Semi-Charmed Life

The Great Transition: The Rise of Capital Market-Based Finance

Securities Finance: Securities Lending and Repurchase Agreements (Frank J. Fabozzi Series)

This is what I'm currently reading. I normally would not read something like this because this is the type of stuff I would typically consider dry and dull. However, recently I've been motivated to learn more about the type of work I'm in, securities lending. Being in the operations side of things, I didn't really get the "big picture" of how stock loan works and wanted to gain a more holistic view of the way things work.

I'm still in the very beginning of the book. Really heavy stuff that takes a long time for it to sink in, but I actually find a lot of it fascinating. One particular section really struck me, of which the title of this post is named after. I wish in college, at the very beginning of your finance/economics career, they explained why the things you were going to learn and the work you were going to do would be important in the greater scheme of things. And in such eloquent terms.

Here's an excerpt:

A growing number of economists and policymakers, backed up by day-to-day experience, now share a consensus view: robust capital markets, which offer a full array of modern financial products and practices, contribute to long-term national economic growth by encouraging entrepreneurship and innovation, even given periodic market corrections.

Capital markets can finance economic growth more efficiently than traditional bank-lending systems that depend on making a "spread" of interest rate revenue over the banks' costs of funds. Capital markets can more easily diversify and distribute risk by dividing shares in the equity ownership or portions of the debt involved in financing enterprises into stocks and bonds, which in turn can be more widely dispersed among investors than traditional loans.

The availability of active markets for shares in new enterprises then enables venture capitalists to make a range of investments in a variety of high-risk ventures--in the hope that one or more spectacularly successful IPOs will more than make up for other ventures' failures and losses. Traditional commercial banks, by contrast, cannot risk lending to an array of unproven startups--however promising--because banks cannot earn enough additional interest on those new firms that succeed to make up for capital they are likely to lose when other, unproved borrowers fail.

Auto-Pilot

I'm not sure how often this happens to other people, but it pisses me off when I do something so often that my brain shuts down and just goes on auto-pilot.

Exhibit A:

I take a certain highway to Queens and get off of a specific exit to hop on to another highway all the time. The vast majority of the time, this is the road I take. However, on the few occasions where I'm headed in the same direction but different location and need to take the first highway a few exits past the exit I normally hop on to, I've always managed to completely forget and end up taking the path I normally take to Queens.

It's come to the point where I have to tell myself "you are NOT going to take this exit, you must go past it" and I STILL do it. It's crazy. It's like my mind goes blank when I reach that certain area and my body just takes over.

Exhibit B:

The reason for this post . . .

Every time I go to the kitchen to prepare a protein shake before I head to bed, I wind up brushing my teeth. Maybe it's because the bathroom is right there . . . maybe it's because it's that time of the night and my body knows it has to sleep . . . maybe I'm just a retard. Whatever the reason is, it's annoying as hell because I only remember the protein shake RIGHT at the moment the toothpaste is being worked into my teeth. Then it's just one big DOH!

Damnit why can't the executive function of my brain be more dominant!