Behavior & Risk

This episode reviews the rise and fall of Archegos, the 2013 Midtown Manhattan family office run by Bill Hwang, who previously settled SEC insider-trading charges at Tiger Asia. Using financing from six banks—Goldman Sachs, Morgan Stanley, Credit Suisse, Nomura, Deutsche Bank, and UBS—Archegos employed heavy leverage and total return swaps to build concentrated, largely undisclosed exposures, ampl...

This episode of Behavior and Risk examines how AI is being deployed across healthcare—from chatbots and personalized treatment planning to imaging and surgical tools—and focuses on the regulatory landscape, especially in the United States. We argue U.S. oversight is a patchwork that relies heavily on the FDA’s “substantial equivalence” pathway (97% of authorizations), a framework rooted in older s...

We break from past episodes to analyze the ongoing Blue Owl Capital saga and make predictions about a current case's outcome, using it as a live case study in risk management and investor psychology. We discuss private credit markets, why borrowers use it versus public markets, and how Blue Owl’s OBDC II fund became stressed amid heavy concentration in tech/SaaS-focused loans. After proposing...

We compare memories of the failed AOL–Time Warner merger with the turbulent 2025–2026 battle for Warner Bros. Discovery, arguing the new case is fundamentally different despite superficial parallels. We trace the timeline from WBD’s plan to split streaming/studios from legacy cable debt, through Paramount’s escalating bids, Netflix’s later entry and perceived “white knight” alignment with WBD’s br...

In this episode of Behavior and Risk, we discuss Singapore’s Monetary Authority imposing collective fines totaling $21.5M on nine financial institutions—including UBS, Citibank, and Julius Baer—tied to a 2023 money laundering case involving more than $2.2B in illicit assets, the second-largest collective penalty in Singapore’s history. We recap how authorities detected suspicious networks in 2021,...

In this thought-provoking episode, Rich & John delve deep into the concept of loss aversion and its pervasive influence on human behavior and decision-making. Unlike previous episodes that focus on specific cases, this discussion explores the foundational aspects of loss aversion, describing its implications for risk management and beyond. Listeners will gain insights into the formal definitio...

In this episode of 'Behavior and Risk,' we explore the world of stable coins, a unique type of cryptocurrency designed to minimize price volatility by pegging its value to a stable asset like the US dollar or gold. We discuss the skyrocketing growth of the stable coin market, the various benefits they provide, particularly in countries with unstable domestic currencies, and the critical ri...

In this episode, we delve into the world of Central Bank Digital Currencies (CBDCs), with a focus on the three countries that have fully adopted them: The Bahamas, Jamaica, and Nigeria. We'll explore how CBDCs operate, their potential benefits, and the significant risks associated with them. The discussion includes the global interest in CBDC pilots, the differences between retail and wholesal...

In this episode, we explore the rise and fall of Nikola Corporation, the hydrogen truck company founded in 2015 by Trevor Milton. Initially billed as the Tesla of hydrogen trucks, Nikola quickly surged to a $30 billion valuation despite having no mass-produced vehicles, revenue, or even prototypes. The hype unraveled in 2020 when Hindenburg Research revealed staged demos and misleading claims, lea...

In this episode, we dive deep into the world of telematics or usage-based insurance (UBI) for automobiles. We explore how UBI aims to reduce car insurance premiums based on actual driving behavior recorded via smartphones or car devices. Despite its potential to reward safe drivers and provide personalized coverage, widespread adoption faces resistance due to concerns over data privacy, the percei...

In this episode, we delve into the complex and often misunderstood world of sociopathy within the business leadership context. Popular culture has portrayed sociopaths as extreme and malevolent individuals, but the reality is considerably more complex and nuanced. We explore how sociopathy, often falling under the umbrella of Antisocial Personality Disorder (ASPD), manifests in high-functioning, o...

The episode explores the dramatic rise and fall of Charlie Javis, an ambitious entrepreneur who founded Frank, a FinTech EdTech firm aimed at simplifying the financial aid process for students. JP Morgan Chase acquired Frank for $175 million, persuaded by the potential to tap into a valuable Gen Z market. However, due diligence failures led to the realization that Frank’s user base was grossly inf...

Explore the deep-rooted legacy and controversial history of 3M's use of PFAS chemicals in this comprehensive video. We dive into the origins of 3M, its massive product portfolio, and the alarming internal studies that flagged PFAS as toxic as early as the 1950s. Despite mounting evidence and pressure, 3M continued production for decades, only ceasing after significant legal and public scrutiny...

In this edition of 'Behavior and Risk,' the discussion focuses on the National Flood Insurance Program (NFIP) in the United States, addressing its historical context, structural and operational problems, and the behavioral challenges that impact its effectiveness. Originating in 1968 to fill the gap left by private insurers, the NFIP has struggled with limited success, largely due to adver...

In this episode, we delve into the contrasting fates of Google Glass and the Ray-Ban Meta Smart Glasses. We explore why Google Glass failed despite being a pioneering product, facing public outrage over privacy concerns and high prices. In contrast, Ray-Ban Meta has seen phenomenal success with the adoption of advanced technology and clever marketing strategies, selling millions of units since its...

In this episode, we investigate the collapse of the FTX cryptocurrency exchange, delving into its causes and exploring potential preventative measures for future financial institution failures. We discuss common risk factors such as over-leveraging and overconfidence, and the unusual dynamics of the FTX collapse, including managerial malfeasance and the impact of external forces like Binance's...

In this episode, we dive deep into the dramatic rise and fall of Silicon Valley Bank (SVB), tracing its journey from a small bank in Santa Clara, California, to its collapse in March 2023. We analyze the factors that led to its downfall, discussing the bank's high-risk appetite, regulatory oversights, failed stress tests, and cognitive biases within its management. Join us as we explore the lesson...

In this episode, we dive deep into the alarming fatality rates of the Brightline, an intercity high-speed rail operating in central and southern Florida. We explore the shocking statistics underlying Brightline, including the highest collision fatality rate among US railways, and discuss various contributing factors including historical pedestrian and driver behaviors, regulatory challenges, and c...

In this episode of Behavior and Risk, we delve into the recent lawsuit filed by Uber against DoorDash, alleging anti-competitive practices. We explore the competitive landscape of the food delivery industry, the distinct business models of Uber and DoorDash, and the potential implications of this legal battle. Join us as we analyze the motivations behind Uber's legal actions, the financial stakes...

In this episode, we delve into the fascinating story of how DeepSeek, a Chinese AI startup, upended the tech and finance sectors with its R1 chatbot. Following an intense market crash spurred by DeepSeek's unexpected rise, Rich and John explore the behavioral and risk management failures that allowed this disruption to catch the industry off guard. We examine DeepSeek's unique development...

In this episode of Behavior and Risk, we delve into the first 35 days of Donald Trump’s second term as President of the United States. Winning a resounding victory in the 2024 election, Trump’s early days have been marked by numerous executive orders, controversial cabinet appointments, and significant federal government terminations. We explore whether his seemingly chaotic approach to governance...

Early 2025 saw wildfires tear through Los Angeles at an unthinkable scale. In this episode, we examine what this tragic event can teach us about the insurance industry, home purchase decisions, and the overall structure of risk appetite.

The last few months seem to be the season of governmental regime change, both planned and unexpected. How are countries responding to systemic uncertainty, and what can companies to navigate this kind of change?

In this episode, we examine the phenomenon of deal lust. What is it, how can it impact M&A transactions, and what does it teach us about group dynamics?