Sublime

I will tell you the secret of getting rich on Wall Street. [Pause.] Close the doors. You try to be greedy when others are fearful and you try to be very fearful when others are greedy.§

There is a connection between singularly focused federal regulation and having the world's most competitive derivatives markets.

Without ever tapping outside capital, Jane Street had gone from a few traders with a few million dollars, in 1999, to roughly two hundred traders working with several billion dollars, in 2014. One big reason was ETFs, whose global value had grown from less than $100 billion to $2.2 trillion (on its way to more than $10 trillion in 2022).

In the middle was John Paulson. At the top was Steve Eisman.

Sam found lots of trades whose success turned on the idiocy of some other trader or trading algorithm. Asher trades. For a two-week stretch, Canada’s main stock market index behaved weirdly at the opening every morning. At 9:30 it would pop higher or drop lower with unusual violence and then, at 9:31, revert to its previous levels.

Wall Street invents financial contraptions with features that are too complicated for many buyers to evaluate properly. For those who understand them better than others, these inefficiencies are profitable precisely because they dupe the unwary victims. Customers may know that a fund is leveraged but not realize that this feature makes it a wasting