Just one quick snapshot from the battlefield of the war for the financialization of everything. Here is a reputable scholarly blog on energy policy, and here is a recent interesting post by a guy who, after a short apology (about the provocative character of the message, given the nasty circumstances) advertises a book in which it is shown that “mean-variance portfolio theory pioneered by the Nobel-prize winner Markowitz in the 1950s can be applied by utilities managers and energy policy planners to optimize generation portfolios to maximize returns and limit their risk exposure”.

There is a funny comment, though, by another folk who seems to be pretty much into energy derivative’s maths:

“I don’t mean to be disrespectful, but Hello!!! Mean-Variance Portfolio Theory in the role of “risk management tool” just BUSTED a whole lot of banks and hedge fund (following pretty soon)!”

Before going straight to the inevitable Taleb link, the commenter provides the following civilizational, post-quantitative statement:

“It’s absolutely wrong to overoptimize something like power generation and power grids, our lives depend on them and there must be double, triple and quadruple redundancy if you want. That costs a lot of money, but it’s essential to the integrity of the civilization as a whole.”

Given that after a couple of weeks no further comment did pop up to contradict that, it has been decided on behalf of everybody involved in this thing called civilization that this commenter is right — thanks.


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