In an earlier post (see here) I put a link to an online book that explains all the main concepts of economics in terms of the classic 'Island Economy'. If you think about it in theoretical terms, this book is a 'proof' that the Island Economy is a sufficiently rich model into which many important … Continue reading Understanding the credit crisis
I'm on a roll with Economics, getting through books and articles at a tremendous rate. But this one is a gem. Written by Irwin Schiff (read about him on Wikipedia do), it's available here as a free-to-download pdf. His sons Peter & Andrew have published their own version of the story which reflects historical events more … Continue reading Economics book with cartoons, online for free!
I mentioned in a previous post that I had come across Nathan Lewis's archive of his articles in NewWorldEconomics.com. Fascinating stuff, but with so much to read, you need a system of attack. Mine is here below. It's a bit rough, lacks a unifying form, but I think it is worth getting out there already. I'll … Continue reading Navigating NewWorldEconomics.com
In an effort to make sense of the current chaos, I am ploughing through a collection of readings on economics, and came across a brilliant article by Irving Fisher. Written in 1933, it lays out his (educated) intuition on the causes and dynamics of debt-deflation cycles. Frankly it is so fresh it could have been … Continue reading Irving Fisher’s debt-deflation theory
This post is a LeanPost: it will be developed further depending on feedback from my readers. See my note here on what a LeanPost is. Many companies are these days talking about reducing the balance sheet. Another term used is de-leveraging. In the simplest terms, this just means that a company is reducing the number of … Continue reading What does ‘reduce the balance sheet’ mean?
I am in the process of writing a post on corporate finance, and have been doing some research into debt levels and leverage. It's part of an effort to understand more about companies, and specifically to answer the question of why quite a few companies have been struggling to get through the crisis. There are … Continue reading The history of a shop
This short post is primarily to give links to three excellent articles on macro economics by Ray Dalio, founder of Bridgewater. The first, a 'template for understanding' how economies work, is better than anything I have ever seen in introductory books on economics. The other two articles take a closer look at the dynamics of debt and … Continue reading The current crisis in historical perspective
I came across an interesting presentation given by one of the senior members of PIMCO UK, a chap called Mike Amey. Click here to see it (a PDF). What I especially like about this presentation is that it covers a lot of the main topics that I hear investors discussing at the moment, ranging from … Continue reading Fixed-income investment strategies in the age of the New Normal
In this post I give a short, but I think rather usefully direct reason for why the yield curve should slope upwards. All it requires is for you to put yourself in the shoes of an investor that has to lock up their money in a bond for a fixed amount of time (and a … Continue reading Why does the yield curve slope upwards?