In the Black-Scholes equation, the symbols represent these variables: s = volatility of returns of the underlying asset/commodity; S = its spot (current) price; d = rate of change; V = price of financial derivative; r = risk-free interest rate; t = time.
It was the holy grail of investors. The Black-Scholes equation, brainchild of economists Fischer Black and Myron Scholes, provided a rational way to price a financial contract when it still had time to run. It was like buying or selling a bet on a horse, halfway through the race. It opened up a new world of ever more complex investments, blossoming into a gigantic global industry.
[ ]….Black-Scholes underpinned massive economic growth. By 2007, the international financial system was trading derivatives valued at one quadrillion dollars per year. This is 10 times the total worth, adjusted for inflation, of all products made by the world’s manufacturing industries over the last century. The downside was the invention of ever-more complex financial instruments whose value and risk were increasingly opaque. So companies hired mathematically talented analysts to develop similar formulas, telling them how much those new instruments were worth and how risky they were. Then, disastrously, they forgot to ask how reliable the answers would be if market conditions changed.
Math and science – and the underlying foundation of rationalism – are only useful if the people using them develop a sense of wisdom that is not easily overwhelmed by impulses to greed or ego. When students take quantitative chemical analysis in college their lab instructor will give them an unknown concentration of a substance. The students have to perform tests and use mathematical equations to find the amount of say copper in the sample. If you come up with a hundred and ten percent it doesn’t matter whether you carefully followed every step, made sure your glassware was clean, double checked your math – you’re wrong. You can’t have ten percent more the total amount you started with. Bankers and financial analysts never took that step back to wonder how could it be that their financial products were worth more than a century’s worth of total industrial production. You know what probably happened – according to the conservative and libertarian echo chamber that is never ever wrong, a gang of the working poor, ACORN and some hired thugs from Fannie May forced themselves into all these investment banks and at gun point forced Wall Street to ignore reality.
February 17th was the 50th anniversary of the Pill ( There is some disagreement about the exact date – year with first clinical trials, year with first prescriptions to the public, versus year fist mass marketed)
Only a few weeks into my internship I’ve already learned that the fastest way to create awkward silence, where even the cricket chokes, is by stating with the most serious face that I can muster, “Yes, I’m cataloging birth control pills at the Smithsonian’s National Museum of American History.” The most common response I get is, “Wait, you’re on birth control?” After correcting him/her, I then perk up and say enthusiastically, “You know, it’s the 50th anniversary of the Pill. Big stuff!” But enthusiasm can also lead to misunderstanding. On one occasion, while I was meticulously documenting the oral contraceptives exhibited in the museum onto a clipboard, a visitor laughed and took a photo of me—probably supposing that I was eagerly jotting down some pointers.
There is a brief photo history of changing package design at that link. This one at PBS is a little better. There is an article here that goes into some of the social good and other ramifications. One of the most profound consequences of the new biological freedom for women was the economic consequences. Not just for women, but for western free market economies. Their productivity and spending power were responsible for a great deal of the economic expansion of the last fifty years. While there is nothing wrong with choosing be a stay at home wife (or husband), but if women were somehow forced to return to those roles, that would mean a significant economic retraction.
Sounds like it was released yesterday. From 1973 – Madeline Bell & Alan Parker – Soul Slap