Paste your Google Webmaster Tools verification code here

extreme events, hill running and financial markets

Posted by on July 10, 2010 in Markets | 1 comment

I am currently in the Scottish Highlands for ten days or so, and my outings on the hills have made me reflect on extreme events. The fact that they lie so much outside the perceptions which people have about the world makes it very hard to appreciate that they occur at all. I’ve just finished reading Gillian Tett’s account of the financial crisis, Fool’s Gold.

As I plod up and down the soggy hillsides – it has rained almost all week – I have reflected on the similarities of extreme events in financial markets and extraordinary feats of hill running. These almost literally defy belief.

For example, on the Isle of Skye lies the most rugged set of peaks in Britain, the Cullins. The Cullin Ridge is probably the single most demanding outing in the British hills. It is only 10 miles or so in length. It involves 10,000 (ten thousand) feet of ascent and descent. But the most demanding aspect of it is that there are several rock climbs up to Very Difficult/Severe standard, prolonged bouts of exposed scrambling, and hardly any flat terrain at all. Over much of the length of the Ridge, a slip could prove fatal. Now, on firm, broad tracks which involved simply putting one foot in front of the other, a strong walker would be pleased to cover such a route in 8 hours. Most casual hill walkers could not even contemplate an outing of this kind.

Yet, incredibly, the record time for the Cullin Ridge is 3 hours 29 minutes, with no climbing aids used at all. One of the peaks involved symbolises the difficulties. The Inaccessible Pinnacle is a bizarre fin of rock attached to the ridge. A rock climb is needed to gain its sloping ridge, which is for the most part about six inches wide. As you climb, you are faced with exposure such that, in a popular description, there is a vertical drop on one side and an overhanging and infinite drop on the other! Certain death awaits anyone who falls unroped. At the summit, there is a Difficult 75 foot down-climb required to get off the peak. Elite Ridge runners go up and down this peak in under four minutes – four minutes!

There are ultra-marathon hill challenges such as the Bob Graham Round in the English Lake District, for example. This is 72 miles long with 26,000 – twenty six thousand – feet of ascent and descent. Seventy two miles is almost a triple marathon. The record time is 13 hours 54 minutes.

Now, without knowledge of these feats, someone familiar with the terrain involved would find it almost impossible to imagine that such times could be achieved. They are so far outside ‘normal’ perceptions.

Humans seem to find it hard to imagine extreme events in general. With much more dramatic consequences for us all, the same inability to contemplate the existence of extreme events occurred in financial markets, traders, senior bank management, regulators, central banks. We were very well equipped to withstand a ‘normal’ shock. But not the extreme event which actually took place.

1 Comment

  1. Panduanjudi Login

    Panduanjudi is a trusted and certified poker site from PKV games server.
    We find the money for 9 types of forward-thinking games
    that can be played using just one ID. The games we give supplement poker, domino99, bandarq, aduq, sakong, bandar66 and as a consequence
    capsa susun. In auxiliary to having a large variety of
    games, http://www.Panduanjudi.com with has several attractive promos that can be enjoyed directly after monster registered as a member.
    subsequently complete weekly cashback promos that are calculated from the total
    turnover, both winning and losing. besides Panduanjudi in fact appreciate if there are
    members who invite contacts or relatives to
    play in on our site by giving a referral extra of 10% to 20% of the number
    of turnover downline invited to play.

    To be the best poker site, Panduanjudi is always irritating to adjoin our services to be skillful to provide the best experience in playing poker at our place.
    One of the ways is the Gambling lead provides a means
    of payment that reaches every elements of Indonesian society.
    By keen in imitation of leading banks and accepting Simpati and XL bank account deposits.
    As well as which players can make deposits using E-wallets such as GoPay, OVO and Funds.
    additional than those mentioned above, of course there are yet advantages in Panduanjudi to wrestle to become the
    best poker sites such as:

Leave a Comment

Your email address will not be published.

This site uses Akismet to reduce spam. Learn how your comment data is processed.