What does a CDO manager do? How much can CDO managers make? What role did one CDO manager play in The Big Short? A CDO manager is someone who manages collateralized debt obligations. A CDO manager may also repackage original CDOs (themselves repackaged bundles of mortgages) into new towers of bonds. We’ll cover what CDO managers do, how much they can make, and why one CDO manager was ridiculed in the book and movie The Big Short.
How flexible is socioeconomic mobility in America? Is socioeconomic mobility a myth? And when is economic mobility detached from social mobility? Hillbilly Elegy sets out to explore the struggles of the rural white working class in 21st-century America and the barriers to socioeconomic mobility. The book tells a story of dysfunctional families; substance abuse; the material, spiritual, and moral decline of Appalachia; and the struggles to achieve true economic and social mobility in the United States.
What is a Gaussian curve? In which situations can it accurately describe the world? Where does it fail, and what are its limits? The Gaussian curve is another name for the classic bell curve, or normal distribution curve. It’s named after German mathematician Carl Friedrich Gauss, and it describes many phenomena accurately. We’ll look at where the Gaussian curve is accurate and where (and why) it fails.
What was Friedrich Hayek’s economic theory? Why did he spend so much of his career railing against socialism? Economist Friedrich Hayek argued that a dynamical system like the economy was simply too complex for a single entity to master. This was in contrast to the prevailing rational choice theory. We’ll cover the basic elements of Hayek’s libertarian economic theory and explore why uncertainty makes prediction impossible.
What is the barbell strategy? What is a barbell investing approach? How can you adopt the barbell strategy to mitigate risk in investing and in life? The “barbell strategy” is an approach designed to minimize the pain of a negative event while, potentially, reaping the benefits of a positive event. The barbell strategy is commonly used in investing, but it’s also applicable to life more generally. We’ll cover the nature of the barbell strategy and other strategies for mitigating risks.
What is rational choice theory? What is a good rational choice theory example? Rational choice theory is an economic theory that holds that, when faced with an economic decision, individuals will choose the option that gives them the greatest economic benefit. There are many critics of rational choice theory–after all, individuals aren’t always rational. We’ll cover a rational choice theory example and explore the above rational choice theory definition further.
What is a black swan in finance? Is there a way to predict and prepare for black swans in finance? We’ll look at some examples of black swans in the financial world and business and explore how to best prepare for future black swans.
Some say capitalism is failing. Is it? How can we tell? Is there anything we can do about it? Capitalists have reason to champion the system. It’s spurred economic, scientific, and imperial growth the way few other imagined realities have. But what happens in situations when it fails to work? We’ll cover two critiques of capitalism that say that capitalism has failed.
How did the idea of money develop? What does the history of money tell us about our world today? The history of money is one that starts with bartering and ends in the modern financial world. Money has been one of the primary factors in the creation of a global society. We’ll cover the origin of money and how the concept evolved over centuries.
What are the problems with capitalism? Are there ways around these problems? The problems with capitalism include inequality, exploitation, and aggressive greed. These problems don’t make capitalism inherently evil, but they are hard to rectify. We’ll look at the three biggest problems with capitalism.