Negative Convexity (Page 6)

Negative Convexity

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So are electric vehicles a good buy or what?

TL;DR – electric vehicles are already cheaper than comparable gas cars when viewed from a Total Cost of Ownership (TCO) perspective. If you are in the market for a new car and have been reluctant to consider an EV because of the price, do the math (or read this post)

How much should home prices fall based on recent changes in interest rates?

I wanted to do a bit of math to see how much home prices need to fall in order to meet affordability criteria in a higher interest rate regime. Partly it’s for personal interest, as I bought a house during the pandemic and I’m curious how much I’

The zombification of Corporate America

Over the past three weeks, there’s been a lot of discussion of duration-related mark-to-market losses, depositor flight, money market strains, and government interventions pertaining to the banking sector. What I haven’t seen a lot of discussion on is the traditional cause of banking crises: people or firms who

Two weeks of bank failures and government interventions: the big picture

In the past two weeks, we’ve seen the closure or rescue of four banks: Silicon Valley Bank, Signature Bank, First Republic Bank, and Credit Suisse. We’ve also seen large-scale interventions from central banks, in the form of the Fed’s new Bank Term Funding Program (BTFP) and the

Some thoughts on the failure of Silicon Valley Bank

The tech and finance worlds have been consumed for the last four days by the collapse and closure of Silicon Valley Bank (SVB), a bank serving… Silicon Valley. I’ve been following the developments closely and wanted to organize some my thoughts into a short commentary piece. What is/was

ERCOT market design options—a summary of E3's November 2022 report

This note summarizes the “Assessment of Market Reform Options to Enhance Reliability of the ERCOT System,” a report commissioned by the PUCT from energy consulting firm E3 and released on November 10, 2022. The PUCT is currently seeking comments from the public on this report. Key Takeaways · All six of

Allocating assets between taxable and non-taxable accounts

People have been asking me lately about whether there is any advantage to putting certain types of investments in taxable versus non-taxable accounts. Short answer: yes, there is. Here is a short post on how to think about sorting investments between types of accounts. We'll first discuss the