What is Big Think?  

We are Big Idea Hunters…

We live in a time of information abundance, which far too many of us see as information overload. With the sum total of human knowledge, past and present, at our fingertips, we’re faced with a crisis of attention: which ideas should we engage with, and why? Big Think is an evolving roadmap to the best thinking on the planet — the ideas that can help you think flexibly and act decisively in a multivariate world.

A word about Big Ideas and Themes — The architecture of Big Think

Big ideas are lenses for envisioning the future. Every article and video on bigthink.com and on our learning platforms is based on an emerging “big idea” that is significant, widely relevant, and actionable. We’re sifting the noise for the questions and insights that have the power to change all of our lives, for decades to come. For example, reverse-engineering is a big idea in that the concept is increasingly useful across multiple disciplines, from education to nanotechnology.

Themes are the seven broad umbrellas under which we organize the hundreds of big ideas that populate Big Think. They include New World Order, Earth and Beyond, 21st Century Living, Going Mental, Extreme Biology, Power and Influence, and Inventing the Future.

Big Think Features:

12,000+ Expert Videos

1

Browse videos featuring experts across a wide range of disciplines, from personal health to business leadership to neuroscience.

Watch videos

World Renowned Bloggers

2

Big Think’s contributors offer expert analysis of the big ideas behind the news.

Go to blogs

Big Think Edge

3

Big Think’s Edge learning platform for career mentorship and professional development provides engaging and actionable courses delivered by the people who are shaping our future.

Find out more
Close
With rendition switcher

Transcript

Question: Are hedge funds good for the American economy?

Thomas Cooley:  Well, I don't think that-- I don’t see hedge funds as being particularly detrimental, you know, they're just-- hedge funds is a very broad category that represents different investment strategies.  Now, one of the things that is true is that hedge funds rely on complicated securities, trading complicated derivative securities, which people don't understand very well.  And they rely on high degrees of leverage.  So if they have, you know, a billion dollars in their hedge fund, they might borrow as much as $30 billion to trade with.  And so, their strategies are backed by high amounts of leverage.  And that creates some problems.  But what we've learned is that the investment banks were very highly leverages as well, some by 35 or 36 to 1.  And that means that if you're leveraged that heavily when the market's head down, you can be brought to your knees very quickly.  It's like having only three percent equity in your home.  So if home prices fall by three percent, you might as well walk away.  So that was the status of Bear Stearns, that's what brought Bear Stearns down. 

Recorded: 3/21/08

 

 

Thomas Cooley Defends Hedge...

Newsletter: Share: