Especially the part on fractional reserve banking was given not much more than 2 minutes in a grad programme with lecturers from commercial banks.

I can follow the arguments of Benoit Mandelbrot with his fractal geometry model to better assess market risk than with the Gaussian bell curve, also thanks to reading Nassim Taleb.

Scholes Does Not Want to Discuss His Option Formula Anymore

Myron Scholes fled me at recent panel discussion in Vienna when I wanted to interview him on whether the Black-Scholes options formula is still valid in the time of frequent occurrences of black swan events.
And, interestingly, has anybody heard anything about Harry Markowitz' model of risk free portfolio diversification recently?

I hope not to offend any economist when stating that the financial sector is only interested in all calculations where there is a currency sign in front of numbers. No bond salesman understands convexity but only knows that it's a good sales pitch (this wisdom taken from Michael Lewis' "Liars Poker".)

As I am most interested in everything that helps me sharpen my forecasting potential and especially keeping it in a style so the interested layman/investor does not fall asleep while reading it I'd like to point out that there were no complex formulas needed to see the USA's change from biggest creditor to biggest debtor in the world.

It is trends I am keen to recognize as early as possible and so far I have a fairly good track record from what I can read from yield curves in connection with industrial production figures, current accounts, unemployment and other key macro indicators. I cannot see how a formula could have helped me better to see changes in banks' lending than a few calls to bankers (the Fed calls this anecdotal information), but then again I am maybe ignorant due to my failure to understand anything that has 2 Greek letters in it.

Read Schumpeter: No Formulas Or Fancy Charts Make It Actually Entertaining

Coming to the Austrian school, where I got erased from the mailing list of Austrias Friedrich von Hayek foundation after I enraged bankers with my libertarian view that we should shut down the rating agencies and send bankers back to do their homework, i.e. assessing risk. Bankers alphabet only included AAA to C and now they are in the costly process of learning that the alphabet continues to D(efault).

Irving Fisher: The Economist Gone Broke Weeks After His Infamous Remarks on Wall Street

Irving Fisher's infamous statement from Sep 1929 that stocks will remain forever on an elevated plateau is as much a joke as was Abby Cohen's 2000 "new paradigm" that internet stocks were to dominate stock exchange listings and would outperform in the long run. Fisher lost all his money in the crash and spent the rest of his lonely life in a condo paid for by others.

In this context I also have my problems with Josef Schumpeter and his euphemism of "creative destruction" i.e. recession, a process where over capacity in some sectors gets wiped out again.

In Austrian history Schumpeter's name will forever be associated with the fact that he was the first finance minister of the young Austrian republic who acquainted us with an acceleration of inflation into the triple-digit area.

Schumpeter resigned from this post after only a few months and later founded his own bank which went belly up in the early 1920's.