What happened? The moves in both secured and unsecured rates on September 16 and 17 were much larger than any of those observed over the past few years. Figure 1 shows the effective federal funds rate (EFFR) and the secured overnight financing rate (SOFR), a broad measure of the cost of borrowing cash overnight collateralized by Treasury securities, since December 2015. The EFFR has been quite stable and only printed outside the FOMC's target range on one day before September 17. While SOFR has been more volatile compared to the EFFR and exhibited some quarter-end seasonality, it rarely moves more than 20 basis points on a day.
In the FICC-cleared bilateral segment of the market, many of the larger dealers that participate are also important players in the triparty repo market. They typically borrow cash in the triparty market and lend to clients in the FICC-cleared bilateral market at a higher rate (what is referred to as "matched book activity"). The FICC-cleared bilateral segment also reportedly exhibited quite stable borrowing and lending on September 16 and 17 (not shown). Lenders did not appear to step into the market to take advantage of higher rates, perhaps given the uncertainty about their outflows and general liquidity conditions in the market.
What Happened
Altogether, we document the inelastic demand of borrowers in the triparty repo market, as well as the stability of trading relationships with their lenders. Borrowers generally trade with the same group of lenders at similar volumes every day and even market volatility as substantial as what we saw in mid-September does not seem to change that.
On December 19th, 1777, 12,000 soldiers and 400 women and children marched into Valley Forge and began to build what essentially became the fourth largest city in the colonies at the time, with 1,500 log huts and two miles of fortifications. Lasting six months, from December until June, the encampment was as diverse as any city, and was made up of free and enslaved African American soldiers and civillians, Indigenous people, wealthy officers, impoverished enlisted men, European immigrants, speakers of several languages, and adherents of multiple religions.
Indigenous Peoples occupied the area in and around what is now known as Valley Forge National Historical Park as early as 10,000-8,000 BP (before present), enjoying the abundance of food and shelter offered by the river valley environment. The last native people to inhabit the area were the Lenape, also known as the Delaware. Europeans began to settle the region in the late 17th century and pushed out the natives. By the time of the encampment in 1777, most of the land in the vicinity had been cleared for agriculture.
Within what is now the park, 18 landowners established fairly prosperous farms on the choice agricultural soils. Along Valley Creek, an iron works named Valley Forge was established, and a small industrial village including charcoal houses, a saw mill, grist mill, and company store grew up around it. The slopes of Mounts Joy and Misery were wooded and were frequently cut over to supply wood for making charcoal to fuel the iron forge.
To fully appreciate the significance of what occurred at Valley Forge, the event must be placed in the context of the entire American Revolution. Few Americans appreciate the scope of the war. Many do not realize that the war lasted for eight-and-a-half years, was international in scale, or that the American army campaigned in areas as far north as Canada, as far south as Georgia, and even west of the Allegheny Mountains.
From the 1960s through the 1990s, venture capital was an excellent way to pursue these twin interests. From 1999 through the present, the industry has posted negative mean and median returns, with only a handful of funds having done very well. What happened?
We have no idea what these companies might look like, only that they probably will share these characteristics. Entrepreneurs often know better than we do what might be enormously valuable in the future.
Another, paradoxical reason, is that companies pursuing transformational ideas are somewhat likelier to succeed in them than less ambitious companies. A company with a readily obtainable goal (checkers, for the iPhone!) lacks a technological barrier to entry because, of course, the original problem was easy. And their end markets are typically quite limited, meaning that they may not achieve the scale necessary for exit. But most importantly, we believe the brightest and most creative problem solvers seek the hardest and most interesting problems, and gathering the best technical talent is obviously a major competitive advantage.
But at the same time, the entrepreneurs who are still out there swinging are getting a lot done and creating a lot of value. And remember: not all crypto products are purely financial. For example, many are more consumer-facing products like systems for coordinating group decisions or managing event tickets. The long-run view is that there is real fundamental technological value here, and so what really matters for the market is whether we can realize that value through entrepreneurship and supporting regulation. And I think the current environment is one in which we have a lot of potential to do that.
What happens after everything falls apart? The end of the Bronze Age was a moment when an entire network of ancient civilizations collapsed, leaving behind only clues to what happened. Today, scholars have pieced together a story where everything from climate change to mass migration to natural disasters played a role. What the end of the Bronze Age can teach us about avoiding catastrophe and what comes after collapse.
Vibes or moods have too often influenced media narratives in recent elections, from what was thought to be a surefire win for Clinton, despite tight polling, and a landslide for Biden despite the margin of error inherent in his lead.
Ensuring that tragedies like what happened to Browder do not happen again requires a transformative change that addresses the reason Browder ended up in jail in the first place. New York desperately needs to overhaul its bail, discovery, and speedy trial practices.
Algerian President Abdelmadjid Tebboune chaired the summit meetings, as host. Before the summit, Tebboune negotiated a unity meeting between Mahmoud Abbas (also known as Abu Mazen) of the Palestinian Authority and the leadership of Hamas. It is not clear what this will mean in practice.
To get those resources and grow its empire Japan had a choice to make between what became known as the northern and southern strategies. The northern strategy was backed by the Imperial Japanese Army and involved taking the oil, coal and iron-rich areas in China, Mongolia and Siberia. The southern strategy on the other hand was backed by the Imperial Japanese Navy and instead involved striking south into British Malaya and the Dutch East Indies, similarly rich in oil and rubber. By the mid-1930s the northern plan was already in full swing with attacks in Manchuria and China and this had led to border disputes with the Soviets. These culminated in the huge Battle of Khalkhin Gol which the Soviet-Mongolian forces won a major victory. Suddenly Japan had to reconsider its plans.
So Japan's attack on Pearl Harbor pretty much has the opposite effect of what it was hoping for, you remember they were hoping for this negotiated peace. So the day after the attack, President Roosevelt delivers his famous 'day of infamy' speech to congress in which he asked for a formal declaration of war against japan which congress quickly authorizes. So the U.S is officially now in the war.
So support for isolationism quickly melts away, there's a rapid expansion of the U.S military with hundreds of thousands of men volunteering to join and the economy is fully mobilized onto a war footing. Japan's hopes for a short war completely evaporate and they've now awoken this what many people call 'sleeping giant' and they're now committed to this long war in the Pacific and Southeast Asia which ultimately they'll lose.
We use rigorous definitions and concepts to clarify what is happening around the world, and our approaches work best when the information about an event is sufficiently comprehensive and detailed. Although a full accounting of what happened on January 6 still remains to be assembled, the Cline Center team is working as rapidly as possible to apply our definitions in order to categorize the storming of the US Capitol. In the meantime, we can offer some tentative conclusions and point to some questions that we have not yet answered with sufficient clarity. 2ff7e9595c
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