Hedge Funds and Long Term Capital Management

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In the late nineties, the bale out of long term capital management. Was that a kind of original sin that just set us on a path of baling more things out at higher and higher price tags? Should we have just let l t c m fall? Now, i think the original sin was continental illinois in 19 86 when the fed bailed out this bank which it thought was too big to fail. That was the original sin, because tax payer money was used to bail it out. And i think if you look at what happened in the two thousand eight crisis, actually hedge funds were not driving the crisis,. The prime brokers who extend leverage two hedge funds learnt the lesson

Venture capital powered the tech revolution, but what powers venture capital? With his in-depth knowledge and coverage of the sector you’d be forgiven for thinking Sebastian Mallaby is a veteran of the Silicon Valley scene. The author of several books on finance and economics, Sebastian takes pride in understanding his subjects intimately (perhaps too intimately, if you ask his critics). His latest book, Power Law: Venture Capital and the Making of the New Future, sheds light on the small but mighty industry.

Sebastian joined Tyler to discuss why venture capital skills aren’t more replicable, the promise of biotech despite increased regulations, why venture capital remains concentrated in the Bay area even after the pandemic, the differences in risk-taking between East and West coast finance, the secret to Mike Moritz’s success as an investor, how Peter Thiel’s understanding of the power law set him apart, why he isn’t interested in becoming a venture capitalist himself, his predictions for the European tech ecosystem over the next ten years, the original sin of “too big to fail,” the major failure of Alan Greenspan during his tenure at the Fed, the Darwinian evolution of good hedge fund strategy, what Ray Dalio got right with Bridgewater, the finance topics he feels are undercovered, what it takes to be a good Substack writer, why he’s bullish on The Information, reasons to be optimistic about the innovative and entrepreneurial trajectories of Japan, the greatest living British historians, the future of the World Bank once China stops borrowing from it, what’s causing the decline in popularity of liberal capitalism, the zany appeal of The Grand Budapest Hotel, and more.

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Recorded January 31st, 2022 Other ways to connect

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