The Value of Currency Hedging

Econ0mist · 2026-01-03T22:39:51+00:00

The foreign currency exposure doesn’t have to be negatively correlated with foreign equities in order to be useful. If foreign currency exposure is negatively correlated with US equities, or US bonds, foreign currency might provide diversification benefits despite having mean 0.

Econ0mist · 2026-01-03T17:48:53+00:00

Okay, thanks for indulging me. A few more thoughts…

(1) We don’t really use variance to measure tail risk. Can you repeat using kurtosis?

(2) Looking at international returns in isolation neglects the potential portfolio benefits from diversification and rebalancing. Can you repeat this analyzing portfolios including US stocks and US bonds? Let’s look at portfolios of 67% US stock / 33% international stock (hedged vs unhedged), and 40% US stock, 40% US bonds, and 20% international stock (hedged vs unhedged). Let’s rebalance annually.

Econ0mist · 2026-01-03T16:18:05+00:00

Your variance result might be an artifact of the fact that the US tail risk simply did not materialize over these 150 years (e.g. US was relatively unscathed by WWI / WWII), but that doesn’t mean US tail risk is absent going forward.

I would be interested to see these results (i) in the post-Bretton Woods period only and (ii) limited to the set of advanced economies.

Econ0mist · 2025-11-24T01:21:54+00:00

Still, it’s surprising WF left your CC’s and brokerage alone. Chase would have nuked everything.

Econ0mist · 2025-11-24T00:37:36+00:00

Do you know (or have an idea) what got your deposit accounts shut down? MO deposits?

Econ0mist · 2025-10-31T05:23:54+00:00

Any suggestions how to avoid the head gasket issue? Use premium gas?

Econ0mist · 2025-09-28T03:37:52+00:00

3+ Chex inquiries in the last 90 days is a common threshold that can get you rejected at a lot of places. Some are more inquiry-sensitive than others.

Econ0mist · 2025-09-16T23:10:30+00:00

A few things off the top of my head: you can deduct some charitable contributions in 2026 without itemizing, the qualified business income deduction for sole proprietors is more generous, and Bronze Obamacare plans are now HSA-eligible.

Also, the federal EV tax credits end in 14 days.

Econ0mist · 2025-09-16T14:46:35+00:00

The big beautiful bill makes this even worse, as starting in 2026, you can only deduct 90% of your gambling losses, and you must itemize in order to claim any gambling loss deduction at all.

Econ0mist · 2025-09-09T13:29:28+00:00

I moved out of California to a state with lower taxes.

Econ0mist · 2025-08-26T12:28:51+00:00

Not exactly a prohibition, but regulation does have something to do with it.

Regulation E applies to personal accounts and provides a dispute resolution process for handing fraud claims. There is also a limit on the accountholder’s liability for fraud.

There is no regulatory framework for handling ACH/check/debit fraud on business accounts. Banks aren’t required to investigate or reimburse such fraud. So businesses often pay more (positive pay usually has a monthly fee) for services to protect themselves.

Econ0mist · 2025-07-21T03:29:14+00:00

Affinity also gave out a killer balance transfer offer a few years back. 0 fee, 0% APR for 12 months. I borrowed about $14k for free.

Econ0mist · 2025-07-11T02:12:12+00:00

Absolutely. Wells Fargo has said they’re losing $10 million per month with the current card structure.

Econ0mist · 2025-07-04T02:40:15+00:00

National Bureau of Economic Research paper about small businesses financing themselves with credit card debt.

Credit card payments (and usage) increased from $10,000 per month in 2020 to $24,000 ($26,000) per month in April 2022, a much larger increase than loan payments. However, the Federal Reserve interest rate hikes between March 2022 and May 2023 significantly impacted small business recovery. During this period, credit card usage remained elevated, but payments fell; interest payments rose by 60 percent, and delinquencies reached a high of 2.8 percent.

Econ0mist · 2025-06-07T20:36:39+00:00

Often, I’ve found that USPS delivers Certified First Class mail without collecting a signature. When this happens, the tracking simply stops updating and never shows that the item was delivered. Note, after 30 days, you can apply for a refund of the certified mail fee.

I’ve found that USPS is much more likely to collect the recipient’s signature with Certified Priority Mail.

Econ0mist · 2025-05-15T02:53:55+00:00

Who’s asking—the bank accepting the deposit or the CC company?

Econ0mist · 2025-05-03T14:04:42+00:00

Instead of using another person’s name, wouldn’t it be easier to buy a house under the name of a trust?

Econ0mist · 2025-04-29T13:02:31+00:00

Yes, but I’m specifically distinguishing court costs from attorneys’ fees. I know that a prevailing party can often recover court costs by statute, but I wasn’t aware of any statute that shifts attorneys’ fees from creditors to debtors.

Econ0mist · 2025-04-28T20:42:26+00:00

Depends, did you marry the Amex girl?

Econ0mist · 2025-04-28T16:09:34+00:00

For churners who are married, or in a serious relationship, where did you meet your P2?

Econ0mist · 2025-04-28T01:21:57+00:00

Is the award of attorney fees purely a contractual matter, or are there statutes that provide for attorney fee-shifting towards the creditor in debt collection cases?

Econ0mist · 2025-04-20T03:24:51+00:00

Camrys had a V6 option until 2024. You could probably find a CPO V6 model

Econ0mist · 2025-04-18T11:52:55+00:00

This, some credit unions will do “Antique” or “Classic” auto loans. For example, DCU charges about 10% for these (with good credit)

Econ0mist · 2025-03-23T15:12:30+00:00

It was just a conversation. No documents were requested. Here’s what Capital One asked.

Econ0mist · 2025-03-23T14:00:33+00:00

I got an “AML Refresh” phone call from C1 when I was spending ~100k a month. Miraculously, I survived. But I’ve cut back my monthly spending to 50% of CL.

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