Thursday, May 31, 2012
Tuesday, May 29, 2012
Facebook: For Once, The Investment Bank Was Behaving Ethically
FB did the right thing. They sold the maximum number of shares at the highest price the market would bear.
Facebook: For Once, The Investment Bank Was Behaving Ethically - Business Insider
Facebook: For Once, The Investment Bank Was Behaving Ethically - Business Insider
Monday, May 28, 2012
A Fast Food Burger Is 3 Times Larger Now Than in the 1950s
Or why Americans spend more on healthcare.
Health - Brian Fung - Infographic: A Fast Food Burger Is 3 Times Larger Now Than in the 1950s - The Atlantic
Health - Brian Fung - Infographic: A Fast Food Burger Is 3 Times Larger Now Than in the 1950s - The Atlantic
More Comments on Principles-Based Regulation,
Great post. For more on the topic, click thru the links.
Regulation is important to protect the weak and uninformed.
Kling's line is very simple:
More Comments on Principles-Based Regulation, Arnold Kling | EconLog | Library of Economics and Liberty
Regulation is important to protect the weak and uninformed.
Kling's line is very simple:
- Ideal regulatory systems can be modeled as games.
- Regulators *try* to solve problem by creating regulations.
- The regulated participants *try* to circumvent regulations by following the letter of the law, avoiding the intent.
- In any system where there is enough money involved, there is no contest...the regulated participants necessarily win.
- Letter-of-the-law regulation is therefore *guaranteed* to fail in high $ industries like finance.
- This is a big problem, insofar as we can agree that an unregulated finance industry is undesireable.
Seems all true and obviously so.
The difficult part is that Kling continues:
- Therefore we should try a different form of regulation: PBR
More Comments on Principles-Based Regulation, Arnold Kling | EconLog | Library of Economics and Liberty
At West Point, Asking if a War Doctrine Was Worth It
Does counterinsurgency work? “Yes,” he said. “Is it worth what you paid for it? That’s an entirely different question.”
At West Point, Asking if a War Doctrine Was Worth It - NYTimes.com:
At West Point, Asking if a War Doctrine Was Worth It - NYTimes.com:
Sunday, May 27, 2012
Everyone Who Thinks IPO "Pops" Are Good Has Been Brainwashed
FB IPO was near the correct price for the selling shareholders.
Everyone Who Thinks IPO "Pops" Are Good Has Been Brainwashed - Business Insider
Everyone Who Thinks IPO "Pops" Are Good Has Been Brainwashed - Business Insider
Friday, May 25, 2012
Thursday, May 24, 2012
Was Greed Good?
Private equity boom did not coincide with an increase in US productivity. It did coincide with an increase in US inequality.
Was Greed Good? - NYTimes.com
Was Greed Good? - NYTimes.com
Wednesday, May 23, 2012
The Importance of Nirvana, Arnold Kling | EconLog | Library of Economics and Liberty
The Importance of Nirvana, Arnold Kling | EconLog | Library of Economics and Liberty:
The nirvana fallacy is the logical error of comparing actual things with unrealistic, idealized alternatives. It can also refer to the tendency to assume that there is a perfect solution to a particular problem.
The nirvana fallacy is the logical error of comparing actual things with unrealistic, idealized alternatives. It can also refer to the tendency to assume that there is a perfect solution to a particular problem.
Creating Jobs Wasn’t Romney’s Job
Balanced view of private equity. But not about the carry.
Creating Jobs Wasn’t Romney’s Job - NYTimes.com
Creating Jobs Wasn’t Romney’s Job - NYTimes.com
Monday, May 21, 2012
Sunday, May 20, 2012
Discord at JPMorgan Investment Office Blamed in Huge Loss
The knives come out. Expect more articles like this as various parties try to defend themselves in the press.
If she had lyme disease and was not in the office, why was she paid 14 million?
Discord at JPMorgan Investment Office Blamed in Huge Loss - NYTimes.com
If she had lyme disease and was not in the office, why was she paid 14 million?
Discord at JPMorgan Investment Office Blamed in Huge Loss - NYTimes.com
Saturday, May 19, 2012
With friends like these...
With friends like these... - FT.com:
Making a relationship Facebook Official, or “Facebook Real”, is like making the relationship itself real, as though it wouldn’t be if it weren’t declared so on a platform where hundreds – if not thousands – of friends could see it, and add their own comments. It’s a commitment. The love notes and photos from dates provide ongoing, continuous evidence of togetherness – and send a clear message to other potential suitors to back off. “Relationship status on Facebook has an aura about it,” Michael says. “You can see it all the time; people comment on it, they Like it. There’s a pressure to it [a pressure on the people in the relationship].”
Making a relationship Facebook Official, or “Facebook Real”, is like making the relationship itself real, as though it wouldn’t be if it weren’t declared so on a platform where hundreds – if not thousands – of friends could see it, and add their own comments. It’s a commitment. The love notes and photos from dates provide ongoing, continuous evidence of togetherness – and send a clear message to other potential suitors to back off. “Relationship status on Facebook has an aura about it,” Michael says. “You can see it all the time; people comment on it, they Like it. There’s a pressure to it [a pressure on the people in the relationship].”
Friday, May 18, 2012
What Makes Countries Rich or Poor? by Jared Diamond
Jared Diamond of "Guns, Germs and Steel" defends his thesis that geography and microbes matter. Geography and microbes contribute to the foundations of institutions.
What Makes Countries Rich or Poor? by Jared Diamond | The New York Review of Books
Money quote, for countries and for ourselves:
" The factors are multiple and diverse. We all know, from our personal experience, that there isn’t one simple answer to the question why each of us becomes richer or poorer: it depends on inheritance, education, ambition, talent, health, personal connections, opportunities, and luck, just to mention some factors. Hence we shouldn’t be surprised that the question of why whole societies become richer or poorer also cannot be given one simple answer."
What Makes Countries Rich or Poor? by Jared Diamond | The New York Review of Books
Money quote, for countries and for ourselves:
" The factors are multiple and diverse. We all know, from our personal experience, that there isn’t one simple answer to the question why each of us becomes richer or poorer: it depends on inheritance, education, ambition, talent, health, personal connections, opportunities, and luck, just to mention some factors. Hence we shouldn’t be surprised that the question of why whole societies become richer or poorer also cannot be given one simple answer."
U.S. Ambassador to Israel Speaks of Military Option for Iran
U.S. Ambassador to Israel Speaks of Military Option for Iran - NYTimes.com:
What are these guys thinking about?
“There’s an irony in the situation, because a hawkish position on Iran probably makes a peaceful diplomatic outcome more likely, and that could be what he was trying to do,” he said.
What are these guys thinking about?
“There’s an irony in the situation, because a hawkish position on Iran probably makes a peaceful diplomatic outcome more likely, and that could be what he was trying to do,” he said.
‘Princelings’ in China Use Family Ties to Gain Riches
Stories like these really need to mention that there is not much difference between China and the U.S. in this regard.
‘Princelings’ in China Use Family Ties to Gain Riches - NYTimes.com
‘Princelings’ in China Use Family Ties to Gain Riches - NYTimes.com
Thursday, May 17, 2012
Wednesday, May 16, 2012
Jamie Dimon’s failure
"Taking a much bigger-picture view, however, what was really going on here was that JP Morgan had hundreds of billions of dollars in excess deposits, thanks to its too-big-to-fail status. And rather than lending out that money and boosting the economy, Jamie Dimon decided to simply play with it in financial markets, just as a hedge fund would. "
Jamie Dimon’s failure | Felix Salmon
Jamie Dimon’s failure | Felix Salmon
Tuesday, May 15, 2012
Red Flags Said to Go Unheeded by Chase Bosses - NYTimes.com
Red Flags Said to Go Unheeded by Chase Bosses - NYTimes.com:
The story behind most blowups:
“There was a lopsided situation, between really risky positions and relatively weaker risk managers,” said a former trader with the chief investment
The story behind most blowups:
“There was a lopsided situation, between really risky positions and relatively weaker risk managers,” said a former trader with the chief investment
Monday, May 14, 2012
9 Things No One Wants to Regret When They’re Older
9 Things No One Wants to Regret When They’re Older:
In the end, we only regret the chances we didn’t take, relationships we were afraid to have, and the decisions we waited too long to make.
In the end, we only regret the chances we didn’t take, relationships we were afraid to have, and the decisions we waited too long to make.
Sunday, May 13, 2012
Saturday, May 12, 2012
In JPMorgan Chase Trading Bet, Its Confidence Yields to Loss
Overconfidence, in trading and in life, can lead to spectacular losses.
In JPMorgan Chase Trading Bet, Its Confidence Yields to Loss - NYTimes.com:
Money quote:
"Mr. Dimon knew about the expansion of the unit, whose increasing risks didn’t raise concerns presumably because its profits were rising."
In JPMorgan Chase Trading Bet, Its Confidence Yields to Loss - NYTimes.com:
Money quote:
"Mr. Dimon knew about the expansion of the unit, whose increasing risks didn’t raise concerns presumably because its profits were rising."
Friday, May 11, 2012
Thursday, May 10, 2012
Wednesday, May 09, 2012
Tuesday, May 08, 2012
Commodity Prices and PCE Inflation
Oil and gas costs are only 3.9 percent of total costs.
Even though gas prices rise, this has little impact on overall inflation.
FRBSF Economic Letter: Commodity Prices and PCE Inflation (2012-14, 5/7/2012)
Even though gas prices rise, this has little impact on overall inflation.
FRBSF Economic Letter: Commodity Prices and PCE Inflation (2012-14, 5/7/2012)
Monday, May 07, 2012
On Financial Peace of Mind
Review of two new books on the challenges of financial planning.
Economic Principals � Blog Archive � On Financial Peace of Mind
Economic Principals � Blog Archive � On Financial Peace of Mind
Sunday, May 06, 2012
Saturday, May 05, 2012
Thursday, May 03, 2012
Mitt Romney's Partner in Crime:
Mitt Romney's Partner in Crime: Ed Conard's Unintended Consequences | MyFDL:
"Conard portrays a fantasy world. We are not fighting over capitalism versus socialism. The battle is over the crony capitalism of which both he and Romney have been major beneficiaries. We’ll leave it to his shrink to determine whether the problem is that Conard is deluded or dishonest, but the rest of us should view this book as a serious warning about the world view of his business partner."
"Conard portrays a fantasy world. We are not fighting over capitalism versus socialism. The battle is over the crony capitalism of which both he and Romney have been major beneficiaries. We’ll leave it to his shrink to determine whether the problem is that Conard is deluded or dishonest, but the rest of us should view this book as a serious warning about the world view of his business partner."
The Fault for a Trade Deficit is by Definition the Value of the Currency
A strong dollar does not equal a strong America.
The Fault for a Trade Deficit is by Definition the Value of the Currency | Beat the Press
The Fault for a Trade Deficit is by Definition the Value of the Currency | Beat the Press
The Endless Arrogance of Wall Street
Unfortunately this is a good example of how many in finance think.
The Endless Arrogance of Wall Street
And a retort.
The Endless Arrogance of Wall Street
And a retort.
Wednesday, May 02, 2012
Romney’s Former Bain Partner Makes a Case for Inequality
Great moments in complete lack of self awareness:
Romney’s Former Bain Partner Makes a Case for Inequality - NYTimes.com
Romney’s Former Bain Partner Makes a Case for Inequality - NYTimes.com
Tuesday, May 01, 2012
Re-Capturing the Friedmans
"Here, too, the Friedmans’ hopes have been disappointed. The end of American preeminence in education, the collapse of private-sector unions, the emergence of a winner-take-all information-age economy, and the return of Gilded Age-style high finance have produced an extraordinarily unequal pre-tax distribution of income, which will burden the next generation and make a mockery of equality of opportunity.
It would have been nice if the political program laid out a generation ago in Free to Choose had lived up to the Friedmans’ billing. It would have been nice if a relatively equal and prosperous society with full employment and equal opportunity had followed from a government that stood back from the economy and provided nothing but a minimal safety net, courts, and a constantly growing money supply.
Alas, that did not happen. And it did not happen because the world described by the Friedmans is not the world in which we live."
Brad DeLong: Re-Capturing the Friedmans
Crony Capitalism
Things white guys say...
Ties to Romney ’08 Helped Fuel Equity Firm - NYTimes.com:
"The Romneys’ $10 million investment in Solamere came through Ann Romney’s blind trust, which was set up when Mr. Romney became governor.
Brad Malt, a Boston lawyer who administers the trust, said he invested in Solamere without consulting Mitt Romney. Mr. Malt said he liked Solamere’s diversified approach and while he could have invested in more-established funds, his decision came down to knowing the founders. “I had confidence in their talents, integrity and intellect,” he said."
Ties to Romney ’08 Helped Fuel Equity Firm - NYTimes.com:
"The Romneys’ $10 million investment in Solamere came through Ann Romney’s blind trust, which was set up when Mr. Romney became governor.
Brad Malt, a Boston lawyer who administers the trust, said he invested in Solamere without consulting Mitt Romney. Mr. Malt said he liked Solamere’s diversified approach and while he could have invested in more-established funds, his decision came down to knowing the founders. “I had confidence in their talents, integrity and intellect,” he said."
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