Blast from the Past: The Long Term Capital Management Bailout of 1998

A random quotation from a recent book by Bruce I. Jacobs, pictured here, comparing the portfolio insurers of the late 1980s to the LTCM crisis of eleven years later.

"But LTCM, like portfolio insurers, fell prey to the illusion of liquidity. Portfolio insurers believed investors would underwrite their insurance policies by buying stocks when portfolio insurers needed to sell stocks. The crash of 1987 disabused them of this notion. LTCM believed that lenders or investors would be available to lend it cash or act as counterparties to its increasingly risky positions. In the end, the Federal Reserve Bank of New York had to coerce LTCM.s counterparties into supplying that liquidity."

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A Story About Coleridge

This is a quote from a memoir by Dorothy Wordsworth, reflecting on a trip she took with two famous poets, her brother, William Wordsworth, and their similarly gifted companion, Samuel Taylor Coleridge. We sat upon a bench, placed for the sake of one of these views, whence we looked down upon the waterfall, and over the open country ... A lady and gentleman, more expeditious tourists than ourselves, came to the spot; they left us at the seat, and we found them again at another station above the Falls. Coleridge, who is always good-natured enough to enter into conversation with anybody whom he meets in his way, began to talk with the gentleman, who observed that it was a majestic waterfall. Coleridge was delighted with the accuracy of the epithet, particularly as he had been settling in his own mind the precise meaning of the words grand, majestic, sublime, etc., and had discussed the subject with William at some length the day before. “Yes, sir,” says Coleridge, “it is a maj...

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Jamesian Philosophy Refreshed

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