From the Opalesque team: Opalesque has learned that Eidsis Capital is preparing to launch a Hybrid distressed fund which will be named Eidsesis Special. Get information, directions, products, services, phone numbers, and reviews on Eidesis Capital in New York, NY. Discover more Security Brokers, Dealers, and. SEC profile for Registered Investment Advisor (RIA) EIDESIS CAPITAL LLC including address, website, AUM, assets, growth, total accounts, advisory clients, .
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Gold is not an investment. It creates perverse incentives because it breaks the price mechanism, which is the most important signal in a free-market economy. Too big to fail is now too bigger to fail. Close Going for Gold in a Dangerous World Simon Mikhailovich knows a thing or two about financial weapons of mass destruction. It was a very specific bet on a very specific set of outcomes that is not panning out.
Developed markets that are the repositories of most of global financial wealth have had de minimis demand for physical gold. If anybody is an expert in safe-haven assets, it is the Swiss National Bank.
But there may come a moment when it doesn’t work, and then what’s a safe haven? Gold is a store of value. They thought they were simply in custody of Lehman Brothers. Interconnectedness in markets—now higher than it has ever been—has been created by disruptive new technologies, which aren’t very well understood. People overestimate their previous experience and they underestimate future experience…. Although there’s faith in the U.
By various fiduciary and criminal standards, we should have seen a tremendous number of prosecutions and successful lawsuits. These are irreconcilable issues, and the only way they can be reconciled is by printing more money for the moment.
The other is over-the-counter credit derivatives, which are basically grossly under-reserved insurance. They destroy money, not lives. For the best Barrons.
That raises another problem with financial technology—re-hypothecation—where banks make money by lending out collateral. The level of interconnectedness, the level of misapplied incentives is again unprecedented in history.
There are two roles of uncorrelated sources of returns, or reserves, in a central banking sense. They even thought they owned U. One technology is securitization, such as CDOs, where high-risk debt is recharacterized into investment-grade securities.
Lehman clients couldn’t get full value for assets they didn’t think were at risk. MF Global’s clients thought they owned commodities.
Going for Gold in a Dangerous World
A cardinal rule of risk management is, don’t put all your eggs in one basket. Armageddon is a physical end of the world, financial disruption is financial disruption. Many countries have gone through financial disruptions and had their currencies devalued and had all sorts of economic problems, even in the last 20 years.
To order presentation-ready copies for distribution to your colleagues, clients or customers visit http: But eidesiz are not liquid during times of disruption. But once it goes, it can go very quickly. Every asset and every dollar that is in custody in a bank, unless specific legal arrangements are made, is re-lent, and as we saw with MF Global and with Lehman, ultimately it is the customer or the investor who bears the counterparty risk.
The idea is to position oneself to survive financially and potentially enhance one’s position. Central banks all have gold reserves, and they’ve been increasing them. Greece has overproduced credit….
It’s normalcy bias, a psychological phenomenon that prevents people from seeing unconventional threats. So you will never have the Philadelphia problem. If we step back from everything that is going on in the U. However, in the current environment, gold can produce tremendous real returns because it’s an asset that doesn’t produce any cash flow. We came up with a vehicle that enables investors to do the same thing.
That creates distortions, misallocation of capital, and mismanagement of risk, and we are seeing it time and time again. Many things have to go eideesis in the short term to delay the eventual resolution, if you will. We concluded such an asset is physical gold bullion—not paper or derivative instruments—held securely outside the financial system, which is potentially subject to a disruption like we saw inand geographically diversified to provide access to various markets, where the hope is that at least one or some of them would be liquid.
It is very difficult to own commodities physically, and therefore you are subject to market disruptions and counterparty risk. Treasuries, and they ended up being paid 70 cents on the dollar for their Treasury holdings.
Debt eiesis the risks by increasing the interconnectedness of financial institutions and governments.
Eidesis Capital LLC [ – ] 5th Ave New York, NY Business Services NEC – MapQuest
It is muscle memory. With a wealth of experience in eiedsis credit, he co-founded Eidesis Capital in with Michael Sollott, after they completed a buyout of the collateralized-debt-obligation business of St. The effectiveness wears off over time, you need to take more and more to achieve less and less, and eventually they stop working.
They increased productivity and they created oversupply, and that excess supply needs to be liquidated.