Tuesday, January 31, 2012
Let Us Now Praise Private Equity - National Review Online
Let Us Now Praise Private Equity - National Review Online
And from the comments:
"I thought private equity was about taking fairly sound companies, buying them up by issuing huge debts in their names, gutting all the maintanence and staff, sucking out all the cash into your private equity fund, flipping them public and getting slick salesmen to pump it to $30/share only to have it crash to a $1/share a year after you unloaded your holdings when people realized how much long term damage was done to the company.
And from the comments:
"I thought private equity was about taking fairly sound companies, buying them up by issuing huge debts in their names, gutting all the maintanence and staff, sucking out all the cash into your private equity fund, flipping them public and getting slick salesmen to pump it to $30/share only to have it crash to a $1/share a year after you unloaded your holdings when people realized how much long term damage was done to the company.
Or maybe that’s just my personal experience."
Monday, January 30, 2012
A Better Proletariat for Charles Murray
Cogitamus: A Better Proletariat (and More Brandy Please**) for Charles Murray:
The area where one�sees�this disingenuousness in perpetually full flower is the treatment of the white working class by the intellectual right.� Time and again, one reads about the identification�of the Republican Party with working class whites -- a vital element of the base after all -- and yet one struggles in vain to think of a single policy advocated by the right which would have the practical effect of improving working class life.
Sunday, January 29, 2012
How do states act after they get nuclear weapons? — The Monkey Cage
Nukes make states less prone to violence. The US, not on the graph, is the obvious outlier.
Saturday, January 28, 2012
N.Y. Airports Account for Half of All Delays - NYTimes.com
Why it makes sense to invest in high speed rail links on the Northeast corridor: one third of all flight delays nationwide are attributable to delays in NYC airports.
Thursday, January 26, 2012
Wednesday, January 25, 2012
Udacity and the future of online universities | Felix Salmon
I dropped out ;-(
But 170 of the 200 Stanford students also dropped.
But 170 of the 200 Stanford students also dropped.
The real story is growing equality
The growth of Chinese economy brought 100's of millions out of rural poverty. The American middle class suffered relatively as a byproduct of that growth, but the net gain to humanity is very positive.
On the other hand, this still does not address the issue of why the top 1% captures more than its share of growth, both pre and after tax.
No one knows nothing
EconomPic: Apples Numbers Were B-A-N-A-N-A-S:
Apple’s results highlight this simple fact: no one knows nothing.
The world’s hunger for public goods - FT.com
The key debate in the US now is what are the appropriate public goods. The one point of agreement is defense.
Amid Attacks on Private Equity, Efforts to Study Its Value - NYTimes.com
Studies of Private Equity value creation have ambiguous results.
Studies of Private equity fund managers show huge value creation (for the managers).
Tuesday, January 24, 2012
New Reality Show: Real Economists of the Ivory Tower | The Big Picture
Summary of the recent row among economists.
New Reality Show: Real Economists of the Ivory Tower | The Big Picture
New Reality Show: Real Economists of the Ivory Tower | The Big Picture
Robert Reich (The State of Our Disunion: A Globalizing Private Sector, A Government Overwhelmed by Corporate Money)
The private sector cannot lead the way to more and better jobs in the United States. The private sector is only interested in growth and profitability of the individual firm.
"The strategic responsibility for making Americans more globally competitive can’t be centered in the private sector because the private sector is rapidly going global, and it’s designed to make profits rather than good jobs. The core responsibility has to be in government because government is supposed to be looking out for the public, and investing in public schools, colleges, infrastructure, and basic R&D. "
Robert Reich (The State of Our Disunion: A Globalizing Private Sector, A Government Overwhelmed by Corporate Money)Monday, January 23, 2012
Sunday, January 22, 2012
Saturday, January 21, 2012
Thursday, January 19, 2012
Capital Gains and Tax Rates
There does not seem to be much of a relationship between levels of tax on capital gains and investment.
Wednesday, January 18, 2012
Tuesday, January 17, 2012
Monday, January 16, 2012
: Libertarian Illusions
Jeffrey Sachs: Libertarian Illusions:
Yet the error of libertarianism lies not in championing liberty, but in championing liberty to the exclusion of all other values. Libertarians hold that individual liberty should never be sacrificed in the pursuit of other values or causes. Compassion, justice, civic responsibility, honesty, decency, humility, respect, and even survival of the poor, weak, and vulnerable -- all are to take a back seat.
Sunday, January 15, 2012
The last Kodak moment?
For all the talk of failure, Kodak still has 6 billion dollars in revenue, which puts it at the 327th ranked US company in sales.
Saturday, January 14, 2012
Allen West on the Marines Incident: 'Shut Your Mouth, War Is Hell' | The Weekly Standard
The atrocities in Afghanistan are a feature, not a bug, of our military. If you send people to kill, they will terminate with extreme prejudice. We try to sanitize war only to justify it.
This is why counterinsurgency is a bad bet.
Romney’s Victim?
Cast as Romney’s Victim, Gaffney, S.C., Says, ‘Huh?’ - NYTimes.com:
The problem with Romney, in the eyes of middle America.
“It’s the Mormon thing, that and the Northern thing along with the wealth issue,”
Friday, January 13, 2012
Private Equity is Financial Engineering
The re-branding of the industry from LBO to private equity was quite stunning. There are some success stories but it even those involve tax arbitrage.
Inside the Fed in 2006 - A Coming Crisis, and Banter - NYTimes.com
Inside the Fed in 2006 - A Coming Crisis, and Banter - NYTimes.com:
This makes me feel a little better for getting it wrong. A lot of smarter guys were wrong.
" The transcripts of the 2006 meetings, released after a standard five-year delay, clearly show some of the nation’s pre-eminent economic minds did not fully understand the basic mechanics of the economy that they were charged with shepherding. The problem was not a lack of information; it was a lack of comprehension, born in part of their deep confidence in economic forecasting models that turned out to be broken.
Thursday, January 12, 2012
The behavioural economist's dilemma: induction versus deduction
Worthwhile Canadian Initiative: The behavioural economist's dilemma: induction versus deduction:
Economics, he said, is basically a deductive discipline.�Psychology, on the other hand, is inductive.�
It's a caricature, a gross over-simplification. But it has an element of truth.
Economists like to begin with a general model, work out its implications, and then go to the data to test the theory. Yes, there are applied economists who spend their lives trying to find out facts about the world. But facts in and of themselves are uninteresting unless they illuminate economists' view of the world, and can be explained in economic language.
Psychologists begin by observing people's behaviour, looking for generalizable patterns. For example, if people are observed acting as if they are averse to losses, psychologists infer that loss aversion exists. Yes, psychologists have conceptual explanatory frameworks, such as prospect theory, to explain such phenomena,but these theories are not the elegant mathematical creations favoured by economists. And where is the status and prestige? �Look at the psychology journal rankings. There isn't a top-ranked�journal with "theory" in the title.
It's a caricature, a gross over-simplification. But it has an element of truth.
Economists like to begin with a general model, work out its implications, and then go to the data to test the theory. Yes, there are applied economists who spend their lives trying to find out facts about the world. But facts in and of themselves are uninteresting unless they illuminate economists' view of the world, and can be explained in economic language.
Psychologists begin by observing people's behaviour, looking for generalizable patterns. For example, if people are observed acting as if they are averse to losses, psychologists infer that loss aversion exists. Yes, psychologists have conceptual explanatory frameworks, such as prospect theory, to explain such phenomena,but these theories are not the elegant mathematical creations favoured by economists. And where is the status and prestige? �Look at the psychology journal rankings. There isn't a top-ranked�journal with "theory" in the title.
Why Is Inequality Higher in America?
Why Is Inequality Higher in America? — The Monkey Cage:
There are more avenues to corrupt the system, therefore the system is more corrupt.
When we examine our set of 23 long-standing democracies in advanced economies, we find that slightly more than half of these countries (12.5) actually have only one electorally generated veto player … There are 7.5 countries with two veto players, two countries (Switzerland and Australia) with three veto players, and only one country, the United States of America, with four electorally generated veto players
Nature Conservancy hijinks, yet again
It is not about tax rates. It is about how smart lawyers manipulate the tax code.
Wednesday, January 11, 2012
Are Private Equity Firms Evil Doers?
Not clear they are evil. But they are financial engineers, not business experts.
Let’s talk about the market economy - FT.com
Let’s talk about the market economy - FT.com:
Modern "capitalists"
So the business leaders of today are not capitalists in the sense in which Arkwright and Rockefeller were capitalists. Modern titans derive their authority and influence from their position in a hierarchy, not their ownership of capital. They have obtained these positions through their skills in organisational politics, in the traditional ways bishops and generals acquired positions in an ecclesiastical or military hierarchy.
The Spoils of War
The Spoils of War: Huntsman, Paul and Santorum each represents a distinct wing of the party, and their most cherished causes conflict with one another. (Gingrich represents less a wing than a foul mood.)
Tuesday, January 10, 2012
Slow Growth In Health Spending
Trends continue until they can't. Why the worry about us spending all of our gdp on healthcare is unfounded.
Monday, January 09, 2012
Goal of the Fed
Indeed, the monetary authorities seem to be following the 2008 playbook: bail out the banks, but by no means stimulate nominal GDP.
America’s Unlevel Field
At the most selective, “Tier 1” schools, 74 percent of the entering class comes from the quarter of households that have the highest “socioeconomic status”; only 3 percent comes from the bottom quarter.
Sunday, January 08, 2012
Save the City?
Good tirade against the financial sector.
States Pay to Train Workers, to Companies’ Benefit - NYTimes.com
Companies get tax breaks and now training programs for their new employees.
Saturday, January 07, 2012
A Hidden Cost of Military Cuts Could Be Invention and Its Industries - NYTimes.com
So government spending is stimulus only if it is defense spending?
How Austerity Is Killing Europe
How Austerity Is Killing Europe by Jeff Madrick | NYRblog | The New York Review of Books:
Germany has the financial wherewithal to lead this rescue. But it is blocking the fiscal union from acting like a single nation with compassion for all Eurozone citizens. It is also refusing to underwrite a substantial new fiscal stimulus—good-old fashioned Keynesianism. Is this a new national arrogance? I hope not. So far, Germany is benefitting from the crisis as investors buy German bonds as safe havens from the turmoil. In fact, the failure to act will soon affect the German economy. It will take financial losses on its banks’ loans to the peripheral nations and its export markets will weaken. The bond buyers who are now gobbling up German debt, thus keeping rates low while they rise in Italy, Greece, Portugal, and Spain, will likely stop doing so.
The EU leaders must get over their obsession with eliminating deficits. They now want to reduce every country’s deficit to less than 0.5 percent. This is disaster. It will lead to very slow growth for a long time. Instead, they must use temporary deficits to restart growth. Rarely has policymaking been this poor. Sooner than later, the citizens of these nations will say, No more!, and political instability will result.
The EU leaders must get over their obsession with eliminating deficits. They now want to reduce every country’s deficit to less than 0.5 percent. This is disaster. It will lead to very slow growth for a long time. Instead, they must use temporary deficits to restart growth. Rarely has policymaking been this poor. Sooner than later, the citizens of these nations will say, No more!, and political instability will result.
The Myth of Japan’s Failure
If an alien visited NY, London, Shanghai and Tokyo, they might pick Japan as the most successful economy of the last decade.
And a couple of counter arguments.
http://togetrichisglorious.blogspot.com/2012/01/truth-about-japan.html
From Krugman and Yglesias
Friday, January 06, 2012
Devaluations do not always work
And for every Iceland, where devaluation helped, there is a Hungary, where it does not seem to be producing riches.
Corporate Profits Have Rebounded To Pre-Recession Levels, But Corporate Tax Revenue Hasn't
The distribution issue is not a post tax issue. It is pre tax.
Thursday, January 05, 2012
David Ignatius Hides Upward Redistribution Policies as Market Outcomes | Beat the Press
The market is not god. There are very specific policies which have led to upward distribution of wealth.
Wednesday, January 04, 2012
Seven years after sieges, Fallujah struggles
Lots of articles in US press on ptsd. Not much on this:
Seven years after sieges, Fallujah struggles - Features - Al Jazeera English
Seven years after sieges, Fallujah struggles - Features - Al Jazeera English
Tuesday, January 03, 2012
What Finland Shows China, U.S
What Finland Shows China, U.S. | China Power:
Many Ivy Leaguers became so because they’re motivated by short-term rewards, and so they naturally believe that everyone is motivated to perform their best if offered short-term rewards.�
The Finish experience.
The Finish experience.
Kahneman, Greed and Success,
It isn't hard to make a lot of money, if all you do is want to make a lot of money.
Kahneman highlights an important, neglected reason why some people are rich and others are poor: some people care about money more than the rest of us.� People who want to be rich make the choices and sacrifices conducive to that end - and on average they succeed.�
Monday, January 02, 2012
Los Angeles Police Arrest Suspect
NYC's schadenfreude
For all its considerable delights, Southern California always seems faintly on the cusp of an apocalypse. There are palm trees, year-round gardens and splendid weather — it was 81 degrees and sunny on Sunday — but there are also mudslides, gang shootings, wildfires and earthquakes.
Sunday, January 01, 2012
Contractors' role grows in drone missions, worrying some in the military
We outside the military should be worried as well.
Way to start off the year.
Mark Ames: Ezra Klein’s shine job on the Kochs � naked capitalism:
What do you really think about Ezra Klein?
Really, the problem isn’t so much Ezra–after all, he’s a former roommate of Megan [McArdle]’s and a longtime friend of hers, Weigel’s, and every other corrupt libertard scavenger in DC–the problem is that the Washington Post must have known what they were doing when they zeroed in on this gullible, star-fucking pipsqueak to represent the so-called liberal consensus. The Fred Hiatts and Charles Lanes chose Ezra Klein for the same reason Roger Ailes chose Alan Colmes to sit next to Hannity.
Old Goalie Steals Show
Playing Five Minutes, Old Goalie Steals Show - NYTimes.com: “You’re never too old to go after your passion,” said Parent, who lives on a houseboat in Wildwood, N.J. “There’s a message there for a lot of people. You have to prepare for it. Will you perform the same as you did 30 years ago? Of course not, but you don’t quit. It brings a quality of life. So my message here to the people tonight is: Don’t give up. I’m 66 years old, I get on the ice five minutes, but I did it.”
Questions for Business Success
How Samuel Palmisano of I.B.M. Stayed a Step Ahead - Unboxed - NYTimes.com:
• “Why would someone spend their money with you — so what is unique about you?”
• “Why would somebody work for you?”
• “Why would society allow you to operate in their defined geography — their country?”
• “And why would somebody invest their money with you?”
• “Why would somebody work for you?”
• “Why would society allow you to operate in their defined geography — their country?”
• “And why would somebody invest their money with you?”
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