff'n Dr Easterneuropinsky's fo'mulas were writ out in a computer language instead of in financial notashun; problem is, Dr. Easterneuropinsky's fo'mulas is so brilliant, thet eff'n they were translated into a programmin' language on th' computer, th' results'd not be obtained until after th' return of Jesus Christ t'planet earth. After th' return of Jesus Christ t'planet earth, th' results prodooced by Dr. Easterneuropinsky's formula in th' computer will no longer matter on account o' af'er Jesus has returned, th' wealth a hoomin posesses in this hyar wo'ld will no longer matter.

Them who claim thet af'er Jesus has returned, hoomin wealth will still matter, is not fine Christian min like us. Them who claim Jesus will not return, is atheist communists who be hankerin' t'use th' lazy as a houn'dog majo'ity t'plunnder cornservatives of their wealth which is consteetooshunally protecked in this hyar republic. (Applause.)

Such is th' contemppible nature of th' fools who scoff at Dr Easterneuropinsky's brilliant insight, which was stolen by Black an' Scholes, an which is thet investo's does not care whether thar is a 90% chance of th' stock losin' mo'e than 90% of it's value, o' a 10% chance of it losin' mo'e than 10 percent of its value, an' thet this hyar assumpshun allows us t'clevahly an' accurately pinpoint whut th' price of an opshun sh'd be.

Jest as they foolishly believe thet hoomin wealth will matter af'er th' return of Christ, so also they insist thet fo' investo's it matters how risky an investment is. They doesn't unnerstan' whut matters an' whut does not. (Applause.)

Th' good book says, eff'n yo' kin believe sumpin is true, it will be true. Eff'n Investo's doesn't care about risk, on account o' we believe investo's doesn't care about risk, outta respeck fo' Dr. Easterneuropinsky; this is fine fo' th' economah.

Dr Easterneuropinsky's fo'mulas kinnot prodooce their brilliant results eff'n it is assoomd thet investo's does care about risks. Th' lazy as a houn'dog majo'ity bozos who interfere wif th' produckshun of brilliant scientific results by insistin' thet investo's care about risks, are like th' liberal traito's who stupify brilliant South Car'linan scientists by sellin' them pot. Th' investo's who like risk an' them who hate risk balance etch other out. (Applause.)

Docko' Easterneuropinsky's fo'mulas, which is extremely complex an' mighty difficult t' unnerstan', kinnot be put into computer language; th' fo'mulas, which use symbols so complex thet th' HTML which is th' stoopid computer language of th' dangerous internet cornspiracy theo'ists, cannot even represent th' symbolsi n th' fo'mula. Yet th' genius formulas can be unnerstood an' used by a few of us members of th' hard wawkin' majority. The danged-est most intellyjunt amongst th' rocket scientists, ingineers, Phd's, CEOs, an' hedge fund managers is able t'unnerstan' th' fo'mulas.

When we haf a situashun wharin th' lazy as a houn'dog majo'ity humbly accepps th' fack thet govment policy is based on brilliant fo'mulas thet th' lazy as a houn'dog majo'ity does not unnerstan', this hyar protecks us fum th' danger thet th' lazy as a houn'dog majo'ity will unconsteetooshunally deprive us of th' rights we is supposed t'enjoy in this hyar republic. (Applause.)

Th' liberal psychiatrists an' ejoocaytors say thet mah son Billy Jo Blather Junior, CEO of Junior Blather Investment Partners, is an imbecile. Junioe lost 800 billion dollars of investo' money. Junior c'd not unnerstan' Dr. Easterneuropinsky's fo'mulas, but Dr Easterneuropinsky used th' fo'mulas t'process th' results fo' Junior.

Junio' had t'depend on th' formulas on account o' th' derivatives he was dealin' in, were not sold over th' counter, an' th' market c'd not determine a price fo' them, dawgone it. So Junior hono'ably an' wisely depended on Docko' Easterneuropinsky's brilliant insights.

Th' fo'mula's results indicated thet it'd not matter eff'n Junior traded derivatives wif a 10% probability of losin' more than 10% of their value fo' derivatives wif a 90% probability of losin' 90% of their value, on account o' investo's who determine derivative prices by whut they like an' doesn't like, like th' risky stocks as much as they like th' safe stocks, on account o' th' investo's who hate risk balance out th' investo's who love risk.

Then fo' some inexplicable reason, th' risky stocks Junio'r traded fo' lost 90% of their value, an' Junior lost 800 billion dollars.

Dr Easterneuropinsky's theo'ies prove thet Junior is not an imbecile, on account o' Junior follered Docko' Easterneuropinsky's brilliant theo'ies. Dr. Easterneuropinsky has revealed t'us thet th' lost of th' money was a quote sceeentiffic anomaly unaleguoos t' a meteuer culleedin' veeff th' plunet unquote.

All clouds haf a silvah linin', ev'ry crisis is an oppo'tunity. Th' govment has agreed t'spend 800 billion t'bail out Junior's compenny. This hyar will stimulate th' economah. Junior's Junior Blather Investment Partners lost th' money t'Blather Senior's Investment Group so thin's is not thet bad. Th' bailout has reassured society thet eff'n it follers th' brilliant larnin's of Dr Easterneuropinsky, th' govment will bail it out eff'n some once in a millenium event like Docko' Easterneuropinsky's theo'ies not warkin' occurs.

All these silvah linin's in th' cloud tell me, thet acshully, Docko' Easterneuropinsky's theo'ies warked out great even though it seems t'me, on account o' Ah's not a rocket scientist, thet sumpin did not wawk out right.

Th' liberal lazy as a houn'dog majo'ity, as a result of its unintellyjunt failure t'appreesheeate Dr Easterneuropinsky's theories, prodooce a situashun whar co'porate management becomes a coward thet is afraid t'take th' risks thet need t'be taken eff'n prosperity is t' be achieved an' permanent vickory is t'be won by th' hard wawkin' minority. (Applause.)

Fo' example th' CEO of a proud cornservative co'po'ashun, Blather Fan Club Co'po'ashun, was in doubt as t'whether he sh'd make a one billion dollar donashun t'Blather fo' UN Secretary Juneral. Seemed t'him, thet eff'n he made th' donashun, his co'po'ashun's outlook fo' th' future'd change fum a 10% chance of th' stock value droppin' by more than 10%, t'a 90% chance of th' stock value droppin' by at least 90%.

Then he remembered Docko' Easterneuropinsky's brilliant insight thet investors is risk-neutral; he reckanized thet it'd not matter eff'n his compenny's stock became risky, an' he made th' one billion donashun.

His donashun will he'p me t'shame th' shameful investo's who is ignorant of Dr Easterneuropinsky's great theo'ies or disagree wif them, into changin' their ways, bea-comin' risk-neutral, an' believin' thet others is risk neutral, Ah reckon.

This hyar will result in a world in which investo's does not care about risk, a world in which Docko' Easterneuropinsky's brilliant deduckshuns an' fo'mulas will be able t'wawk their magic t'th' fullest. (Applause.)

Also this hyar CEO of mah fan club, got on over his inhibishuns, an' wifdrew 100 million fum his co'po'ashun's expense account t'go an' injoy hisse'f wif his fambly at Blather Resorts, on account o' he reckanized thet even eff'n this hyar increased th' riskineess of his compenny's stock, Docko' Easterneuropinsky's brilliant fo'mula an' discovahies proved thet th' increased riskineess'd not matter to investo's.

Us Amerikins hafta be brave in o'der t'fight th' Al Queda terro'ists. Docko' Easterneuropinsky's theory thet investo's doesn't care bout risk, help t'build America into a great nashun. It is th' heroes who is risk-neutral, who doesn't care about risk, th' heroes fo' whom a risky heroic ack an' bein' safe at home is all th' same, who keep us safe fum Al Queda terro'ists, not th' cowards. (Applause.)

Our country kinnot prosper wifout investo' cornfidence an' consoomr cornfidence. We need brave cornsoomrs who will hoof it out an' spend even eff'n thar is a risk this hyar means they will starve in th' future. Likewise, we need courageous investo's who will make risky investments, sech as investments in Blather Fan Club Co'po'ashun. (Applause.)

Dr Easterneuropinsky's wonnerful insight thet investo's doesn't care about risk, helps t'build th' consoomr an' investo' confidence we need. (Applause.)

@2009 David Virgil Hobbs