It’s the last day of the year, so it’s time for the tradition of trying not to think about how you failed at your New Years resolutions. The making of New Years resolutions is a durable tradition, but not because it works at its stated goal: New Years
M. King Hubbert has a rare distinction among prophets: first they ignored him, then they laughed at him, then they fought him, then he won. And then he lost. From 1860 through the mid-50s, US oil production followed a smooth exponential curve. (I don’t mean “exponential” as in “growing
“Don’t immanentize the eschaton!” I felt a tinge of envy every time I heard this catchphrase. It’s a double-barreled term — you’ve got your fussy Latinate “Immanetize” and your stately Greek “eskhatos,” and you get to dismiss something as both woolly utopianism and a threat to civilization as
Buybacks by quarter, courtesy of S&P by way of Yardeni Research. One of the classic tropes of lazy financial journalists goes like this: XYZ Co spent half of their free cash flow on buybacks this year, but the stock dropped! They lost their shareholders billions of dollars! What
One upon a time, in the early 2000s, a small company had a little HR issue: one of their employees was a bit of a weirdo. He was, more to the point, really weirding out one of his coworkers, and she said she felt uncomfortable coming in to work. HR
A common theme I’ve mentioned — in pieces on mortgages, industry demographics, energy, and bubbles generally — is the idea that the perception of lower risk creates the reality of higher risk. This theme is hardly original to me; Hyman Minsky wrote about it, and anybody can intuit it from thinking
A few weeks ago, the CEO of a Chinese company got in some legal trouble. They had her dead to rights: a camera had seen her crossing a street against the light, facial recognition software had matched her image to a database, and so she was promptly issued a ticket.
One of the best business parables goes like this: A man walks into a bar, and he tells the bartender “I bet you $10 I can bite my eye.” The bartender says “You’re on.” He pops out his glass eye, puts it in his mouth, and bites down. The
Classical value investors were my first investing subculture, back in the early 2000s. Like all subcultures, they have their sacred texts (The Intelligent Investor, Warren Buffett’s various epistles), their status games (Usually value investors are really impressed by obscure stocks — “My biggest position is a Hungarian haberdashery company trading
The idealized model of the way the media operate is this: a reporter makes a bunch of observations, slowly comes to a conclusion, and then writes up what they learned in order to let the reader draw their own conclusion. The cynic says this is 100% backwards: a reporter starts
There are really only two things that get the financial sector in trouble: excess leverage, and maturity transformation. Excess leverage is easy to understand. If you have $100 of assets, and you borrow $50 against it, you’re safe as long as the value of your assets never declines by
When people talk about the financial services industry and subsidies, they’re usually thinking of implicit subsidies the industry receives — you can cast the bankruptcy code, the tax treatment of interest, and even the existence of central banks as an implicit finance industry subsidy. But it’s a tricky topic: