Including… – DeLong on why Keynes wrote “In the Long Run We Are All Dead” – A WSJ series on passive vs active investing. – John Cassidy on HRC’s plans to squeeze the ultra-rich. – And somewhat awkwardly on how Democrats killed their populist soul.
Including… – How Merrill Lynch sold some stocks too fast. – Want to punch Martin Shkreli in the face for a good cause? You could get a chance. – “These days, working at a big bank must feel like Stalin’s Russia, only without the warm and fuzzy feelings of happiness and security.” – Your Rosie O’Donnell stock market bubble, and Trump vs the Fed. – On presidential debates, social media, Neil Postman and Marshall McLuhan. – Roger Farmer on the liquidity trap and how to escape it. – And how another “significant source of stupidity in firms we came across was a deep faith in leadership.”
Anyone who hasn’t read the Securities and Exchange Commission’s complaint against Leon Cooperman and his hedge funds should do so ASAP, because it is a heckuva story. Here’s a quick summary of the allegations, which Cooperman and his funds categorically deny:
McKinsey & Co. has published a tome on the Death of Banks. Well, they don’t actually say the end is nigh, but they do think the ranks of global mega-banks will shrink by at least half by the time the dust has settled:
People tend to get worked up about the idea of Wall Street mining the trails of data we all leave on the internet for investment ideas. The first and most obvious reason is that privacy issues are always contentious. You’d think it’d be a windfall for hedge funds if MasterCard or Visa started selling them data on trends in customer purchases (while the card providers sell some data, hedge funds haven’t cracked that yet, as far as we know). While the information obtained in data-mining isn’t supposed to be traceable to individuals, how would a company fully scrub that of any signs of consumers’ identities?
Brexit was one of the biggest events of 2016, and has naturally triggered a fair bit of contemplation in the hedge fund industry, where money managers are now pondering the short and long term implications. Here is a selection of some of the Brexit points made in the second-quarter letters sent to investors by a batch of hedge funds. Most were sent out in July, but many of their thoughts remain very current.
Elsewhere on Friday, - ‘It took on a life of its own’: how one rogue tweet led Syrians to Germany. - Teenage hedge fund manager Jacob Wohl — nicknamed “Wohl of Wall Street” — had his first run-in with a regulator. - Why do we talk about helicopter money? - The US Treasury just declared tax war on Europe.
Imagine you lent a friend £2000 for three years at a 25 per cent yearly interest rate. That would be a nice little earner for you and, sure, it’s not a cheap loan as far your friend is concerned. But he’s not that good of a friend anyway and rent-seeking is easier than working. The first nine months pass and your friend pays up every month, right on time. But then he misses a payment. When you call his mobile, you get his answering machine and when you ask around, people shuffle their feet and mumble stuff like “I dunno maybe he’s like at the gym or something”.
As an investment strategy grows more popular, the probability of a comparison involving Marxism apparently approaches 1
Is there a Godwin’s Law equivalent for Marxism? Do we need one since the Law basically means that the longer an argument goes on the more likely we are to reach for extreme examples while in attack or in defence? So, you know, this kind of thing is already covered?
Sorry, we’re *so* late to this, but some things are too important to ignore. Here’s a snippet of wisdom from the second quarter letter of hedge fund manager Dan Loeb, sent to his Third Point investors at the end of July (ht to our FT colleague Robin Wigglesworth, who flagged it in his newsletter):
Elsewhere on Monday, - Is it too hard for cities to get denser? Featuring Walt Disney and the holdout problem. - The Japanese zoning system. - Brexit, economists and journalists, oh my. - Virtu profiled. Hasenstab profiled. - Hedge fund manager profited from death arb.
The decade-long legal war between Argentina and a bunch of US hedge funds led by Elliott Management ended in a lucrative victory for the latter earlier this year. But the potential implications continue to reverberate. Some observers – including Joe Stiglitz, the International Monetary Fund, the Vatican and the United Nations – fret that Elliott’s triumph will upset the delicate balance of sovereign debt restructuring. Here’s what the Nobel laureate told the FT earlier this year.
Lending Club released its second-quarter results yesterday. Besides the updates on repairs after its scandals earlier in the year, executives provided an insight into some broader shifts that have been bubbling under the surface for some time. Let’s start with this interesting comment from outgoing chief financial officer, Carrie Dolan, during the call with analysts (our emphasis):
Elsewhere on Wednesday, - Andrew Ross Sorkin on the (potential, and most probably just partial) return of Glass-Steagall. - How does this hedge fund manager make so much money? He haz spreasheetz. Obviously. - Also… Bridgewater, sex, fear, and video surveillance. - Musings on the implications of a higher dollar Libor.
Herbalife, the nutritional shake multi-level marketing enterprise involved in a three-year battle over the legitimacy of its business model, has agreed to change the way it does business as part of a settlement with the Federal Trade Commission announced Friday. The Los Angeles-based group also agreed to pay $200m compensation to customers to settle a complaint that it, among other things, caused substantial injury to customers through an unfair compensation scheme in which the only true way to profit was through recruitment. There was no mention of the term pyramid scheme, but keep in mind that a multi-level marketing enterprise is at heart nothing more then a product and a compensation scheme. Messy legalities about what makes one operation legitimate and the other illegitimate have shifted for the benefit of those exploited.
Elsewhere on Friday, - Possible names for EU exits for all members of the EU. We were going to make this a Brexit free zone, but we’re allowing ourselves one. - Also, ok, this one on why sense will prevail in the EU and the markets. - Hedge fund still wants its tax-avoidance profits.
This guest post is by Gudmundur Arnason, Permanent Secretary, Ministry of Finance and Economic Affairs of Iceland, in response to “Iceland’s selective default?”, another guest post, by Arturo Porzecanski. Allow me to offer a brief comment on Arturo Porzecanski’s Guest Post of June 14 (“Iceland’s selective default?”).
- Marcus Noland explains the North Korean economy
- Brad Setser explains how corporate tax policy affects the balance of payments
- Michele Wucker explains “Gray Rhinos”
- Listen - The "gray rhino" theory
- James Heckman tells us why IQ is overrated
- Mihir Desai explains the wisdom of finance — Now with transcript!
- Mihir Desai explains the Wisdom of Finance
- Can we avoid another financial crisis?
- Hirschmania, the final chapter
- The life and speeches of Sadie Alexander
- Kim Rueben on the fiscal impact of immigration
- A sit down with Adair Turner
- Stephen Kotkin explains how Stalin defined the Soviet system
- Richard Florida on geographic inequality
- Further reading
- Jeremy Adelman on Albert O Hirschman’s “Exit, Voice & Loyalty”
- Dan Drezner on the marketplace of ideas
- Robert Lustig on the science behind our addictions
- The economic impact of immigration
- Further reading
Alphachat is available on Acast, iTunes and Stitcher.