These are paranoid times in America, but justifiably so, and when I became Chairman of the Award Committee that eventually nominated Jon Ingersoll to be the recipient of the 2002 Financial?Engineer of the Year Award, I spent a lot of time looking for signs and hints and portents of what this meant, and how it was connected with what else was going on in the world.
Soon, as I scanned the newspapers and read the weblogs, I started to notice intriguing connections and synchronicities. Everywhere I saw mnemonics and symbols, signs of deeper meaning, of the subtle and previously unnoticed connections between the IAFE, quantitative finance, Jon Ingersoll and the larger world. I spent many weeks unshaven and in a bathrobe, eating cornflakes for supper and searching the internet.
It all started to make sense in its own way when I realized that the fabulous dinner tonight was going to be held at the U.N., whose head is Kofi Annan. Now I used to work on AdjustableRate Mortgages for a few years, ARMs to the cognoscenti, and I thought: was it just a coincidence that Mr Annan?s first name stood for the Cost Of Funds Index used to index Adjustable Rate Mortgages? Was that perhaps why Mr Annan was just a little bit slow in forcing Iraq to disARM?
And what, I started to think, is the significance of Hans Blix? You don?t need to be a rocket scientist to see that with a last name like that he must have a fondness for volatility indexes.
Then I began to think about Ingersoll. If you grew up in finance in the ?70s or ?80s, you cannot see the letters C- I-R without immediately thinking ?Cox-Ingersoll-Ross.? These are three men who stood at the base of much of derivatives theory and all of them are here tonight. Ingersoll will shortly be addressing you, and Ross will speak too. Now Ingersoll and Ross?s initials give you and I – R, and ?the base? of course is the English translation of Al Qaeda, A – Q for short, and late one night I began to realize that I-R-A-Q might well stand for Ingersoll Ross Al Qaeda. The connections between the IAFE and current world affairs kept growing.
Then I was told that Jon Ingersoll?s friends call him Jon Ing for short, and that sounded a lot to me like Kim Jong Il, the dear leader of N. Korea. Too many coincidences here.
Finally, last Friday, listening to a talk at NYU by Richard Lindsay on derivatives regulation, I made the final connection. When he mentioned that in the Nineties many people began to realize that derivatives were evil, I clicked. Aren?t the gigantic positions held by derivatives trading desks called AXES by people on the Street, and therefore aren?t they really AXES of EVIL, and therefore isn?t tonight?s honoree, right in the heart of the U.N., really Dr. Evil himself? I would say so.
Well, let me tell you how Jon Ingersoll got to be Financial Engineer of the Year 2002.
The selection process for the 2002 Financial Engineer of the Year began in the Spring of 2002 with my selection as Chairman of the Award Committee. In May of 2002, the membership was invited to make nominations for the award. By the closure date for nominations (September 10th) a great many nominations had been made.
In keeping with a practice begun several years ago, the committee limited consideration to those nominees who had received multiple nominations. This helped shorten the list considerably.
Following the closure date for nominations, the rest of the committee was assembled. The committee included most of the IAFE senior fellows and representatives of each of the IAFE?s governing boards. Specifically, the voting members of this year?s selection committee included:
1. Emanuel Derman (Committee Chair)
2. Cristobal Conde (ex officio, SunGard, sponsor of the award)
3. Tanya Styblo Beder (ex officio, IAFE)
4. John Cox
5. John Hull
6. Robert Jarrow
7. Andrew Lo
8. Harry Markowitz
9. Leo Melamed
10. Robert Merton
11. Stephen Ross
12. Franco Modigliani
13. Paul Samuelson
14. Myron Scholes
15. William Sharpe
16. Mark Rubinstein
13. Leslie Rahl (IAFE Full Board Member, corporate sponsor)
14. James Ashton (IAFE Full Board Member, corporate sponsor)
15. Juan Pujadas (IAFE Full Board Member, corporate sponsor)
16. Steve Vinson (IAFE Advisory Board Member)
17. Richard Sandor (IAFE Advisory Board Member)
18. Stephen Figlewski (IAFE Full Board Member, Co-Editor Journal of Derivatives)
19. John Ruzicka (IAFE Advisory Board Member, European Division Governance Committee)
20. Barry Schachter (IAFE Advisory Board Member, corporate sponsor)
21. Michael Payte (IAFE Advisory Board Member, European Division Governance Committee)
After each voting member cast their ballots, the ballots were tallied. I am most pleased to announce that the choice of this year?s committee is indeed Dr Evil, Jonathan Ingersoll.