The ideas we keep using
Most research explains an event. These are the mechanisms underneath the events — the small number of ideas that keep turning up across markets, housing, AI, defense and behaviour. Free to read, including where each one breaks.
Bottlenecks
In any system that turns inputs into output, the total is set by the single tightest constraint — not by the sum of everything you put in. Adding more of anything except the scarce thing changes nothing.
MARKETS · ARTIFICIAL INTELLIGENCE · DEFENSE
Capital Cycles
High returns attract capital. Capital builds capacity. Because capacity takes years to arrive, it all arrives together — after the returns that justified it have been competed away. Supply overshoots, returns collapse, capital leaves, and the shortage that starts the next cycle is created by the exit.
MARKETS · INVESTING · ARTIFICIAL INTELLIGENCE
Demographics
The composition of a population — its age structure, household formation and migration — treated as an economic variable. Its distinguishing feature is that it is knowable: everyone who will be forty in twenty years is already alive.
HOUSING · MARKETS · INVESTING
Feedback Delay
When there is a lag between doing something and seeing the result, people fix problems they have already fixed — because the earlier fix is still in transit and therefore invisible. The result is overshoot, reversal and oscillation, produced by reasonable people with no bad intent anywhere.
MARKETS · HOUSING · DEFENSE
Fiscal Dominance
When government debt gets large enough that servicing it — rather than the inflation target — becomes the binding consideration for monetary policy. The central bank keeps its formal independence and loses its practical freedom.
MARKETS · INVESTING
Liquidity
Two things that get confused. Market liquidity is being able to trade size without moving the price. Funding liquidity is whether the dealers and banks in the middle can finance their positions. The first depends on the second.
MARKETS · INVESTING
Lock-In Effects
A past decision keeps governing what you do now, because switching costs more than the benefit — even though you would choose differently if you were starting today. Nobody is trapped by force. Everyone locked in is making a correct decision from where they stand.
HOUSING · DEFENSE · MARKETS
Second-Order Effects
The consequences of the consequences. A change produces a direct effect; that effect changes the prices or constraints facing someone else; and the second effect is frequently larger than the first and almost always less discussed.
MARKETS · HOUSING · ARTIFICIAL INTELLIGENCE