Sometimes there are so many random variables that one needs to deal with all at once. It kind of gets on to your nerves. Most of the variables are stochastic in nature. The distribution for each of these variables X(t) changes for each day. It looks as though X(t) follows a known distribution for a given t. However as t increases, one starts seeing the distributions are no longer stable. There are jumps / non random behavior beyond comprehension.

Media is touting that Mumbaikers are back to their normal activities . Media is using the word “Resilient”. Well, it is more a “Resigned Mumbai” than a “Resilient Mumbai” where the common man has to just go on with his activities, come what may. What else can he do if the elected government / administrative machinery fails to put in adequate safety measures? Movies like “A Wednesday” are a fantasy in common man’s imagination.

For plain vanilla interest rate derivatives option seller/buyer, it is very important that his position is delta hedged. Reason : He can make money on gamma .Or he can enter in to an exotic derivative(similar to forward start option) where he need not delta / gamma hedge . Make money trading vega. However that was not the case with Indian Banks as RBI has strict regulations where banks were forced only to take short positions!

Pic says it all! A resident takes cover for possible return fire as National Security Guard commandoes fire at suspected militants holed up at Nariman House in Colaba

Its a scary sight in mumbai. It has been more than 20 hours since the first explosion happened and the hostage crisis, the fight between police and terrorists continues. Disgusting day in the life of any Indian. One can only hope the situation comes back to normalcy(if that word “normalcy” makes any sense, any longer, for the victims) soon. Link : Hours of Chaos