This sentence by Dostoyevsky never fails to hit hard:
“You sensed that you should be following a different path, a more ambitious one, you felt that you were destined for other things but you had no idea how to achieve them and in your misery you began to hate everything around you.”
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ChatGPT has quietly built a file on you. You've never seen most of what's in it. Every message you send feeds it. It studies your patterns to map your personality and habits things you never actually told it.
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A man spends 50 years teaching at MIT.
He knows his time is running out.
So he records one last lecture — everything he knows, distilled into a single hour.
He died 5 months later.
This is that lecture.
The most important hour you'll watch this week.
Bookmark it for later!
Cc : Respective Author
A Yale professor recorded 26 hours of undergraduate financial theory in 2009 that quietly runs every mortgage desk, credit hedge fund, bank stress test, and repo market on earth.
Yale charges $86,000 a year to sit in that classroom.
He posted the entire course to YouTube for nothing.
Millions have opened lecture one. Almost no retail trader has finished all twenty-six.
His name is John Geanakoplos. He is the James Tobin Professor of Economics at Yale and co-founder of Ellington Capital Management, one of the largest mortgage hedge funds on Wall Street.
He called the 2008 crash in a public lecture eight years early.
The 75-minute clip in this video is one lecture from ECON 251 Financial Theory, filmed in the fall of 2009 at the MacMillan Center at Yale.
The diagram on the board behind him looks trivial. It is the exact math that decides whether a bank stays solvent, whether a housing market corrects gently, and whether a mortgage fund survives a bad quarter.
Geanakoplos covers the entire mathematical foundation of collateral, leverage, and financial crises in one semester.
The Leverage Cycle. His original equation. Asset prices rise faster than fundamentals in booms and collapse harder in busts. Ellington priced every mortgage bond through 2008 with it.
Collateral equilibrium. The price of an asset depends on who is allowed to borrow against it and how much. Not on discounted cash flow. Every housing bubble in history is a story about collateral.
CDS and tranching. The math that turned $200 billion of subprime mortgages into $1.2 trillion of AAA bonds. Geanakoplos drew the diagram at Yale in 2005 and told his students the pool would default. Merrill, Citi, UBS, and Bear Stearns held it until it did.
The natural buyers theory of price. A small number of optimists sets the price of every risky asset on earth. Remove their leverage and the market crashes faster than any change in fundamentals.
By December 2007 Merrill had written down $9 billion, Citi $10 billion, UBS $13.7 billion. Total announced bank losses hit $52 billion. Geanakoplos had drawn the exact math for that outcome on the board two years earlier.
Every mortgage desk on Wall Street pays entry-level analysts $250,000 to know this material before they walk in.
Every senior MBS trader is paid $500,000 to remember it under pressure.
Every central banker learns half of it and pretends the other half does not exist.
"The most important variable in any market is not the interest rate. It is the collateral rate."
That is a sentence Geanakoplos has repeated in every public lecture for twenty-five years. Bernanke ignored it in 2007. Every retail trader ignores it today.
The lectures are free on Yale Open Courses. The Leverage Cycle paper is under thirty pages. The textbook chapters are free.
The math is free. The willingness to sit through 26 hours of financial theory before opening a leveraged position, buying a mortgage ETF, or holding a bank stock through the next credit tightening is a much rarer commodity than the confidence to walk in without it.
A client ghosted me for 3 straight weeks.
I sent him three "Any updates?" emails. Crickets.
Then, I changed my approach. I sent a 1-sentence email using a specific psychological trigger.
He replied in 4 minutes.👇
Søren Kierkegaard on the Importance of Walking
“Above all, do not lose your desire to walk. Everyday, I walk myself into a state of well-being & walk away from every illness. I have walked myself into my best thoughts, and I know of no thought so burdensome that one cannot walk away from it. But by sitting still, & the more one sits still, the closer one comes to feeling ill. Thus if one just keeps on walking, everything will be all right.”
As an old man, looking back on one's life, it's one of the things that strikes you most forcibly-that the only thing that's taught one anything is suffering. Not success, not happiness, not anything like that. The only thing that really teaches one what life's about is suffering, affliction.
Malcolm Muggeridge