Change and decay in all around I See. Advances in mutagenesis research (1991). Edited by G. Obe. Springer‐Verlag, Berlin. 197pp. DM 198

Monday 3/28/94 Derivative Surprise! With exquisite timing , Matt starts at Hercules International Management in Minneapolis. We're on the 20th floor of the Piper Jaffray Bldg and share space with Piper Capital Management (PCM). In the next ten days, PCM would misprice a major fund which was tanking due to a huge concentration of derivatives, resulting in major losses to investors, a loss of several billion dollars under managament, many lawsuits, fines and SEC actions. I was oblivious, having to deal with my new position, find the bathroom, etc., but it was an uncanny bit of timing! The SEC rulings are all online and make interesting reading, for me anyway. The point? Leverage, one-way bets, pricing problems and not understanding derivative risks can get you in trouble. It's nothing new. Tuesday 12/6/94 Derivative Surprise!: Orange County, California, declares bankruptcy! Treasurer Robert Citron has made great returns. The way you do this is take big risks. Everybody squinted real hard and didn't look too closely, but when interest rates went the wrong way, his big reverse-repo and inverse-floater derivative positions tanked. His bankers needed more collateral, there was a run on the fund by municipalities, and it went belly-up. The loss? About $1.6 Billion. The point? Derivative losses, excess risk and bank runs are nothing new.