Compensation & Incentives

“Incentive structures work, so you have to be very careful about what you incent people to do because various incentive structures create all sorts of consequences which you can’t anticipate.”

This note is about the role of compensation & incentives. Specifically, those structured by the Federal Reserve & how they seem to be veering far from the mark.

Life After LIBOR: Eurodollar Edition

So you’ve heard that LIBOR is going away, due to be replaced by SOFR? Well, if you’re not a regular user of interest rate swaps & swaptions (which, unless you’re an institutional-level client, is probably true), then what you really care about is how this impacts the thing you can most readily trade: Eurodollar futures. Here’s how Eurodollars are going to work after LIBOR.

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