Getting to Zero!

Tag: Collated Distributions

Recent Bio

by on Jul.19, 2021, under About

Having spent a year (during the COVID-19 lockdown) writing journal quality papers of my experience in credit and default risk, in November 2020 I started my FinTech (S-corp.) company, Business AIR Models Inc (BAM). BAM was set up to deliver SaaS financial, credit and default risk products. I am able to do this because I have 40+ years working with data at GMAC Commercial Holdings, UMB Bank, Key Bank, Texas Instruments, PwC, Unilever, etc. in finance, credit risk, decision theory, strategy, manufacturing, medicine and physics. I have invented Asymmetric Information Resolution (AIR) Models (to infer private information from public data), Wilcoxon Regression, Collated Distributions, Default Covered-Call, Economic & Funding Statements, the Capital Premium Model and Infectious Disease Lifecycle ( I have written two monographs on credit risk and data modeling and have published 7 technical books in total.

My IQ is 164 (i.e., less than 1 in a 100,000 people have this IQ), and therefore, I think differently from most people, as some of you already know. We are the people who disrupt markets. Having said that, in my monograph “A Critique of Dodd-Frank” I proposed a new bank product HELSIS, to minimize the financial and economic impact of future financial meltdowns ( This is an alternative to, and equivalent to, the bricks of Geithner’s “Wall of Money”, that is, a distributed wall. HELSIS will reduce bank capital requirements by 34% to 58% and reduce borrower defaults by 70%.

A few years ago, I read the Fed’s bank stress test documentation, or at least more than half of it. It’s all about Dodd-Frank and nothing about the actual methods to implement stress testing. I found only 2 pages out of about 150 that actually mentioned Loss Given Defaults (LGD) and that was a repeat of industry definitions, which are wanting. So, the Fed’s bank stress test is an opaque methodology that probably cannot stand up to public scrutiny. This is a serious problem as, if you read the IHME’s models on infectious disease spread, it is very clear and open. Even though I do not agree with the IHME/Imperial College reproduction models, the IHME documentation provides us with a benchmark on how public methodologies need to be documented.

The question I’ve always asked myself, during these past 40+ years, is “how do we make decisions?” Since, having spent a decade in CMBS stress testing, influenced by Kaizen, I have narrowed this question to “how do we prevent bad decisions?” That is, since life, economy and the market environment is always in a flux, the “optimization” problem cannot be “what is the best solution, today?” It should be “what is a good solution, today, that allows us to be successful tomorrow, too?”, because tomorrow is indeterminate for non-trivial problems and real world business problems are “cycling”.

Therefore, I have developed a proprietary methodology that is based on AIR models that informs the user of a specific company’s financial and credit risk. Not just a number but a set of maps that explains why the company is in the position it is and alternative paths the company can take to improve its financial condition, in minutes. Therefore, BAM’s SaaS financial products are suitable for C&I lending, investor stock pickings, corporate managers, hedge funds and M&A participants.

Different people respond differently. In 2016, I spoke to a retired Bank of America SVP. She confirmed my and the Bank of International Settlements, working paper that banks have a risk problem in spite of the level of sophistication of their risk management tools. In 2019, I spoke to another bank VP, and she was furious about my opinions – her husband had to calm her down. In my opinion companies fail because their staff are so identified with what to think that they are unable to practice how to think. See Group-based scenario analysis is an approach to getting around the ‘what versus how to’ think problem.

Oh, yes, I almost forgot. I have an (i) MBS (Banking and Finance), University College Dublin, Ireland, 1995, the oldest graduate finance program in Europe, (ii) MA (Operations Research), Lancaster University, UK, 1982, a UK ivy league, (iii) BSc (Elec. Eng.), Aston University, UK, 1979.

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