Reed Richards, Financial Engineer

Monte Carlo

I want to note the enjoyable comic book miniseries, Dark Reign: Fantastic Four. In it, Reed Richards builds “The Bridge”, a machine that makes hundreds of thousands of alternate universes, ones that he can aggregate and look at summary trends within them, so he can try and figure out what needs to be done to save the Marvel Universe. “On Earth-6679, Captain America was never found, so there was no superhero Civil War…” And so on.

It models CDS portfolios too!

It models CDS portfolios too!

There’s a power surge, of course, so while Reed Richards is looking at expected outcomes of potential futures, and how to stop or benefit from them, the rest of the crew has to fight dinosaurs and pirates and aliens.

It is worth noting because, though they don’t explicitly mention this, this technique is known as monte carlo simulation, and creating monte carlo simulation engines that sometimes spin out of control is one of the things that I do for a living.

It is also, depending on your point of view, one of the culprits behind the current financial crisis. My new goal is to have a financial engineering engine blow up so bad modeling CDS portfolios that Jessica Alba needs to rush into the office in some sort of superheroine costume to save me.

Reed Richards, Tax Structure and Brain Drain

If Reed Richards was coming out of college today, instead of becoming a Cold War scientist, who went to space to study cosmic rays that gave him and his crew superpowers, he almost certainly would have gone to a hedge fund to work. And why not? Because of a quirk in the taxation law, Richards would only pay 15% on the $250,000+ he made as a hedge fundie. If it was an investment vehicle that paid dividends, and they paid him out of dividends, his tax rate would be 17% (hence why Warren Buffet pays less in tax percentages than his secretary). He’d have to pay a little over 19% if he was making $65,000 as a government research scientist. A man has got to go with the incentives the government places before him.

Now you might say that Reed Richards would have prevented the financial crisis, and that would be a big benefit. I think it is more likely that his bosses at Annihilus Trading LLC would have wanted Reed to find a way to make the bubble bigger, allowing them to ride the momentum traders and then short the market at the perfect time, making a much bigger profit. So his ultra-smart brain may have made the crisis worse.

But even if you grant he could solve the financial crisis, who would have stopped Galactus from eating the Earth?

I understand that the greatest minds should be finding cures for cancer, solving our energy problems or engineering a substitute for aluminum, but it’s the issue that there may not be someone to stop Galactus and other assorted supervillians that really brings this brain-drain issue home for me.

Perhaps you are a fan of regressive tax structures and having the Mole Man as your King, but I am a fan of neither.

Doom Time

Quasi-related. I want to recommend up-and-coming artist Alex Lukas, whose work I was able to see in San Francisco. He has a bunch of images of cityscapes decayed and drowning. Intense stuff. He also has a bunch of prints, and I really like this one, sadly sold out:

Everytime I want to say “Well, at least things can’t get any worse”, I just picture a 1960s Jack Kirby-drawn Doctor Doom busting through the wall and tearing s*** up. Depending on my mood, either that would make things worse, or make things awesome.

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5 Responses to Reed Richards, Financial Engineer

  1. Terry Ivanauskas says:

    That’s it! I am throwing away the academia papers and buying more comics. Hopefully I will understand the world better =)

  2. Pingback: Superhero Registration Act « Rortybomb

  3. May I steal this the next time I teach Monte Carlo?

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