Wall Street Analyst Explains The 'Catastrophe Process' That's Unfolding In Front Of His Window

A beautiful, and philosophical little note from SocGen FX analyst Sebastien Galy, which he just blasted out to clients.

Winds accelerated sharply and the pier in front of our building is now a third under water (see picture). There are still folks having a walkabout. Why not? it’s a once in a lifetime opportunity….  In the insurance field, they call it a catastrophe process.

Once you reach certain thresholds, things start to break down explosively (a dam) or snowball (literally as it is used in modelling avalanches as far as I remember from some colleagues in my university days).

Galy sent along this picture of Manhattan, taken from his place in Hoboken:

Manhattan Hurricane Sandy

Photo: Soc Gen, Sebastien Galy

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