Cryptocurrencies were heralded as solutions to problems with old financial systems, but do they introduce new ones? Or do they simply face the same hurdles that finance has faced, and surmounted, over hundreds of years of history? And if so, how stable is a “stablecoin”?
There is productive debt and unproductive debt. What’s the difference? One makes a company a great investment, the other is a huge risk factor–but they often look exactly the same. Understanding how to delineate good and bad debt isn’t easy–you might need to use a PIKaxe to figure it out.
There is an infamous way to borrow cheaply on Wall Street: it’s called the Japanese yen carry trade. It’s also the main reason why markets sold off so quickly on Monday–although we aren’t yet sure if it was fear of the yen carry trade that did it, or the trade itself.
Finance is not just a game of math and numbers–in fact, those who succeed in the industry tend to have two other skills that are much more important.
They say demographics is destiny, and they aren’t wrong. But that doesn’t mean we can just buy and sell stocks according to the flows of demographic change–the world is much more complicated! To incorporate demographics in a financial analysis, we need to think beyond buying and selling. We need to get multidimensional.
We continue digging into margin by looking at how short margin accounts different from long accounts and why shorting stock presents very different kinds of risks to accounts. Want to know why some hedge funds blow up and others don’t? Start here.