economics

At that time the short U.S. swap spread, the European cross-swap trade, and the short volatility trade were by far LTCM’s largest trades.

Industrial profits rose 1.4% on a YTD basis compared to a year ago and 3% y/y compared to 2.6% y/y in March. This was stronger than markets expected and reflects higher earnings in the equipment and high-tech manufacturing sectors. Private enterprises continued to outperform at 4.4% on a YTD basis, followed by foreign invested at 2.5% y/y and

Importantly, these barriers often strengthen over time, as high returns on capital throw off abundant free cash flow which is in turn reinvested in the business.

They asked a basic question of their portfolio: If we can find many different arbitrage or relative value strategies that all look individually attractive, might they look even better when combined in a certain way?

What Do You Do With an Idea?

One of the joys of parenthood is that you get to read a lot of books with your kids. One of my favorite books to read with Dev and Maya is Kobi Yamada’s What Do You Do With An Idea?

Illustration by Mae Bostrom

I don’t want to spoil it, but after feeling a little embarrassed by his idea, trying to hide it away and

And as was the case during the Mexican crisis, it required a major lender to provide a liquidity facility to end the vicious circle of liquidating assets, plunging collateral value, and more forced liquidations.

With regards to the workings of the capital cycle, investors focus on current (and projected) future profitability but ignore changes in the industry’s asset base from which returns are generated.

During the stagflation phase, thus, economic inequality increases within each social stratum—peasants, minor and middle-rank nobility, and the magnates. Growing inequality creates pressure for social mobility, both upward and downward. Increased social mobility generates friction and destabilizes society. The growing gap between the poor and rich

Toolmakers operate at the very bleeding edge, coming up with brand new science and technology, with a primary focus on the science and technology themselves.