Good morning.  Here is what caught my eye this Sunday reading:

Lowenstein: Are you mad about how everyone’s mean to big banks? Read this book. (New Republic)
• How Germany Reconquered Europe (Harper’s)
• China’s Treasury Holdings Climb to Record in Government Data (Bloomberg) see also What possessed a prestigious journal to name China’s the central bank of the year? (Quartz)
• Fifty Years of Smoking in Two Charts (Businessweek)
• Consistently Wrong: Bear market or bull, analysts give bad advice (Economist)
• How Isaac Newton went flat broke chasing a stock bubble (Sovereign Man)
• Extreme Weather Wreaking Havoc on Food as Farmers Suffer (Bloomberg)
• Bridge-gate Looks Almost Good Next to New Jersey’s Other Embarrassments (Daily Beast)
• VC Watch: Open Letter to 60 Minutes and CBS (Khosla Ventures)
• Nation Recalls Simpler Time When Health Care System Was Broken Beyond Repair (The Onion)

What’s for brunch?

 

Growth Is New Mantra for Investors

Source: WSJ

 

 

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.

11 Responses to “10 Sunday AM Reads”

  1. RW says:

    Analysis of sovereign CDS

    …an interesting paper from HSBC on sovereign CDS. They used cluster analysis to show that correlations in CDS spreads are less about geographic proximity and more about related risk profiles of various nations. The researchers also show how the clustering changed over time.

  2. hue says:

    Is This Thing On? Why Audio Never Goes Viral (Digg)

    The “middle class” myth: Here’s why wages are really so low today (Salon)

    How to eat a pizza: fork, hands or chopsticks.

  3. Jojo says:

    Fifty Years of Smoking in Two Charts (Businessweek)
    ————–
    What annoys me most about the tobacco and magazine industries these days is the many magazines that are again accepting full page cigarette ads, typically from Camel (remember those ubiquitous Joe Camel ads?) and American Spirit. Magazines like Wired and Popular Science, for example, which have a younger audience, I believe.

    Congress needs to get down to business and prohibit ALL tobacco advertising, from print to storefront to counter! And all tobacco products should have to be behind the store counter and out of sight.

  4. Jojo says:

    How Mad Men Lit up Lucky Strike Sales
    It’s hard to explain Lucky Strike’s smoking hot sales growth without Mad Men – and that’s not the only brand bolstered by the great Don Draper.

    January 17, 2014 | Liam Boluk

    Over the course of January, I’ll be putting out a series on the future of the film industry. The focus will be on the disastrous Summer 2013 season, where fewer than 1 in 5 blockbusters generated enough box office revenue to cover production & marketing costs (leaving the major studios down nearly $750M). One option is to increase product placement/integration: Though Man of Steel’s $668M box office fell short of expectations, nearly half of its $350M+ production & marketing spend was covered by promotional tie-ins. With that in mind, I began researching the effects of a product or brand being strongly associated with popular media and came across a startling (though unquestionably anomalic) case study: Mad Men and Lucky Strike cigarettes.

    While the claim that Mad Men could have driven a nearly 50% (representing an additional 10 billion cigarettes) increase in Lucky Strike sounds like typical advertising puffery, it’s hard to pin down another driver. Lucky Strike did launch new flavors, update packaging and launch “capsule” cigarettes in the five years since Mad Men premiered, but so too did its competitors. The only new country the brand entered was Turkey – and that wasn’t until 2011. Even if one excluded all capsule (2010- ) and “All Natural” (2011-) cigarette sales (which would have been predominantly cannibalized, rather than net new), Lucky Strike would still have grown 12% between 2007 and 2012, five times faster than the industry overall and eight times British American Tobacco (the owner of Lucky Strike). Could it really have been Don Draper?

    http://iveybusinessreview.ca/blogs/lbolukhba2010/2014/01/17/how-mad-men-lit-up-lucky-strike-sales/

  5. constantnormal says:

    The South Seas Bubble that supposedly busted Newton, left the English economy in ruins. I read somewhere (which I cannot at present locate, so treat that as hearsay at best) that they suffered a depression lasting 65 years as a result of the vaporization of large amounts of English monies.

    If that was the case, then perhaps one might understand George III’s willingness to plunder the colonies via taxation.

    And while Newton did get soundly thwacked by his inability to let a shooting star continue to rise without his participation, be did not die a pauper, but recovered handily. According to Thomas Levenson (in “Newton and the Counterfeiter”), Newton was one of the largest individual holders of East India Company stock, having 11,000 pounds sterling invested in those shares as of 1724, which was a not-insignificant sum in those days.

  6. willid3 says:

    nah the banks werent at fault. they didnt write mortgages they knew going in weren’t viable. they didnt set up warehouses where the just moved around materials (aluminum. and maybe oil?) and driving up prices to the rest of us in products we buy. nor did they make it so that when the mortgages they knew were bad, did go bad, they made money still on servicing (since they knew they had to sell them asap. and did). so while they might not have been the last straw (maybe the were most of the straw) that broke the back of the economy. we should forget about all of that. since China!!!! or jobs!!

    China will be there what ever they do.

    and they didnt really do much about job creation either

    nor did they make it so that incomes grew in the US. but they sure did make sure they got their billions. and get bailed out by the rest of us

  7. RW says:

    The notion that people are irrational but markets work to produce a rational, or at least an optimal, result seems intuitively right but the evidence for that actually seems pretty thin or at least is no better than the evidence that, in fact, people are fairly rational and markets, as we take to be the case of mob action generally, are not.

    Rational Agents: Irrational Markets

    I am going to stake out a position that Amartya Sen, in his lovely article on rational fools, ascribes to Edgeworth in his book, Mathematical Psychics: namely, that agents are rational in a narrowly defined sense. I am willing to make that assumption because, as I will argue, the financial markets would go very badly wrong most of the time even if agents were fully rational in the sense in which economists define rationality.

  8. rd says:

    The battles to avoid responsibility for paying for the Freedom Industries spill that shut donw water supply for several hundred thousand people have begun:

    http://www.businessweek.com/articles/2014-01-19/freedom-industries-chapter-11-filing-reveals-owners-strategy

    The obvious outcome for the justice system will be to blame the chemical manufacturer, Eastman Chemical, and make them pay for all of the costs as none of the other parties will be solvent or have any responsibility.

    • rd says:

      BTW – I forgot to mention that their arguments about the tank construction being the water company’s fault are most likely unadulterated, high-grade BS. It is the tank owners responsibility to design a structure properly, especially if they run it over utlities such as water lines and gas lines. A water line is generally buried deep enough to prevent it freezing – if it did freeze, they would have figured it out in short order from the multiple geisers that would have erupted from the broken line (think of the cool news footage that comes out of urban water main breaks). It is also the tank owner’s responsibility to make sure that the tank was constructed properly with appropriate bedding materials. Also, if the tank had product in it, the product itself would effectively provide insulation above the ground surface that would reduce frost front penetration. The claim basis was most likely developed by attornies and not engineers.

  9. intlacct says:

    Bove article: “He writes that “a fact you rarely see mentioned” is that taxpayers made a profit on the TARP bank bailouts and other government rescues; actually, while the final scorecard is still being tabulated, this is a point you see mentioned a lot.”

    Apparently he doesn’t understand the concept of ‘cost of capital’.

    Better yet, “OK, since the TARP loans were profitable, you are required to make loans that are just as profitable (ie you get your money back with nil cost of capital).”

  10. rd says:

    Interesting post on bubbles in Boca Raton from Josh Brown:

    http://www.thereformedbroker.com/2014/01/19/bubble-guppies/

    Could it be that the only bubbles out there are in whatever the 1% has decided are the correct assets to own to avoid bubbles? I live in Upstate NY. No evidence of bubbles here. Nobody even talks about investments or house prices. Investments are your diversified 401ks and houses are what you live in. The only concern is whether or not they will have jobs next year and whether or not there will be pay raises this year. Some more layoffs have occurred recently as companies were unable to meet their NOI growth targets with flat revenue. However, it sounds like the financial sector does not have those concerns, which probably means that they should.