Jacob Goldstein: How Two Guys in a Room Invented a New Kind of Money [Money market mutual fund]

How Two Guys in a Room Invented a New Kind of Money Here is the standard story of the 2008 financial crisis: Shady lenders gave ridiculous mortgages to unqualified buyers of overpriced houses.The ridiculous mortgages were then bundled together, sliced up, and sold off to investors.When housing prices started to fall, the unqualified buyers couldn’t … Continue reading Jacob Goldstein: How Two Guys in a Room Invented a New Kind of Money [Money market mutual fund]

“Financial professionals are just ordinary people captured in a system they largely did not create, and largely do not understand, but who learn how to operate small parts of it.”

while I learned many things as a broker, the one lesson that stands out to me is that there is no requirement to actually understand the monetary system to do high finance. Consider this metaphor. An artist might paint beautiful pictures, and yet know nothing about how paint is produced, or even what it is. … Continue reading “Financial professionals are just ordinary people captured in a system they largely did not create, and largely do not understand, but who learn how to operate small parts of it.”

Stock-Bond Correlation

Source: Positively Negative: Stock-Bond Correlation an Its Implications for Investors (2019) The relationship between the returns of equities and government bonds seems to be perpetually on the minds of investors. This is understandable. U.S. government bonds have come to be viewed as a safe-haven asset, providing relative stability in times of economic uncertainty and an effective … Continue reading Stock-Bond Correlation

The 2008 GFC: Asian savings glut or European banking glut?

This study analyses two hypotheses that ascribe the US financial crisis of 2008 to capital inflows. The Asian savings glut posits that net inflows into high-grade US public bonds from countries running current account surpluses led to the housing boom and bust. In sum, an excess of savings over investment abroad led to an excess … Continue reading The 2008 GFC: Asian savings glut or European banking glut?

Stanley Druckenmiller: What is the biggest mistake you made and what did you learn from it? [Dotcom bubble]

1) Five years ago, Ken Langone asked Stan Druckenmiller, "What is the biggest mistake you made and what did you learn from it?" 2) Druck said in 1999, after Yahoo and AOL had already gone up ten-fold, he decided to short internet stocks. He placed a $200 million bet in February and was down $600 … Continue reading Stanley Druckenmiller: What is the biggest mistake you made and what did you learn from it? [Dotcom bubble]