Image: Pascal Le Segretain/Getty Images.
Black-Scholes. Not as you might first think, a hideous pox that caused peoples faces to peel off in the 16th Century, or even a descriptor for the bruising suffered after a (rubbish) tackle from a notorious Manchester United midfielder, but according to mathematician Ian Stewart, one of the possible reasons for the global financial meltdown we are currently experiencing.
I’m not going to even attempt to explain what the damn thing means – Ian can do that – but upon reading his article on Sunday morning in a semi-conscious fugue, I found myself making parallels between that and the death of Whitney Houston.
I know. Saturday night was a hell of a night.
Y’see, Ian contends that misuse of the Black-Scholes equation, which as I understand it is used by financiers to value assets before they fully mature (he uses the example of buying or selling a bet on a horse mid-race) has “allowed derivatives to be traded in their own right“. In simple terms, people are no longer gambling on ‘real’ assets, they’re gambling on possible outcomes only loosely connected to anything real. This facilitated ridiculous growth in the markets, but it was only when market conditions turned bleak that everybody realised there was nothing tangible actually backing it up.
What on earth has this got to do with the sad passing of one of the world’s finest female vocalists? Well, maybe nothing. But despite Whitters’ six Grammy Awards, one Emmy, thirty Billboard Awards and twenty-two American Music Awards, the aftermath of her passing was essentially an unseemly scramble to publish photos of her in a state of alcohol/drug induced disarray, pious statements as to her failings as a human being and ‘think pieces’ devoted to the lack of self-control artists such as Houston, Amy Winehouse et al exhibited during their tragically foreshortened lives.
I’m not naive. I realise that the circulation of ‘The Sun’ will invariably increase massively today as few of us can live without a sneaky glimpse of ‘the bathtub where Whitney died‘, and therefore we deserve the press we get. But trading on the derivatives of people’s lives vs. real journalism is, in my opinion, leading to a black hole of morality not dissimilar to that lurking beneath a financial crisis that has led to banking bail outs, the possibility of a currency collapse and several European countries swerving perilously close to bankruptcy.
RIP Whitney. In a world that trades in unimportant details, your talent was just about enough to prevent you from being dragged down completely. The ‘stars’ of today are unlikely to be so fortunate.