Greg Newton, Rest in Peace

Greg Newton has passed away. He was a witty and incisive contributor to the economoblogosphere.

Newton warned in September 12, 2005 that the Gaussian cupola, the basic mathematical trick used for pricing credit derivatives, was not entirely suited to the weight it was being made to bear. That blog entry ended with the words "tick, tick, tick."

In recent months, other analysts have returned to the issue of the Gaussian cupola and its over-use. They have had the benefit of hindsight -- but it was Greg who warned us that the timebomb was ticking before it went off.

Until the day I die I expect that I'll consider it a badge of honor that Greg gave me a "forelock tug" in August 2007. That was when a committee of the US Senate issued a report on the whistle-blowing controversy surrounding the SEC and former staff member Gary Aguirre. Greg was covering the story of what he called "L'Affaire Aguirre" closely. He ran an item on August 6 entitled "Empty suits and selective 'enforcement'" in which he expressed the hope that the chairman of that agency would soon "be greeted with a stack of resignation letters from several senior members of the division of enforcement, and the agency's inspector general."

When I read that I had just written a story on Aguirre myself for my former employer, HedgeWorld. As part of preparing that story, I had learned that the IG was no longer around. His office told me he had just retired. Quelle coincidence!

I hadn't made enough out of this at the time, but I did pass the information along to Greg.

On August 8, Greg wrote this, "One Down: Stachnik Out as SEC IG."

I'm the "Mr. F" referenced at the end of the piece. So my life hasn't been entirely in vain.

I took vastly more from Greg's blog than I was able to return to it. One of his most memorable calls came just one year and one week ago, involving the country of Angola, a country which (I'll keep this in mind if I'm ever in trouble) has no extradition treaty with the United States. Greg managed to find the most newsy nugget in a 280 page court filing involving the demise of the Plus Funds.

So here's to him. One last long forelock tug of my own.