Writing the first draft of financial history with Byrne Hobart

Complex Systems with Patrick McKenzie (patio11)

Patrick McKenzie (patio11) is joined by Byrne Hobart to discuss Byrne’s vantage point as writer of The Diff, a tech and finance newsletter. Byrne explains the toxicity of the 30-year mortgage, the dynamics of the finance newsletter ecosystem, how rationalist epistemics can be applied to hedge funds, and the joy of learning about an industry from scratch.

Full transcript available here.

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Sponsor: This podcast is sponsored by Check, the leading payroll infrastructure provider and pioneer of embedded payroll. Check makes it easy for any SaaS platform to build a payroll business, and already powers 60+ popular platforms. Head to checkhq.com/complex and tell them patio11 sent you.

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Links:

• The Diff https://www.thediff.co/

• Capital Gains https://capitalgains.thediff.co/

• Pre-order Byrne Hobart’s book Boom: Bubbles and the End of Stagnation https://www.amazon.com/Boom-Bubbles-Stagnation-Byrne-Hobart/dp/1953953476

• Bits About Money https://www.bitsaboutmoney.com/

• Byrne's podcast The Riff: https://podcasts.apple.com/id1716646486

Referenced:

• The Railway Mania of 1860 Paper by Andrew Odlyzko https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4006745

• Seeing Like a State by James C. Scott https://www.amazon.com/Seeing-Like-State-Certain-Condition/dp/0300078153

• The Dead Pledge by Judge Earl Glock https://www.amazon.com/Dead-Pledge-Mortgage-1913-1939-Capitalism/dp/0231192533

• The Oral History of Travel’s Greatest Acquisition Bookings.com https://skift.com/oral-history-of-booking-acquisition/

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Twitter:

@patio11

@byrnehobart

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Timestamps:

(00:00) Intro

(00:25) The 30-year mortgage is an intrinsically toxic product

(04:46) Young households are the socially optimal holders of equities risk

(10:19) The structure of private equity returns

(14:18) Sponsor: Check

(15:32) Meta-analysis of the finance newsletter space

(19:54) Byrne’s aspirations for The Diff

(25:01) The origins of names

(27:19) The epistemics of a hedge fund

(34:26) Venture capital vs hedge funds

(38:13) Understanding scrapers

(41:20) How to learn about an industry from scratch

(45:37) The business of online travel agencies

(49:21) Wrap

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Complex Systems is part of the Turpentine podcast network.