Complex Systems with Patrick McKenzie (patio11)
Writing the first draft of financial history with Byrne Hobart
Jul 18, 2024
Byrne Hobart joins Patrick McKenzie to discuss the toxicity of 30-year mortgages, finance newsletter dynamics, applying rationalist epistemics to hedge funds, and the joy of learning about an industry from scratch. They explore tax inefficiency in investments, competitive advantages in finance writing, evolution of web scraping, and monetization strategies of online travel agencies.
52:05
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Quick takeaways
- 30-year mortgages create financial volatility due to long-term commitments.
- American housing market microstructure affects asset pricing and benchmark costs.
Deep dives
30-Year Fixed-Rate Mortgage: Unnatural Requirement for Banks
It is discussed how banks lending money for 30-year mortgages is unnatural due to the long-term commitment. While homeowners benefit from the asset appreciation, the complexity of long-term loans leads to volatility in interest rates. This volatility affects the benchmark cost of money in financial markets.
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