Money for Nothing
The Golden Age of Arbitrage?
It’s easy to miss The Arbitrager pub in London. Nestled between sandwich shops on the perimeter of Drapers’ Hall, a nineteenth century guildhouse not far from the Bank of England, it’s a small place with a narrow entrance and few seats. But pass by on a summer’s evening and you’ll see brokers, traders and… arbitragers (arbitrageurs?) gather along the ...
The narrative frames the current state of finance as a "golden age" of arbitrage, which serves to legitimize and amplify the scale of trading activity, shifting the focus from risk management to opportunity exploitation. The vast figures cited—trillions in exposure and revenue—act as powerful indicators of systemic flow, but they necessitate scrutiny regarding the risk-adjusted nature of these returns. The emphasis on the growth of private markets and the recycling of credit suggests that opport...