When (Not If) Robots Take Over

We'll know the robots are taking over when CAPTCHAs begin to look like this.

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Another Root of Evil

Premature allocation of requirements is the root of many system architecture evils.

(With a hat tip to Donald Knuth, who coined: "Premature optimization is the root of all evil.")

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Si Senor, I think with an Accent

Actor Giancarlo Giannini delivers a memorable line in the movie "A Walk in the Clouds". Giannini plays Alberto Aragon, a Mexican father, very protective of his daughter.  He reminds a younger American man (played by Keanu Reeves): "Just because I talk with an accent doesn't mean I THINK with an accent!".

He's right, however, he's only partly right.  He does think with an accent -- WE ALL THINK WITH AN ACCENT. 

Our 'thinking accent' is formed by our age, base intelligence, education, cultural background, industry, personal experiences, personality, values, fears, intentions, and so many other factors.  It makes each one of us see and process things differently from others.

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A Collection of Short Posts 2

 Short posts I made on LinkedIn

Do rewards motivate people to behave in the desired manner, or do they just attract people motivated by rewards?

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Soldier pinned down by enemy fire: "Fire Control, this is Foxtrot. We need close air support now! Over."

Fire control reservist (who is a Business Analyst in civilian life): "Foxtrot, that's a solution, not a requirement. What do you REALLY NEED? Over"

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If you fail to plan, plan to be agile.

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If you like putting out fires you should be a firefighter.

If you like recovering after a fire you should be in disaster recovery.

If you like tallying up the cost of fires you should be in accounting.

If you like analysing tradeoffs between the risk of fire and cost of prevention you should be an analyst.

If you like preventing fires you should be in safety or quality.

If you like monitoring distant fires and where they are heading you should be in risk.

If you like playing with fire you should be a scientist.

If you like harnessing fire you should be a manager or engineer or entrepreneur.

If you like starting fires you are just an arsonist.

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If you attended a course that teaches how to do better in IQ tests, and you did get higher scores afterwards, did your IQ get higher, or did you just learn how to do better in IQ tests?

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A Collection of Short Posts 1

 A collection of short posts I made on LinkedIn:

The MoSCoW priority labels coincidentally also describe Hitler’s and Napoleon’s changing attitudes toward capturing the eponymed city:

Must have it
Should have had it by now
Could have it still if only
Won’t have it.

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Not everything that matters can be measured
Not everything that can be measured matters

To twist JFK’s words:
Ask not what you can measure
Ask what measures can do for you

To badly paraphrase Einstein:
Everything that matters and can be measured must be measured, but no simpler

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Carpe diem caveat – “Seize the day”, not “cease the day”. The intention may be the former; the result may be the latter.

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Continuous improvement must seek to do two things: make existing processes better, and stop introducing new bad processes in the first place.

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Remind your audience that THERE IS such a thing as a stupid question -- it’s the question you keep to yourself.

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Lots of people talk about 'Systems Thinking'. What's the verb for doing systems thinking it? Shh... be quiet, I'm systems thinking!

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If you believe that user stories are requirements, try calling them 'user requirements'.

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What's the term to describe the opposite of scope creep -- when scope keeps getting reduced because we're running out of time or budget?

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I Have A Joke, But...

Inspired by, "I have a statistics joke, but it's not significant" (floating on the internet)...

I have a project management joke, but it's still in the concept phase.

I have a risk management joke, but there's no appetite for it.

I have a requirements analysis joke, but it's not functional.

I have a logistics management joke, but I can't deliver it properly.

I have a Scrum joke, but it's not empirical enough.

I have a Scrum joke, but we'll have to do a retrospective afterwards.

I have a Lean joke, but I never remember it just in time.

I have a Kanban joke, leave your card here and I'll tell it to you.

As an Agile proponent, I want to say I have a joke, so that people can get amused.

I have a systems thinking joke, but I have to say it with 30 others jokes before you'l get it.

I have an andon joke, but you have to stop me if I'm telling it the wrong way.

Central Counterparties (Chapter 2)

 

Central Counterparties: Mandatory Clearing and Bilateral Margin Requirements for OTC DerivativesBilateral
by Jon Gregory
Published 2014

(Part of my undertaking to read Chapter 2 of books in my library.)

This book was published in 2014, so there will be some contents that are out of date.  A lot of activity has occurred in the central counterparties regulatory world recently.

Many derivatives contracts, such as options, and futures, are traded on an exchange. In an exchange, derivatives contracts are standardised. Standardisation leads to efficiency and tradeability.

While originally, contracts where traded on an exchange where the exchange served merely as a witness, and not a counterparty to the trade.  If a trading party did not live up to the contract, the exchange would fine them or even expel them.

Only approved firms and individuals may trade in an exchange.

Exchanges facilitate margining and netting between trade counterparties, which reduce the magnitude of risk for each side.

There are 3 forms of clearing: direct clearing, ring clearing, and complete clearing. Direct clearing is where each party delivers their contract obligations to the other. If there are offsetting trades, often the practice is to just net the difference, a practice called "netting", or "payment of difference". Ring clearing is an expansion of direct clearing to more than two parties. The parties must agree to join the ring. If A must pay B, who must pay C, then C can receive the payment directly from A. The exchange itself is not a participant other than an enforcer of rules. A disadvantage of rings is that a quality counterparty may be replaced by one that has lower credit quality. Not everyone in the ring benefits. Complete clearing extends and improves the ring by placing the exchange as a central counterparty to all parties. A party no longer has to worry about the credit rating of their counterparty; the exchanges assumes the rights and responsibilites of the counterparty.

Of course, if an exchanges assumes the obligations of a party, it must protect itself from exposures arising from an insolvent party. Two ways to mitigate the exposure is through the practice of initial margins and variation margins.  In addition to margins, a method of loss sharing is also implemented. One practice is requiring all members to make share purchases.

There was resistance to this concept early one: firms with high quality rating felt they lost their advantage over lower quality firms because a firm's credit rating became irrelevant.  The counterparty service can be provided by the exchange, or be provided by another firm offering that service for the eschange.

All derivatives market clearing service became standardised and used central clearing until OTC's arrived on the scene.

To be continued...

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