Good Monday morning — here’s what’s got me  clackalacking:

• In post-crisis penalties, Morgan Stanley stands alone (Fortune)
• Nasdaq Focuses on Pivotal 2 Minutes in Trading Halt (WSJ) see also In Markets’ Tuned-Up Machinery, Stubborn Ghosts Remain (DealBook)
• Religion and Monetary Policy: Is There a Difference? (Noahpinion)
• Rapid U.S. Growth Is Missing, Not Gone Forever (Bloomberg) see also Silicon Valley can’t save America’s dying economy (MarketWatch)
• The Psychology of Bidding on The Price is Right (Psychology Today)
• What is shadow banking? (Vox) see also Banks and macroeconomic models (Interfluidity)
• No Henry, you need to get real about Yahoo. Here are the facts (Gigaom)
• Here’s what Steve Ballmer didn’t get about the tablet revolution (The Switch) see also Steve Ballmer and The Innovator’s Curse (Asymco)
• As Amazon Stretches, Seattle’s Downtown Is Reshaped (NYT)
• Roger Federer’s Open Question (WSJ) see also Federer Betrayed by Serve in Bid to Match Agassi as Champ at 32 (Bloomberg)

What are you reading?


Ballmer’s Legacy: $350 Billion In Value Subtracted
Source: Zero Hedge

Category: Financial Press

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

14 Responses to “10 Monday AM Reads”

  1. rd says:

    It turns out there is a reason to buy hedge funds – they are good at running a small-cap stock fund:

    Unfortunately, their size and lots of other pesky little things (like exorbitant fees) get in the way of this leading them to outperform the overall market.

  2. louiswi says:

    Perhaps the discussion here should be less about Ballmer and more about the board of directors at Microsoft.

  3. RW says:

    Investors are underestimating the power of the crazy …and the possibility the crazy will chose the cliff rather than continue being backed into a corner.

    Wall Street Is So Obsessed With The Taper, It’s Missing The Bigger Threat Coming Out Of Washington

    • Laocoon says:

      Amen. I worked on the Street as well as in the Fed Govt, two different worlds. Not as much of a conspiracy between the two as journalists and activists like to think there is. These worlds intersect in odd ways, sometimes with serious consequences to one’s portfolio. The motives and behavior of each are different – think of it as the MyersBriggs T’s vs the F’s writ large. One should never underestimate the power of the crazy that can erupt from this mix.

  4. RW says:

    Rethinking investment risk (ht MT)

    Financial innovation is supposed to reduce risk — in theory, at least. Yes, new financial instruments based on the housing market helped cause the financial crisis of 2008. But in the abstract, those same instruments have the potential to spread risk more evenly throughout the marketplace by making it possible to trade debt more extensively, rather than having it concentrated in a relatively few hands.

    Now a paper published by MIT economist Alp Simsek makes the case that even in theory, financial innovation does not lower portfolio risk. Instead, it raises portfolio risks by creating situations in which parties sit on opposing sides of deep disagreements about the value of certain investments.

  5. > As Amazon Stretches, Seattle’s Downtown Is Reshaped

    Here’s another side of this growth.

    “Low housing inventory, a growing population of young tech-company workers and changing attitudes about when to buy a home are all contributing to rent increases throughout the Seattle metro area.

    Soaring rents force lifestyle changes (Seattle Times)

    • TacomaHighlands says:

      Come on down to Tacoma! Plenty of great affordable housing here and mass transit to get to the city.

    • S Brennan says:

      I live less than a mile from Seattle’s North border, on the I-5 corridor. 1bdr rents here are under 1,000.00, houses can be rented for 900-1200. But all the “Kool kids” want to live next to the nightlife [partly, I assume, due to DUI enforcement on the interstate]. In Chicago, where I grew up, when an area got overpriced, people moved, elevated trains made it hard for landlords to corner the market on spots near nightlife.

      I first came to Seattle in 1975 and have lived here [on & off] since 1989.

      In the 70′s Seattle chose the [now demolished] King Dome over a countywide rail system. Now is trying to build such a system into developed areas instead of developing areas around a rail system. To build into existing development, they are using tunnels and surface routes that will cost 100′s of times what it would of cost to do in the depressed economy of 1970′s Seattle…not to mention an ever rising body count from the inevitable collisions.

      Then there was a reasonable proposal in 1997 for a monorail, while the funding model was insane [why should city residents bear all the cost] the plan was practical in that used an elevated track…in 8 years there were 5 ballot measures to kill it. Mayor Nickles & Dimes scored the death blow.

      It was unreported in Seattle, but Nickles & Dimes had served as a light rail consultant that competed with the monorail. “Light rail”, [which it surely is not, if you have ever walked under the elevated track near the airport], has never had to work under the budget constraints the monorail did.

      Long story short, high Rents are not a bug, they are a feature of a systemic failure.

  6. S Brennan says:

    “Silicon Valley can’t save America’s Bacon” may be true, but the 6 headwinds? A good sailor can use the wind to make progress, whatever the direction…let’s parse this out.

    1. Demographics: “As more and more U.S. baby boomers retire, the number of hours worked per person declines, and so does the growth in GDP per capita.” (Down goes GDP to 1.6%.)

    Yeah, but most won’t be able to retire…so there’s that…and people die when they get old, stress being one of, if not he most important factors. Already mortality numbers are increasing across stressed demographics. And the SSI fund is stuffed with T-Notes garnered from boomer wage. Short header, we lose more by tacking than maintaining our course.

    2. Stagnant educational attainment: “The U.S lags behind other advanced industrial economies in reading, math and science.” (GDP growth drops to 1.4%

    Education is not intelligence, equating the two shows a serious lack of historical knowledge. Example:

    Samuel Pierpont Langley – Boston Latin School – English High School of Boston – Harvard College, professor of mathematics at the US Naval Academy, professor of astronomy University of Pittsburgh, Secretary of the Smithsonian – a pioneer of aviation…

    …who was taken to aviation school by a couple of guys running a bicycle shop in Ohio…who’s names escape me at the moment….but everybody remembers Langley’s contribution right?

    We already produce 50% more STEM grads than we use, supply does not create demand, stop looking through the wrong end of a telescope and vision will improve. If you want more US Born STEM grads, stop depressing wages in the scientific fields by bringing in hundreds of thousands of STEM’s every year. Ask yourself, why is creating a labor market condition where Wozniak & Jobs couldn’t get work because indentured H1-B’s were flooding the market a good thing? That’s what we have now, that’s not to say Bill Gates & Mark Zuckerberg would get a chance, they would, because they’re are from wealthy backgrounds…but Wozniak & Jobs? Nope, sorry.

    3. Rising income inequality: “From 1993 to 2008, the wealthiest 1% captured 52% of inflation-adjusted income gains.” (GDP falls to 0.9%.)

    This is the symptom of the real problem [subserviance of government to society's well born], when a couple of guys running a bicycle shop in Ohio don’t have enough money to get by on, they can’t invent the aviation industry. This one ailment, untreated, will kill America, as it has all countries before..who could not cure this fatal disease.

    4. Globalization and information technology: “More and more skilled jobs in the U.S. are being automated or are shifting to low-wage countries. (Down further to 0.7% GDP.)

    Automation has been going on for 200 years and shouldn’t be grouped with recent US policy changes. But purposely exporting jobs and importing labor to weaken American workers ability to make a living is an unpunished form of betrayal far harmful than anything Manning and Snowden did. See 2 & 3 for outcome of such policies.

    5. Energy and environment: “Possible U.S. efforts to combat global warming, such as a carbon tax, act as a drag on economic growth.” (GDP reduced to 0.5%.)

    Nonsense, LFTR implemented in Apollo-like/Manhattan-Project program…good life goes on in America…and can expand across the globe. Not mentioned on this list, but it also solves a critical water shortage problem. Please make a note of it:

    6. Massive household and government debt: “Spending money on debt repayments in the U.S. reduces funds available for productive economic activity. (GDP crashes at 0.2%.)

    See growth after depression…see FDR…see doomsayers before FDR restored confidence in government, old problem…tried and true solutions.

    • dwkunkel says:

      I am always skeptical of those that extrapolate current conditions into end of the world scenarios. I’ve lived in Silicon Valley for over 35 years and continue to be amazed at how people here are constantly pushing the limits of what can be done.

      At the turn of the century many claimed that a mile/minute was as fast as anyone could go – we all know how that turned out!

  7. gman says:

    The Schilling article cites the RR 90% meme and Niall Ferguson and Glenn Hubbard?
    Surprising from a guy that I think Barry is tight with.

    Amzn will thrive. It is the ultimate tax arb game and now that it scooped up wapo it’s tax scam is safe forever. 250 mill is a steal to hold the much leverage on the politicians who might someday have thoughts of giving bricks and mortar an equal shot and make amazon pay sales tax also.