John Hull Quotes

Our starting point then was trying to find a way to incorporate mean reversion into the HoLee model.

My career in academic research has not been involved with active management of securities. I've tried to understand risk-and-return relationships; also the pricing of derivative securities.

The ancient Greeks noticed that a man with arms and legs extended described a circle, with his navel as the center.

The one thing that's always been the center of my political thinking - and it goes back to when I was 19 and editor of my college paper - is an abhorrence of the extreme.

We test everything on a one- and a three-year cycle. And you want to stress-test a model, and the three-year test usually does that because you have a growth and value bias. You have different interest rate environments.

Balance is overrated.

If you have a traditional view of economics, you're probably thinking of Ben Bernanke making Fed policy, or the guys creating financial derivatives at Goldman Sachs.

Extremes in nature equal ends produce; In man they join to some mysterious use.

In the interest rate area, traders have for a long time used a version of what is known as Black's model for European bond options; another version of the same model for caps and floors; and yet another version of the same model for European swap options.

The real challenge was to model all the interest rates simultaneously, so you could value something that depended not only on the three-month interest rate, but on other interest rates as well.

The problem with interest rates are that you are not modeling a single number, you are modeling a whole term structure, so it is a sort of different type of problem.

Our tree is actually a tree of the short-term interest rate. The average direction in which the short-term interest rate moves depends on the level of the rate. When the rate is very high, that direction is downward; when the rate is very low, it is upward.

I always seem to find myself fighting the law of equilibrium - the great leveling force that brings things to the mean and takes the 'cartoonishness' out of life. Perhaps I am doing a very unnatural thing... If Einstein were still alive I would ask him about it.

Our research led on to other things, such as the fact that exchange rates are not lognormally distributed.

Briefly speaking, our conclusion is that stochastic volatility does not make a huge difference as far as the pricing is concerned if you get the average volatility right. It makes a big difference as far as hedging is concerned.

Historically, the pull towards the center in European politics has been incredibly powerful. From Italy to Germany, it has been almost impossible for non-centrist forces to obtain real influence.

The special sphere of finance within economics is the study of allocation and deployment of economic resources, both spatially and across time, in an uncertain environment. To capture the influence and interaction of time and uncertainty effectively requires sophisticated mathematical and computational tools.

Public opinion can become polarized into a bimodal distribution with only a few people in the center and many more lying toward the extremes. But under such circumstances, democracy will probably break down …

Opinion is like a pendulum and obeys the same law. If it goes past the center of gravity on one side, it must go a like distance on the other; and it is only after a certain time that it finds the true point at which it can remain at rest.

You used to get legislation done by getting the moderates to agree. But we have no moderates now so it doesn’t get done

… triangulation is the idea that you demonstrate to some set of swing voters that you are politically palatable by poking the extremes of both parties in the eye.

Radicals have value, at least; they can move the center.

We didn't leave the Democratic Party. The Democratic Party left us.

The media increase the political nastiness while distancing voters from those clashes. Citizens become spectators. ­Headline-­driven news emphasizes the extremes, the fights, the hysteria, the sensational. Political reporters, trying to appear objective by quoting two opposing sides to almost every story, mostly sharpen the differences, slighting any centrist position.

Our greatest presidents led from the center, seeking the golden path of national unity. George Washington inspired Americans to rally around their “common cause.” Even at the nation’s moment of maximum political extremism, Abraham Lincoln moderated the abolitionists’ ­anti­slavery fervor to keep the wavering border states fighting for union. Franklin D. Roosevelt’s big-tent New Deal incorporated some changes radicals demanded while preserving capitalism. These leaders understood that a democracy, resting on the consent of the governed, requires citizens to buy into politics. They were not ­namby-­pamby wafflers, but muscular moderates, rooted in core principles but nimble, confident, and patriotic enough to compromise when ­necessary.