i am famously a writer about finance, and also the nba

In 1983, the bond-trading firm Pimco figured out a way to print money. The whole thing was extremely complicated in its details but dumb-stupid in principle, so I’m going to stick to the big picture. 

Basically, Pimco discovered that if it spent a shitload of money, it could do a thing that allowed it to buy high-value bonds for the price of similar-looking but decidedly lower-value bonds. And these bonds were especially fantastic because they came with a built-in hedge against unfavorable market conditions. They were able to do it exactly once, and it involved armed guards and rival traders waving white handkerchiefs in defeat and also $70 million in profits. 

The trade was ice-cold, absolutely did not improve society in any way, and more than probably ruined a bunch of people’s lives. But also, it was the equivalent of picking up $50,000 that happened to be on a table in an empty bar charging a $30,000 cover. So why not give it a shot, they figured.

This is the fourth time I’ve attempted to type this information. The first time was way too long and jargon-y, the second iteration spent way too much time explaining unnecessary details about mortgage-backed securities, and the third time was relatively short but too vague to be even remotely helpful. 

Finance is confusing, and I’ve been making a concerted effort to learn more about it, is what I’m saying. I get the sense that I’m not the only person in this boat. The vast majority of last year’s biggest news stories were economics-related: The rolling collapse of the crypto industry’s biggest players, inflation and the recession, shortages in baby formula and microchips and cars, Europe’s energy crisis, rising gas prices, and that’s not to mention the war in Ukraine, whose onset triggered plenty of this stuff. Hell, we can even count “The British Royals being in the news” as a finance story because the UK has to print a bunch of new money with Charles’s face on it now. That story I told at the top is from Mary Childs’s excellent book The Bond King, a long-lens look at Pimco and its co-founder Bill Gross. (Now that I’ve read like three books on finance I’m officially a Brain Geneous about it.)

The mechanisms through which people cleverly maneuver within the financial system to make money can be genuinely novel and impressive in a