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{{drop|H|unter Barkley was}} an [[interest rate swap]]s trader. That experience gave him an idea. ''Why not hedge away this volatility?'' Different sectors were “long” or “short” the risk of babbling hysteria, which he labelled ''[[π]]'', at different points in the cycle. (“[[Π]]” came from the Greek παράνοια, (''paranoia''), and conveyed the pleasing idea of not just collective madness but circularity, running on a hamster wheel and so on — all fundamental properties of the employment relationship.) | {{drop|H|unter Barkley was}} an [[interest rate swap]]s trader. That experience gave him an idea. ''Why not hedge away this volatility?'' Different sectors were “long” or “short” the risk of babbling hysteria, which he labelled ''[[π]]'', at different points in the cycle. (“[[Π]]” came from the Greek παράνοια, (''paranoia''), and conveyed the pleasing idea of not just collective madness but circularity, running on a hamster wheel and so on — all fundamental properties of the employment relationship.) | ||
At its onset, “[[Trad fi|trad-fi]]” firms are [[Short|''short'']] and potty start-ups [[Long|''long'']] ''[[π]]''. Eventually the lunacy levels off, reality sets in and employment relations [[Mean | At its onset, “[[Trad fi|trad-fi]]” firms are [[Short|''short'']] and potty start-ups [[Long|''long'']] ''[[π]]''. Eventually the lunacy levels off, reality sets in and employment relations [[Mean reversion|revert to the mean]], whereupon the ''[[π]]'' curve flattens and then inverts. | ||
If one could only match off these long and short exposures across the cycle, Barkley realised, firms on either side of the bid could hedge their exposure to [[π]]. | If one could only match off these long and short exposures across the cycle, Barkley realised, firms on either side of the bid could hedge their exposure to [[π]]. |