Tag: financial crisis
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Markets Potpourri
A smattering of thoughts: layoffs, AI bubble, Trump policy, crypto, Fed repo actions, fraud. Structural changes to US economy -> labor for infrastructure Verizon is the latest in a swath of tech companies laying off corporate staff, announcing it’s cutting up to 20% of it’s workforce. In recent weeks, Target Corp. announced plans to eliminate 1,800 roles,…
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Room to run: AI and Markets
The advances in Artificial Intelligence (AI) are expected to significantly impact workforce and education, despite cultural adaptation lagging behind. Major companies are heavily investing in AI models, presenting immense opportunities for growth. Additionally, the financial landscape is shifting due to high interest rates, influencing equity market dynamics and pushing for more private credit.
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What’s the Point, Powell?
Thoughts of a Liberal Arts Graduate on the Fed, interest rates, inflation, demographics, and more The entire point of low interest rates was to shift consumers up the risk ladder. Lower potential returns in lower risk baskets purposefully pushed investors toward riskier options; pushed them to take more risk, for the same reward. The Fed…
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Get Paid to Take Risk
Is the risk-reward trade-off broken? Historically smaller companies have higher stock price returns, but this relationship has faded since 2008. What happened and why aren’t investors being compensated for taking more risk? Table 1.1 shows how small-cap stocks have performed relative to large-cap stocks since the Great Financial Crisis in 2007-08. There is more volatility…
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Government vs. Free Market: Crashes of the Past 100 Years
Were the most significant drops in financial markets a function of unstable free markets or government intervention? Nassim Taleb, author of bestseller The Black Swan, often speaks on the danger of putting abnormal events in tidy boxes. Readers should be aware that there are many factors influencing markets at any given time, and by assigning…
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Who’s got the power?
When interest rates go up, and they will, the 50% increase across the board will topple markets, namely bond markets. Today’s interest rates are unprecedented. The lowest possible bound for an interest rate USED to be 0%. In finance terms, we call it the ZLB or the zero lower bound. Today bond yields in Germany…
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Vices
I recently quit chewing tobacco, and, as many former nicotine addicts know, your brain does this crazy thing where we try to rationalize our use of the substance. I would say to myself, “Well, everyone has a vice, right? Whether it’s caffeine, food, booze, wasting time on Instagram, etc…. You name it and I guarantee…
fungible thoughts 
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