"Yet another hedge fund manager explained Icelandic banking to me this way: you have a dog, and I have a cat. We agree that each is worth a billion dollars. You sell me the dog for a billion, and I sell you the cat for a billion. Now we are no longer pet owners but Icelandic banks, with a billion dollars in new assets."
"You have a dog, and I have a cat. We agree that they are each worth a billion dollars. You sell me the dog for a billion, and I sell you the cat for a billion. Now we are no longer pet owners, but Icelandic banks, with a billion dollars in new assets."
What a wonderfully simple explanation of mark-to-market!
> "Brooke Allen has worked for 30 years in the securities industry as a proprietary trader and hedge fund manager."
Let me translate:
"Brooke Allen has worked for thirty years in a industry dedicated to fleecing the stupid rich. Hedge funds uniformly deliver lower-than-average returns with high volatility, but high payouts to the staff involved sucking from other people's money. Mr. Allen believes that working in an extremely-well-paid industry where he managed to get extremely-well-paid makes him a good salary negotiator."
Did anyone know what actually GS do anyway? Yes, they are an investment bank, they are dealing with money, they are going after ever bigger margin for profit. But how they get there is anyone's guess, and doubt there are that many people in the whole world understand what exactly GS did to get those money.
Average joes might not know what GS is, as with most of us here on HN, but they surely feel pain that the investment bankings brought to them. In that sense, 'vampire squid' is actually quite useful metaphor: It is mystical, it is malicious.
> By seeking out overvalued assets, short-sellers help rein in animal spirits and prevent bubbles from forming.
Suddenly this article takes an unexpectedly spiritual turn. What are these "animal spirits" and how do they influence markets? It's reminiscent of the Animal Spirit Guide that helped Chakotay in Star Trek Voyager[0]
> That kind of money (and I'm approximating here) is for a dog with all the documents and one that can be used for breeding (not neutered/spayed). So in a way it's an investment.
> Andrew Lahde (born 1971) was a California-based hedge fund manager
> who in 2007 earned some fame for achieving return rates in the vicinity
> of 1000% with his Lahde Capital, based in Santa Monica,
> California. The fund speculated on increases of U.S. subprime
> mortgage defaults.
"As your bank or hedge fund slides toward insolvency, just carry on barking at your secretary, snubbing waitresses, and blanking old friends who nod at you in the elevator. Everyone will assume you are still loaded -- and will hold off pulling the plug on you for a few more days at least."
I was starting to critically pull apart the article too, but when I read the quoted paragraph I started to laugh and realised my leg was being pulled.
That's one of my favorite expressions - I think I first heard it in the Bogleheads subreddit. The redditor in question was trying to help a first time investor with a traditional three part portfolio (domestic, international, bond).
I think you guys are being a bit too literal. This is how people talk in colloquially, and it's a common phrase in the hedge fund world where I was working at the time.
> "The goal is to have the hedge fund with the highest return in the world, with capital of around 100 billion yuan," he said.
I hope this is a translation issue, because otherwise it would seem that the subject doesn't even know the difference between a prop trader and hedge fund.
A new asset class (like Gold) which everyone wants to invest in because they think everyone else values it (just like Gold). And with a few benefits over Gold like it can be transferred easily.
That this has sustained for 12 years is amazing and the longer it stays, the longer it will further stay.
"Yet another hedge fund manager explained Icelandic banking to me this way: you have a dog, and I have a cat. We agree that each is worth a billion dollars. You sell me the dog for a billion, and I sell you the cat for a billion. Now we are no longer pet owners but Icelandic banks, with a billion dollars in new assets."
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