What is tail risk and how do you protect against it? ARTICLE TABLE OF CONTENTS (Skip to Section) Tail RiskHow to Manage Tail RiskProtecting Against Stock Market LossesSelf Insurance Against Tail Risk Selling Tail Risk ProtectionReserves to Protect Against UncertaintyTail Risk Podcast Tail Risk Tail events are rare occurrences that are well outside of the norm. Tail risk is the personal harm caused by these tail events. In the worst case, tail risk can ruin us. We could die. Or we … [Read more...]
324: 2020—The Year We Will Never Forget
A review of how the pandemic, financial markets, and government policy evolved in 2020 to make for an unforgettable year. Topics covered include: Show Notes 286: Coronavirus and the Financial Impact of Pandemics 291: How To Survive the Coronavirus (COVID-19) Shutdown Madame Vivelda—Saturday Night Live What Is Risk vs Uncertainty?—Money For the Rest of Us Guide 299: Has the Pandemic Changed You? Personal Saving Rate—Federal Reserve Bank of St. Louis 302: … [Read more...]
310: Why the Stock Market and Economy Are Rebounding So Quickly
How the current global recession differs from the Great Financial Crisis and why the recession is probably over. Topics covered include: Why the current recession has no debt and banking crisisWhy lower-income workers are disproportionally harmed by the current recessionHow the federal government and central bank responses differed between the current recession and the 2008–09 recession.Do increased unemployment benefits disincentivize workersWhy the recession is probably over but it … [Read more...]
294: How Stories Go Viral and Drive Economic Events
How the stories we tell ourselves lead to economic change. What are current pandemic related narratives that are impacting financial markets and the economy. Topics covered include: Examples of mathematical models for epidemics.What are the risks when the global economy is opened again.Under what circumstances do individuals rely on anecdotal evidence rather than statistics.What are some propositions that underly how economic narratives spread.What are some examples of major narratives … [Read more...]
291: How To Survive the Coronavirus (COVID-19) Shutdown
How to avoid ruin and help others avoid ruin as the economy shuts down to slow the spread of the coronavirus. Topics covered include: What is the precautionary principle and how can it help us make important decisions with regards to the coronavirus pandemic.How many people could be infected with COVID-19 in the next 30 to 60 days at the current daily growth rate.Why investment managers are selling assets to reduce their market exposure.Should individual investors be increasing or … [Read more...]
197: The Power of Less and Local
Why having less things and activities gives us more freedom and happiness. Why low probability risks are unacceptable if the consequences affect all of us. In this episode you’ll learn: Show Notes Skin In The Game: Hidden Asymmetries In Daily Life - Nassim Nicholas Taleb Vanishing time in the pursuit of happiness - Aekyoung Kim and Sam J. Maglio Wabi Sabi For Artists, Designers, Poets and Philosophers by Leonard Koren Climate models and precautionary measures - Joseph … [Read more...]
MNY029 Plus: Quantitative Easing
In this week's Money For the Rest of Us Plus episode, I discuss: Quantitative easing as it pertains to repurchase agreement collateral and its impact on interest rates. Will the Federal Reserve sell its holdings of bonds? The Fed's reverse repo program. Nassim Nicholas Taleb's precautionary principle as it applies to QE and GMOs. Karl Popper's concept of the piecemeal engineer. Feedback from listeners on the interlude music experiment. The episode length is 17 minutes. … [Read more...]
