One of the best podcasts I listened to this year.
Single biggest insight is that companies have complicated capital structures, that this is value-creating by assigning risk to people who want it, and that other things can now have complicated capital structures due to tech.
Single biggest insight is that companies have complicated capital structures, that this is value-creating by assigning risk to people who want it, and that other things can now have complicated capital structures due to tech.
"Complicated" in financial engineering gets a bad rap much like it does in software engineering. The enemy isn't complexity, it is abstractions which make the complexity illegible.
The world largely misdiagnoses the 2008 financial crisis as being a result of complexity, incidentally. The underlying fault was in simple debt instruments (mortgages) in a really straightforward fashion (inability to pay as agreed).
The flow-forward of the losses was complex.
The flow-forward of the losses was complex.
