anecdotes

“The most common example is a ball sitting atop a hill,” she said, polished accent, hint of condescension. “Locally stable, but one nudge and it’s all over.” She drove terribly fast, discussing Minsky Moments; the idea that persistent stability breeds instability. “Naturally each cycle is different in key respects, and that’s because you’re far better at preventing past problems from recurring than new ones from aris

“The trajectory will be a bit like the market,” said my friend. I’d reached out, looking for direction, a path. A recent knee operation has left me on crutches. A gimp. Which is no big deal but for the fact that my long daily walks, runs or cycles are off the table for three months. Perhaps more. “The long-term trajectory is up and very rewarding,” he continued. As a young man, I filled my life with noise. Commodity

“China’s financial system is a hermetically sealed snow globe,” he said. “They’ve built a system to resemble ours on the surface, but scratch it and you discover something altogether foreign.” China has banks. They lend money. But pierce the patina and you find a vast subsidy machine, with no cold-blooded allocation of capital. There are no defaults to speak of; just bailouts, no reckonings. “The appearance of a mode

“Every single trading decision leads to another,” said Roadrunner. “And when you get offsides in a market, it’s difficult to get back in sync,” explained the biggest market maker in equity volatility. “So I spend my quiet hours going back in time, revisiting the series of events and decisions that led me to the present.” The world rushed past us, a never-ending flow, and I recalled a point far upstream when we first

“When a measure becomes a target, it ceases to be a good measure,” said the Englishman, stepping outside of himself. “That’s Goodhart’s Law.” Charles Goodhart observed that central banks measured money supply, and found certain M1 growth rates to be optimal. But once they targeted that optimal range, M1 lost its value as a measure. Market and economic actors adjusted their behavior to game the M1 system. So central b

“Whatever investment style you adopt will blow up someday,” said the CIO. “When that day comes, will you fold or double down?” he continued. We were discussing systematic investing. I see its future dominance and am building my firm accordingly. “If you’ve surrendered control to a machine, how will you make that decision?” he asked. Before I could answer, he supplied his own. “I’d rather practice making decisions alo

“Any other thoughts on the matter?” he asked. We’d spent quite some time discussing Bitcoin, Ethereum, and copycat cryptocurrencies popping up faster than North Korean nukes. I mostly listened, he knew far more about the subject; blockchain, distributed legers, mining, halving, hash rates. Unlike the S&P 500 realized volatility’s collapse to 8%, these new creations are realizing at 90%. Which makes them attractiv

Anecdote: My life in four acts: Act I: Coffee with my wife [building a portfolio to withstand known unknowns] Eric: I ordered a coop that can house 8-15 chickens. Mara: Why so big? I swore we’ll never have more than four chickens at a time. Eric: I’m trusting my instincts on this. Act II: Fresh from the farm [recognizing signs of an impending bear market] Mara: We bought six chickens! Eric: Six? I thought we’d never

I love movies. Scary ones especially. Keep your happy endings, give me chainsaws. Meat hooks. I’ll never forget ERM in 1992. That was my first real snuff flick as a Lehman prop trader. The Italians never stood a chance in the film, they never do. Show me an Italian who can resist a dark woodshed and I’ll show you a hero in a hockey mask. At least the Swedes put up a fight in the flick. Their central bankers raised ov