economics

‘Not necessity, not desire, the love of power is the demon of men. Let them have everything, they remain unhappy.’ –Nietzsche

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{ while ordinary people are struggling, those at the top are doing just fine. Income and wealth inequality have shot up. The top 1% of Americans command nearly twice the amount of income as the bottom 50%. The situation is more equitable in Europe, though the top 1% have had a good few decades. | The Economist | full story }

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{ Netflix performance burns hedge fund short sellers }

Yes, tid. There’s where.

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Twelve years ago, my now-Bloomberg colleague Joe Weisenthal proposed that startups that planned to disrupt an established industry should short the stock of the incumbents in that industry. That way, if they were right — if they were able to undercut big established public companies — then they’d get rich as those public companies declined. […] Their profits would come from the incumbents’ shrinking.

Weisenthal’s proposal was for disruptors offering a free product; the idea was that the entire business model would consist of (1) offering a free service that public companies offer for money and (2) paying for the service by shorting the public companies. But there’s a more boring and more widely generalizable — yet still vanishingly rare — version of this approach in which it just augments the disruptors’ business model: You sell better widgets cheaper and make a profit that way, while doubling down by also shorting your competitors. It’s a more leveraged way to do the business you were going to do anyway, an extra vote of confidence in yourself.

{ Bloomberg | Continue reading }

The boots to them, them in the bar, them barmaids came

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It is often claimed that negative events carry a larger weight than positive events. Loss aversion is the manifestation of this argument in monetary outcomes. In this review, we examine early studies of the utility function of gains and losses, and in particular the original evidence for loss aversion reported by Kahneman and Tversky (Econometrica  47:263–291, 1979). We suggest that loss aversion proponents have over-interpreted these findings.

{ Psychological Research | Continue reading }

Let me have men about me that are fat

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2017 was a big year for Norway’s sovereign wealth fund, already the largest in the world. After surpassing $1 trillion in assets, the fund announced today that it made an annual return of 1,028 billion kroner ($131 billion), the largest amount in the fund’s 20-year history. […]

how many stocks this fund already owns: 1.4% of all listed stocks in the world […] its biggest boost last year came from Apple. It has a 0.9% stake in the US tech company […]

The fund has now made more money in investment returns than was put into it […] since inception in 1997

{ Quartz | Continue reading }

art { Jan van Eyck, The Arnolfini Portrait, 1434 }

Olympic gold medals contain only 1% gold — would cost $25,000 if pure

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You know, someone invented the XIV ETN. And someone invented the VIX, and VIX futures. And when you read the technical specifications for all of those things, it is clear that they are not trivial feats of engineering. Teams of marketers and traders and quants and technologists and lawyers put many hours into getting them just right, so that they would work as intended. They are technologies, highly engineered tools designed to help customers do things that they couldn’t have done before. They are financial technologies, built not out of screens and circuit boards but out of formulas and hedging strategies and legal documents, but that is what you’d expect: Financial firms ought to innovate in financial technology.

Yesterday Goldman Sachs Group Inc. Chief Executive Officer Lloyd Blankfein presented at the Credit Suisse Financial Services Conference, and his presentation is kind of a weird read. The running theme is that Goldman is doing technology stuff to win business. “Engineering underpins our growth initiatives,” says a summary page, and it doesn’t mean financial engineering. In fixed income, currencies and commodities, engineers are 25 percent of headcount, and the presentation touts growth in Marquee (its client-facing software platform) and “systematic market making.” In equities, Goldman touts its quant relationships. In consumer banking (now a thing!), the centerpiece is Marcus, Goldman’s online savings and lending platform. And in investment banking, “Engineering enhances client engagement through apps, machine learning and big data analytics.” […]

Instead of developing new financial technologies, Goldman is developing new computer technologies for its financial clients.

{ Bloomberg | Continue reading }

related { Hedge-fund mediocrity is the best magic trick. Never have so many investors paid so much for such uninspiring returns. }

lithograph { Ellsworth Kelly, Camellia III, 1964–65 }

Tee the tootal of the fluid hang the twoddle of the fuddled, O!

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Of all the criticisms aimed at fracking, charges that it might increase the incidence of STDs – specifically gonorrhea – are seldom heard.

Yet there might be a link – according to a new research paper published in the Journal of Public Health Policy. […]

We find that fracking activity is associated with a 20 per cent increase in gonorrhea.

{ Improbable | Continue reading }

The cess of majesty dies not alone

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Often, damaged works of art end up in the vaults of insurance companies. Once the owner submits a claim on the damaged piece, a team of experts, appraisers, conservators and adjusters offer specialist advice on the artwork’s condition and devaluation. The economics of selling and repairing the work are weighed up, and generally, if the cost of restoring a work is far beyond what it is worth, the work will be claimed as “total loss”. The insurance company will pay out on the policy and, in exchange, retain the broken piece. The “total loss” artwork is effectively declared worthless, unsalvageable by both insurer and owner. From then on it belongs to the insurance company as salvage.

Some of these pieces, though, end up being exhibited by the Salvage Art Institute (SAI), which calls itself a “haven” for written-off works. Conceived by Elka Krajewska, an artist in New York, in 2009 during a chance meeting with a representative of AXA Art Insurance, it took her until 2012 to jump through enough legal hoops to persuade the insurer to donate some of their total-loss works to the SAI. A selection of these works is now on show in “No Longer Art”, a show at BNKR Space, a gallery in Munich.

{ The Economist/1843 | Continue reading }

welded steel, porcelain, wire mesh, canvas, grommets, and wire { Lee Bontecou, Untitled, 1980–98 }

Dumbest movie ever with a predictable dumb plot, bad acting, worse script, straight up ridiculous

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…America’s system of government. The bureaucracy is so understaffed that it is relying on industry hacks to draft policy. They have shaped deregulation and written clauses into the tax bill that pass costs from shareholders to society.

{ Economist | Continue reading }

graphite pencil, crayon and collage on paper { Jasper Johns, Green Flag, 1956 }

To flame in you. Ardor vigor forders order.

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America’s largest city, 8.5 million strong, is taking decisive action on two separate fronts. We are demanding compensation from those who profit from climate change. And we plan to withdraw our formidable investment portfolio from an economic system that is harmful to our people, our property and the city we love and invest it in more productive ways. This week, the City of New York filed a lawsuit in federal court against the five investor-owned fossil fuel companies: Exxon, BP, ConocoPhillips, Shell and Chevron. We are seeking billions of dollars in damages from these giants because they are central actors in this crisis. We’re proud to join cities like San Francisco, Oakland and Santa Cruz in taking on Big Oil in court.

{ Bill de Blasio, Mayor of New York City | Washington Post }

latex, rope, string, and wire { Eva Hesse, no title, 1969–70 }

‘We learn from history that we do not learn from history.’ –Hegel

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total $XRP now worth $380 bn…. makes Ripple labs worth $225bn.. tenth largest company by market cap in the world… makes Chris Larsen worth $55bn tying Mark Zuckerburg as 5th richest man in the world…..

At one Point in the 1989 Japanese real estate bubble, the Imperial Palace in Japan was said to be worth more than the entire state of California, things that don’t make sense don’t last….

{ Michael Novogratz‏ | More: CNBC }

The public bitcoin transaction log shows that Satoshi Nakamoto’s known addresses contain roughly one million bitcoins. As of 17 December 2017, this is worth over 19 billion USD. This makes him the 44th richest person on earth.

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The woman, who calls herself Theodora, is a financial dominatrix, which means clients — many of whom never meet her in person — derive sexual pleasure from giving her gifts and money. Exchanges of money can range from several dollars in “tributes,” as they are called, to gifts of more than six figures. Some clients even become a “human ATM,” meaning they give her complete control over a bank account. […] Last year she made over $1 million in cryptocurrency alone.

{ MarketWatch | Continue reading | @TheOnlyTheodora }

no master how mustered, mind never mend

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Brothers Vincenzo and Giacomo Barbato named their clothing brand “Steve Jobs” in 2012 after learning that Apple had not trademarked his name. […]

The Barbatos designed a logo that resembles Apple’s own, choosing the letter “J” with a bite taken out of the side. Apple, of course, sued the two brothers for using Jobs’ name and a logo that mimics the Apple logo. In 2014, the European Union’s Intellectual Property Office ruled in favor of the Barbatos and rejected Apple’s trademark opposition. […]

While the Barbatos currently produce bags, t-shirts, jeans, and other clothing and fashion items […] they plan to produce electronic devices under the Steve Jobs brand.

{ Mac Rumors | Continue reading }

art { Left: Ellsworth Kelly, Nine Squares, 1977 | Right: Damien Hirst, Myristyl Acetate, 2005 }