If I needed money to pay for damages arising from pollution externalities that nobody previously paid for, where would I look?
(in English: mean reversion is a thing)
Nov 24, 2023 • 7 tweets • 1 min read
How to build a good hedge fund strategy:
1) get a bunch of uncorrelated things to bet on 2) have a predictive edge in them 3) make as many bets as possible, as diversified as possible, with controlled sizing in proportion to confidence
That's it. That's the game.
How to make your strategy better:
1) increase bet count 2) increase predictive edge per bet
May 16, 2023 • 4 tweets • 1 min read
If the US Government wont pay its debts, why would anybody else pay theirs?
Debt ceiling "accident" as catalyst for a broader debt jubilee?
To be clear, I think an accident is unlikely--too much at stake.
And if it happened it would likely be chaos, and terrible to live through.
Even if the eventual restructuring on the other side of it may have some positive attributes, this doesn't seem like the way to do it.
Jul 12, 2020 • 10 tweets • 2 min read
Fantastic article.
The incentives of the monopoly internet platforms inevitably drive their algos to foment polarisation. Optimising for engagement embeds it in the math.
That’s a core feature of the political economy we live in.
2020 #COVID19 is an income statement (earnings) crisis.
Bad balance sheets can be fixed with financial engineering -- monetary policy helps.
Bad income statements require re-working of business models and supply chains.
2/5
The problem in 2008 was all about too much *financial* leverage in the system.
But the problem now is too much *operating* leverage in the real economy with over optimised supply chains, data-driven pricing management, customer acquisition funnels etc.
Feb 18, 2020 • 11 tweets • 3 min read
1/11 This downward guidance from $AAPL has got me thinking...
Here we have a market darling illustrating the macro-dynamics of #COVID19. Its both a demand shock and a supply (chain) shock. So equilibrium output will be lower and price (inflation) impact not yet known
2/11 #coronavirus arrived in a world starting with negative real yields, ie signalling an excess of productive capacity over aggregate demand, ie low pricing power for too much (printed) capital.
Dec 12, 2019 • 28 tweets • 13 min read
1/28 Today we announced the go-live for trading of #DGLD on our exchange, @BlockchainPIT. You can see it here:
This is just one step in the ongoing rollout of the DGLD protocol, in partnership with @blockchain, @CoinSharesCo, and @MKSPAMPGROUP
2/28 DGLD is a digital representation of title to specific allocated gold bullion in the vaults of MKS (leading global refiner) in Switzerland. Think of it not so much as a gold-backed-token but rather as a literal, redeemable, digital vault receipt to actual, specific metal.
Feb 25, 2019 • 32 tweets • 5 min read
1/32 Two big overarching themes dominated the policy response to the global financial crisis. First, there was a move toward engineered asset inflation, an attempt to reflate the banks out of their solvency problem.
2/32 As discussed previously, this was highly regressive, and now there is a populist whirlwind to reap with respect to the long term implications of that policy.
Feb 4, 2019 • 27 tweets • 4 min read
1/27 The lender of last resort has a challenge when called on to act. Backstopping system wide asset-liability mismatch requires a differentiation between "liquidity problem" and "solvency problem."
2/27 But of course in a fractional reserve system the two are the same thing in the limit: when the money supply contracts, the deflationary crunch impedes the creditworthiness of assets, depleting capital, ie solvency.
