Interest rates have been the backbone of market trends for decades. After nearly 40 years of falling rates , culminating in near-zero levels during the COVID-19 pandemic, we're now seeing a historic reversal. The big question: 🧠 Are we entering a new era of long-term rising interest rates — and what does that mean for investors? 📉 Flashback: The Great Rate Decline (1981–2020) After peaking in 1981 , U.S. interest rates declined for nearly four decades: 1981: 10-Year Treasury yield hit ~15.8%, Fed Funds Rate was over 20%. 2020: 10-Year yield bottomed around 0.5%, with Fed Funds Rate near 0%. This dramatic drop: Fueled tech and growth stocks, Boosted housing markets, Encouraged high leverage across consumers and corporations. But this regime may now be over. 🔁 Reversal: Post-COVID Rate Spike In response to the inflation spike of 2021–2022, the Fed hiked rates at the fastest pace in modern history. From 0% in 2021 to over 5.25% in just 18 months. A r...
In the high-stakes world of Wall Street, few stories are as dramatic—and educational—as the fall of Long-Term Capital Management (LTCM) . When Genius Failed by Roger Lowenstein is not just a finance book—it’s a powerful warning about arrogance, risk, and the illusion of control. Let’s break down what happened, who was involved, and what every investor can learn. 📚 Summary of "When Genius Failed" When Genius Failed chronicles the rise and catastrophic fall of Long-Term Capital Management (LTCM) , a hedge fund that dazzled Wall Street in the 1990s. LTCM was founded by some of the most brilliant financial minds: John Meriwether – Former vice chairman and head of bond trading at Salomon Brothers, known for pioneering arbitrage trading. Myron Scholes – Nobel Prize-winning economist, co-creator of the Black-Scholes option pricing model. Robert C. Merton – Nobel Prize-winning economist, specialized in risk and financial derivatives. Other partners included t...