Less turnover means more liquidity in the new finance world…PLUS a bonus Fed bloglet!

Michael Lewis famously lambasted Salomon Brothers clients in Liars Poker thirty years ago as being intellectually inferior and ignorant to the risks they purchased from the savvy Wall St bankers. The 3-6-3 club (borrow at 3%, lend at 6% and be on the golf course at 3pm) is a story Lewis relates about his sucker […]

Blockchain beware: Old Systems Title and non-Markov processes

“Possession is 90% of the Law” is the famous, unattributed saying in English Common law. In the context of proving ownership of an asset, being in possession of that asset makes a pretty strong presumption that you own it. The problem with assets that are electronically generated, registered and traded is that they do not […]

How should I know what to do, I’m just your fiduciary?

“It’s a very simple principle: You want to give financial advice, you’ve got to put your client’s interests first.” – President Barack Obama, February 23, 2015 From time to time my avid reader base suggests the topic for one of my blog posts. My good friend Ted, drew my attention last week to the new […]

The resurrection of Friedman’s money laden helicopter

At the height of its influence in the late 60’s and early 70’s, Monetarism held that money expansion could have powerful short term effects on GDP and Employment. This appealed to policy makers since it offered a cheap way to manage the macro-economy and elevated Milton Friedman to rockstar status. Quite honestly, Friedman would have […]

ECO 401: Studies in Monetary Stupidity

Way back in my first year of Grad School, I enrolled in ECO 401: Studies in Monetary Theory. To my amusement and surprise, the entire semester was spent deriving the Basic Neo-Classical Model and its extensions within the ‘Real Business Cycle Theory’ framework. RBC was the most promising development in macroeconomics for decades. The amusing […]

Negative interest rates: The cost of monetary saturation?

I have banged on many times about the drastic collapse in the velocity of circulation of money. This is a fancy way of saying that banks and individuals don’t want to hold the money that the Central Banks have been throwing at them for a decade. Despite the attempts of the Central Banks to ‘reignite […]

A leader is born

It is said that 2 things drive ambitious people: Money and Power. Those that prefer money gravitate toward finance and business where they can live relatively private lives with the comforts of wealth. Those that prefer power gravitate toward politics where they are publicly scrutinised, but get to impose their beliefs on the lives of […]

Netflix attempts a Global Optimisation … plus the latest release from DJ Dr Fish

If you are like me, you tried to steer clear of Operations Research at university for as long as you could. OR, for those of you who either don’t know or delightedly forgot, is the practical application of optimisation methods to real world problems. Dull but really important if that’s your bag… Netflix has emerged […]

What happens if I know that you know what the Fed knows?

“For all the talk of the challenge facing officials as they orchestrate higher rates with so much money sloshing around, Thursday’s market operations weren’t much different in scale than previous days. And the benchmark rate rose 0.2 percentage point, or 20 basis points on Thursday — practically to the middle of the Fed’s intended range.” […]

The ETF’s subtle advantage over a mutual fund

There is nothing original in this post. However, with a number of mutual funds closing their doors over the last few days, I thought it might be worthwhile discussing why an ETF structure should be more resilient than the standard mutual fund. ETF’s and mutual funds are both derivative securities. Their intrinsic value depends on […]