Self-Motivation
David Goggins
Former Navy Seal
Career Development
Bryan Cranston
Actor
Critical Thinking
Liv Boeree
International Poker Champion
Emotional Intelligence
Amaryllis Fox
Former CIA Clandestine Operative
Management
Chris Hadfield
Retired Canadian Astronaut & Author
Learn
from the world's big
thinkers
Start Learning

Thomas Cooley Defends Hedge Funds

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

 

NYU economist Thomas Cooley explains complicated derivative securities.

Live on Tuesday | Personal finance in the COVID-19 era

Sallie Krawcheck and Bob Kulhan will be talking money, jobs, and how the pandemic will disproportionally affect women's finances.

Why is everyone so selfish? Science explains

The coronavirus pandemic has brought out the perception of selfishness among many.

Credit: Adobe Stock, Olivier Le Moal.
Personal Growth
  • Selfish behavior has been analyzed by philosophers and psychologists for centuries.
  • New research shows people may be wired for altruistic behavior and get more benefits from it.
  • Crisis times tend to increase self-centered acts.
Keep reading Show less

How Hemingway felt about fatherhood

Parenting could be a distraction from what mattered most to him: his writing.

Ernest Hemingway Holding His Son 1927 (Wikimedia Commons)
Culture & Religion

Ernest Hemingway was affectionately called “Papa," but what kind of dad was he?

Keep reading Show less

How DNA revealed the woolly mammoth's fate – and what it teaches us today

Scientists uncovered the secrets of what drove some of the world's last remaining woolly mammoths to extinction.

Ethan Miller/Getty Images
Surprising Science

Every summer, children on the Alaskan island of St Paul cool down in Lake Hill, a crater lake in an extinct volcano – unaware of the mysteries that lie beneath.

Keep reading Show less

The biology of aliens: How much do we know?

Hollywood has created an idea of aliens that doesn't match the science.

Videos
  • Ask someone what they think aliens look like and you'll probably get a description heavily informed by films and pop culture. The existence of life beyond our planet has yet to be confirmed, but there are clues as to the biology of extraterrestrials in science.
  • "Don't give them claws," says biologist E.O. Wilson. "Claws are for carnivores and you've got to be an omnivore to be an E.T. There just isn't enough energy available in the next trophic level down to maintain big populations and stable populations that can evolve civilization."
  • In this compilation, Wilson, theoretical physicist Michio Kaku, Bill Nye, and evolutionary biologist Jonathan B. Losos explain why aliens don't look like us and why Hollywood depictions are mostly inaccurate.
Keep reading Show less
Quantcast