The World's Best Book Summaries
What’s arbitrage? How did John Meriwether’s arbitrage strategy earn Salomon Brothers a profit? Arbitrage is where investors exploit small differences in price for similar assets in two or more markets. When John Meriwether learned this technique, he used it to his advantage, earning more money than ever. Continue reading to learn more about how arbitrage works in the stock market.
Are non-traditional families inherently poorer than traditional families? Is marriage just for the privileged? Poverty remains a persistent feature of American life despite the economy being large enough to raise every adult and child above the defined poverty level. The stubborn persistence of poverty has given rise to several false explanations for its staying power, including non-traditional family structures. Let’s explore the perceived connection between family structure and poverty and Matthew Desmond’s rebuttal.
What is the Efficient Market Hypothesis? How did John Meriwether use this hypothesis to perfect computer trading? The Efficient Market Hypothesis is a financial theory that states stock prices reflect all existing information. In the early 1980s, Meriwether used this theory to introduce computer-based mathematical modeling into trading. Discover how the Efficient Market Hypothesis played into Meriwether’s strategy.
Are poor people lazy? What did the Covid-19 experience teach us about poverty and work ethic? When politicians try to figure out why people become poor and stay poor, they often point to a lack of work ethic. Social scientist Matthew Desmond pushes back on this idea, pointing to data gathered during and after the Covid-19 pandemic. Continue reading to learn what Desmond discovered.
How would a global minimum tax on billionaires’ wealth work? What are the main arguments for and against the tax? Does the proposal have a shot at becoming a reality? A proposal for a 2% minimum tax on billionaires’ wealth aims to raise revenue and address inequality, but faces skepticism. Proponents say the billionaire tax could generate $250 billion annually while critics argue that implementing the tax will require global coordination that will be tough to achieve quickly. Continue reading to learn about the different opinions regarding a billionaire tax.
How was the hedge fund LTCM formed? Why was the hedge fund created in the first place? Shortly after John Meriwether left Salomon Brothers, he sought to create a new fund. In When Genius Failed, Roger Lowenstein delves into the emergence of LTCM, its unique convergence strategy, and the high-risk, high-reward nature of its approach. Continue reading to learn about the early years of LTCM.
Why is there poverty in the US? Do immigrants have less social mobility? Is family structure a factor? The US is a prosperous nation. But, poverty has a hold on a significant portion of the population. The stubborn persistence of poverty has given rise to several false explanations for its staying power, including immigration, non-traditional family structures, and a bad work ethic among the poor. Read more to see how social scientist Matthew Desmond tackles these three myths about poverty in the US.
What was the 1997 Asian economic crisis? How did the crisis affect LTCM? Several Asian countries experienced a currency collapse in 1997. The crisis eventually found its way to the US, affecting several hedge funds, including LTCM. Here’s how the 1997 Asian economic crisis led to the collapse of LTCM.
What is YIMBY? What’s the frustration behind it, and what’s its goal? YIMBY (“Yes in My Back Yard”) is a social and political movement focused on affordable housing. A response to NIMBY (“Not in My Back Yard”), they demand reforms in policies and regulations that govern housing in large cities. Keep reading to learn about the YIMBY movement and its demands.
What was the 1998 Russian financial crisis? How was LTCM affected by the crisis? The collapse of the Russian ruble in August and September 1998 exacerbated the impending liquidity crisis in global financial markets, intensifying the fund’s difficulties. Russia defaulted on its financial obligations, sending shockwaves throughout global financial markets. Find out how the 1998 Russian financial crisis contributed to LTCM’s downfall.