Epstein Secrets

9 MONEY MANAGERS MOVIII TO U.S. VIRGIN ISLANDS • Page 2 of 4 "Yes: Mr. Epstein replied, according to an official transcript of the hearing. The Bush administration is sending mixed signals about the program. On one hand, the Interior Department, which has jurisdiction over the U.S.Virgin Islands,

anywhere else, including special tax benefits." "President Bush would like us to help foster an environment where

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ff. To trade options, one had to value them, and to value them, one needed to be able to master such abstruse mathematical confections as the Black- Scholes option-pricing model. For Epstein, breaking down such models was pure sport, and within Just a few years he had his own stable of clients. "He was n

tween the capital K and it's financial equivalent W. We will assume that total K = total W, and so as

who is able to model bubbles with a degree of precision. The use of statistical mechanics in economics is even more frustrating. Merton, Black and Scholes cherry-picked the diffusion equation from thermodynamics while completely ignoring its statistical mechanical roots and derivation. They then sledge

onsidered it and rejected it on other grounds. J. W. Gibbs served as Irving Fisher's thesis adviser a

work was largely forgotten. The use of random walks in finance was rekindled and ultimately led to the option pricing formulae of Merton, Black and Scholes. Unfortunately the random walk process has been removed from it's many body background, and individual prices are treated as moving randomly isolat