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jerryking : bubbles   67

Why further financial crises are inevitable
March 19, 2019 | Financial Times | Martin Wolf.

We learnt this month that the US Fed had decided not to raise the countercyclical capital buffer required of banks above its current level of zero, even though the US economy is at a cyclical peak. It also removed “qualitative” grades from its stress tests for American banks, though not for foreign ones. Finally, the Financial Stability Oversight Council, led by Steven Mnuchin, US Treasury secretary, removed the last insurer from its list of “too big to fail” institutions.

These decisions may not endanger the stability of the financial system. But they show that financial regulation is procyclical: it is loosened when it should be tightened and tightened when it should be loosened. We do, in fact, learn from history — and then we forget.....Regulation of banks has tightened since the financial crises of 2007-12. Capital and liquidity requirements are stricter, the “stress test” regime is quite demanding, and efforts have been made to end “too big to fail” by developing the idea of orderly “resolution” of large and complex financial institutions.....Yet complacency is unjustified. Banks remain highly leveraged institutions.....history demonstrates the procyclicality of regulation. Again and again, regulation is relaxed during a boom: indeed, the deregulation often fuels that boom. Then, when the damage has been done and disillusionment sets in, it is tightened again........We can see four reasons why this tends to happen: economic, ideological, political and merely human.

* Economic
Over time the financial system evolves. There is a tendency for risk to migrate out of the best regulated parts of the system to less well regulated parts. Even if regulators have the power and will to keep up, the financial innovation that so often accompanies this makes it hard to do so. The global financial system is complex and adaptable. It is also run by highly motivated people. It is hard for regulators to catch up with the evolution of what we now call “shadow banking”.

* Ideological
the tendency to view this complex system through a simplistic lens. The more powerful the ideology of free markets, the more the authority and power of regulators will tend to erode. Naturally, public confidence in this ideology tends to be strong in booms and weak in busts.

* Political

the financial system controls vast resources and can exert huge influence. In the 2018 US electoral cycle, finance, insurance and real estate (three intertwined sectors) were the largest contributors, covering one-seventh of the total cost. This is a superb example of Mancur Olson’s Logic of Collective Action: concentrated interests override the general one. This is much less true in times of crisis, when the public is enraged and wants to punish bankers. But it is true, again, in normal times.

Borderline or even blatant corruption also emerges: politicians may even demand a share in the wealth created in booms. Since politicians ultimately control regulators, the consequences for the latter, even if they are honest and diligent, are evident.

A significant aspect of the politics is closely linked to regulatory arbitrage: international competition. One jurisdiction tries to attract financial business via “light-touch” regulation; others then follow. This is frequently because their own financiers and financial centres complain bitterly. It is hard to resist the argument that foreigners are cheating.

* Human
There is a human tendency to dismiss long-ago events as irrelevant, to believe This Time is Different and ignore what is not under one’s nose. Much of this can be summarised as “disaster myopia”. The public gives irresponsible policymakers the benefit of the doubt and enjoys the boom. Over time, regulation degrades, as the forces against it strengthen and those in its favour corrode.

The cumulative effect of these efforts is quite clear: regulations erode and that erosion will be exported. This has happened before and will do so again. This time, too, is not different.
boom-to-bust  bubbles  collective_action  complacency  corruption  disaster_myopia  entrenched_interests  economic_downturn  financiers  financial_crises  financial_regulation  financial_system  historical_amnesia  Mancur_Olson  Martin_Wolf  policymakers  politicians  politics  procyclicality  regulatory_arbitrage  regulation  regulators  stress-tests  This_Time_is_Different  U.S._Federal_Reserve 
march 2019 by jerryking
Opinion | When the Bubble Bursts, Consider the Anti-Bubble - The New York Times
By Ruchir Sharma
Mr. Sharma, the author of “The Rise and Fall of Nations: Forces of Change in the Post-Crisis World,” is a contributing opinion writer.

Dec. 29, 2018
bubbles 
january 2019 by jerryking
Passive investing is storing up trouble
August 2, 2018 | Financial Times | by Megan Greene.

I was recently informed by the owner of an artificial intelligence fund that markets do not listen to economists any more. .....A fundamental shift in market structure towards rules-based, passive investing over the past decade means a lot of trading is no longer based on fundamentals. But just because some markets do not pay attention to economists, it does not mean economists should not pay attention to these markets........AI quant funds are not waiting on tenterhooks for analysis of every non-farm payrolls report, Fed press conference, Donald Trump tweet, or earnings report. Instead, they look for trading strategies that are succeeding and adopt those strategies until a better one comes along, regardless of the underlying fundamentals. But what happens when the strategy suddenly becomes to sell everything? Will the computers find the buyers they need?.......ETFs, often set up to mimic an index, have to buy more of equities rising in price, sending those stock prices even higher. ETFs similarly ignore fundamentals.....This creates a piling-on effect as funds buy more of these increasingly expensive stocks and less of the cheaper ones in their indices...Risks of a bubble arise when there is no regard for underlying fundamentals or price. It is reasonable to assume a sustained market correction would lead to stocks that were disproportionately bought because of ETFs and index funds being disproportionately sold.

But again, in a crisis will the ETF managers find liquid markets? ....Passive investors and quant funds could also threaten the economy by making markets vastly more complex, noisy and opaque. They send mixed signals to active investors about what the fair value of a stock is. That could cause a significant misallocation of capital.

The danger is exacerbated by the speed at which trading is now done. The average holding period for a security on the New York Stock Exchange has fallen from two months in 2008 to just under 20 seconds today.......Systemic failures, misallocation of capital and dried up liquidity could cause a bear market, dragging on growth when the economic backdrop is already lacklustre......So even though passive investors ignore economists, economists should pay attention to risks posed by the shift in market structure they represent....This is not to say that index funds, ETFs and AI quant funds are necessarily bad. But the real test will come when there is a sudden crisis followed by a sustained bear market.
active_investing  artificial_intelligence  bear_markets  economists  ETFs  holding_periods  index_funds  investing  liquidity  misallocations  NYSE  passive_investing  piling_on  risks  systemic_failures  rules-based  bubbles  quantitative  market_fundamentals  crisis  dark_side  pay_attention 
august 2018 by jerryking
Boom amid the bust: 10 years in a turbulent art market | Financial Times
July 27, 2018 | FT| by Georgina Adam.
September 15 2008, the date of Lehman Brothers' bankruptcy filing, was also the first day of a spectacular gamble by artist Damien Hirst, who consigned 223 new works to Sotheby’s, bypassing his powerful dealers and saving millions by cutting out their commissions........The two-day London auction raised a (stunning) total of £111m.......o the outside world, though, the Hirst auction seemed to indicate that despite the global financial turmoil, the market for high-end art was bulletproof....in the wake of the Hirst sale, the art market took a severe dive.... sales plunging about 41% by 2009, compared with a market peak of almost $66bn in 2007. Contemporary art was particularly badly hit, with sales in that category plunging almost 60 % over 2008-09. Yet to the surprise, even astonishment, of some observers, the art market soon started a rapid return to rude health...the make-up of the market has changed. The mid-level — works selling between $50,000 and $1m — has been sluggish, and a large number of medium-sized and smaller galleries have been shuttered in the past two years. However, the high-performing top end has exploded, fuelled by billionaires duelling to acquire trophy works by a few “brand name” artists....A major influence on the market has been Asia....What has changed in the past 10 yrs. is what Chinese collectors are buying. Initially Chinese works of art — scroll paintings, furniture, ceramics — represented the bulk of the market. However, there has been a rapid and sudden shift to international modern and contemporary art, as shown by Liu and other buyers, who have snapped up works by Van Gogh, Monet and Picasso — recognisable “brand names” that auction houses have been assiduously promoting......Further fuelling the high end has been the phenomenon of private museums, the playthings of billionaires....In the past decade and even more so in the past five years, a major stimulus, mainly for the high end, has been the financialization of the market. Investment in art and art-secured lending are now big business....In addition, a new layer of complexity is added with “fractional ownership” — currently touted by a multitude of online start-ups. Often using their own cryptocurrencies, companies such as Maecenas, Feral Horses, Fimart or Tend Swiss offer the small investor the chance to buy a small part of an expensive work of art, and trade in it.....A final aspect of the changes in the market in the past decade, and in my opinion a very significant one, is the blurring of the art, luxury goods and entertainment sectors — and this brings us right back to Damien Hirst....Commissions are probably also lucrative. E.g. a Hirst-designed bar called Unknown was unveiled recently in Las Vegas’s Palms Casino Resort. It is dominated by a shark chopped into three and displayed in formaldehyde tanks, and surrounded by Hirst’s signature spot paintings. Elsewhere, Hirst’s huge Sun Disc sculpture, bought from the Venice show, is displayed in the High Limit Gaming Lounge. ...So Hirst neatly bookends the decade, whether you consider him an artist — or a purveyor of entertainment and luxury goods.
art  artists  art_finance  art_market  auctions  boom-to-bust  bubbles  contemporary_art  crypto-currencies  Christie's  Damien_Hirst  dealerships  entertainment  fees_&_commissions  fractional_ownership  high-end  luxury  moguls  museums  paintings  Sotheby's  tokenization  top-tier  trophy_assets  turbulence 
july 2018 by jerryking
Navigating a Breathtaking Level of Global Economic Change
November 14, 2017 |The New York Times | by Andrew Ross Sorkin.
you’d think that any sense of “faith” in the global economy might be shaken, or at least, uncertain given events like North Korea, Russian interference in elections in the United States, post-Brexit Europe, and hurricane damage.

Not so.

In conversation after conversation with some of the nation’s top business leaders and chief executives last week, there is a stunning amount of genuine “confidence” in our economy here and, yes, even globally.

“I’m very surprised,” Laurence D. Fink, the founder of BlackRock, the largest money manager in the world overseeing some $6 trillion, said at The New York Times DealBook conference last Thursday, describing his new sense of optimism.......Mark Cuban, whose disdain for President Trump is so acute that he is considering running for president himself in 2020 as a Republican because it “means you get to go head-on with Trump right in the primaries — and so there’s nothing I’d have more fun doing.” Still, though, he said he believes the economy is in good enough shape that when it comes to investing in the stock market, “I just, you know, I just let it ride.”

Mr. Cuban, owner of the Dallas Mavericks, said he keeps a small amount of cash on hand as a precaution. “I keep a little bit, you know, as a hedge. I call it my ‘Trump hedge’ because you just never know.....Earlier in 2017, The Conference Board reported that chief executives’ confidence had reached 2008 pre-recession highs in the first quarter.....there are pockets of the economy that are causing anxiety. “The last two or three years have not been fun whatsoever,” Mickey Drexler, the chairman of J. Crew, said at the conference about the traditional retail business, which has been upended by Amazon and changes in consumer behavior. “It’s been miserable.” Those challenges are extending to mall owners and commercial real estate, too..... is the stock market a proxy for the economy of America?....“In the aftermath of corporate and public-sector disasters, it often emerges that participants fell prey to a collective form of willful blindness and overconfidence: mounting warning signals were systematically cast aside or met with denial, evidence avoided or selectively reinterpreted, dissenters shunned,” Roland Bénabou a professor at Princeton University wrote in a seminal work on confidence and groupthink. “Market bubbles and manias exhibit the same pattern of investors acting ’colorblind in a sea of red flags,’ followed by a crash.”
confidence  Andrew_Sorkin  Mark_Cuban  Laurence_Fink  BlackRock  shifting_tastes  optimism  consumer_behavior  CEOs  J._Crew  Mickey_Drexler  commercial_real_estate  shopping_malls  warning_signs  groupthink  bubbles  overconfidence  precaution  global_economy  willful_blindness  manias  market_crash 
november 2017 by jerryking
After 20 Years of Financial Turmoil, a Columnist’s Last Shot - The New York Times
By GRETCHEN MORGENSON NOV. 10, 2017

For the past 20 years or so, as a business columnist for The New York Times, I’ve had a front-row seat for bull and bear markets, scandals, crises and management mischief.

But I am leaving The Times, and this is my last shot at Fair Game. So it seems a fitting moment to look back at what’s changed and what hasn’t in the financial world, for better or worse.

In addition to a string of garden-variety banking and business scandals, four seismic financial events occurred during my time as a columnist: the collapse of the Long-Term Capital Management hedge fund in 1998, the bursting of the dot-com bubble in 2000, the accounting scandals of Enron in 2001 and WorldCom in 2002, and the mother of them all — the mortgage debacle — in 2008. That one brought world economies to the precipice and wiped out Lehman Brothers and a raft of troubled banks.

......“Sarbanes-Oxley came into effect 15 years ago, and there have been fewer accounting scandals and more accountability,”...It’s too bad that the mortgage crisis six years later didn’t result in heightened accountability.

Here’s another sign of progress: Believe it or not, corporate directors are more active in their oversight than they used to be. Egregious board practices and chummy appointments are less common......Something else that hasn’t changed over the decades is analyst and investor reliance on companies’ creative earnings calculations. These figures, which do not conform to generally accepted accounting practices, typically exclude costs that companies incur in their operations.....Inventive earnings calculations, while more prevalent today, were very popular in the lead-up to the dot-com crash. Back then, analysts valued companies based on imaginative, nonfinancial metrics like the number of page views a retail website received or the percentage of “engaged shoppers” visiting a site. ....My search for truths on Wall Street and elsewhere over the years has sometimes raised hackles. That’s to the good. It wasn’t my job to be part of a company’s spin machine.
financial_communications  farewells  NYT  women  retrospectives  Wall_Street  seismic_shifts  LTCM  bubbles  scandals  SOX  truth-telling  boards_&_directors_&_governance 
november 2017 by jerryking
Silicon Valley’s Undertaker: ‘We’re Anticipating a Major Fallout’ - PE Hub
August 10, 2011 By Connie Loizos.

The Sherwood team of seasoned business professionals provides founders, shareholders and senior executives with more than a report – we at Sherwood go beyond traditional tactics to help make decisions and implement plans that achieve exceptional results.
Silicon_Valley  professional_service_firms  restructurings  bubbles  start_ups  founders  management_consulting 
november 2016 by jerryking
Yes, It's a Tech Bubble. Here's What You Need to Know
SEPTEMBER 2015 ISSUE | | Inc.com | BY JEFF BERCOVICI.

"Investors change priorities. Soon, they may be telling you, 'We want to see profitability at the expense of growth.' So you need to think about the levers you can pull to make that happen." (JCK- How does redirect from a growth mindset and plans to one of profitability?--Scott Kupor)

First, there will be some upside. Sky-high home and office rents in certain cities and neighborhoods will drop, and if you're not in the market yet, you'll have a great buying opportunity. If you're hiring, the drum-tight talent market for anyone with programming skills should loosen up considerably, although big companies may reap the benefits more than small ones, says Oliver Ryan, founder of the tech recruiting firm Lab 8 Ventures. "The 'war' for engineering talent is primarily a supply-and-demand issue, so a widespread pullback of venture capital would likely diminish demand to a point," he says.......a burst bubble could also create new types of adversity. ....suppliers and distribution partners may disappear, your business notwithstanding......money is time, and the best way to ride out a downturn is with a couple of years' worth of cash stashed in your mattress. Just be sure you're prepared to deliver a couple of extra years' worth of growth, because you'll need to if you follow the raise-more-than-you-need plan. "It's not without risk," .... "You'll have to make the numbers to justify your valuation at some point, so you're raising the hurdle on yourself."......To make it over the chasm, you have to show investors traction and momentum--a PowerPoint slide with a line pointing up and to the right. A startup can often manufacture these things by spending enough on advertising and customer acquisition. But the attributes so richly rewarded in the current environment aren't necessarily the same ones that will be selected for once the bubble bursts......In October 2008, Doug Leone of Sequoia Capital gave a famous presentation titled "R.I.P. Good Times," in which he counseled entrepreneurs to squirrel away their nuts for winter and "spend every dollar as if it was your last." In hindsight Leone's forecast, and his warning was seen as alarmist......be more careful about the terms on which you raise money as that "extreme end of a cycle" approaches. Typically, you'll seek the highest possible valuation: (a) It minimizes dilution and generates publicity that attracts talent and clients and even more capital. But as valuations settle--and the inevitable rise of interest rates all but guarantees they will--founders who overreached will struggle to support, or defend, those valuations. In the worst instances, if you finagled an extra 10 or 20 % of paper value by granting investors aggressive downside protections--the "features" and "ratchets" that VCs use to make reckless bets without incurring real risk--you'll find yourself downgraded from owner to employee. "
boom-to-bust  bubbles  downside  economic_downturn  founders  growth  investors  mindsets  overreach  profitability  priorities  Sequoia  start_ups  Silicon_Valley  silver_linings  upside  vc  venture_capital  war_for_talent 
october 2016 by jerryking
Many casualties in aftermath of bursting bubbles - FT.com
November 12, 2009 | FT | from Mr Edward Chancellor.

Prof Mishkin classifies the technology bubble as a mere case of irrational exuberance. He claims that its collapse posed no systemic risk. If that were the case, then why did the failure of WorldCom and Enron in 2002 drive his former colleague at the Federal Reserve, Ben Bernanke, to worry publicly about a “deflation” threat? And if the US economy was in such a robust state, why did the Fed keep interest rates so low for so long, thereby creating a real estate bubble?
A legacy of excessive debt is only one of the problems posed by bubbles. They contribute to the misallocation of resources – too much fibre optic cable or too many McMansions – which acts as a drag on economic growth. Asset price inflation also redistributes wealth in an arbitrary way between winners and losers. Bursting bubbles damage both corporate and household balance sheets, creating many innocent victims as people lose their jobs or suffer depleted savings.
bubbles  U.S._Federal_Reserve  debt  casualties  letters_to_the_editor  technology  asset_values  Benjamin_Bernanke  arbitrariness 
october 2016 by jerryking
Venture Capitalist Bill Gurley Warns of Dumb Money - WSJ
By ROLFE WINKLER
Oct. 25, 2016

Unsophisticated investors continue to pour money into Silicon Valley startups.....fueling companies with weak business models and preventing a big downturn......new investors flooding startups with money in recent years, arguing that the rising valuations and aggressive spending by startups are caustic for Silicon Valley [Tom Friedman would argue that dumb money sloshing in "blocks signals" that otherwise would lead to a housecleaning, firings, and a re-deployment of capital] .......new money is not as educated as the previous money, so even though some lessons are being learned,” the “corrective mechanism” that should go into action following big startup failures hasn’t kicked into gear....At the same time.....risks remain in the financial system. Because global interest rates have been so low for so long, investors are seeing “asset bubbles” appear in many places, including real estate.....there's been an increase in “bankruptcies, layoffs...shutdowns,” but you haven’t had the kind of “wholesale” decline that happened in 2001 that “scared everyone out of the water.”
venture_capital  vc  Silicon_Valley  failure  liquidity  bubbles  course_correction  start_ups 
october 2016 by jerryking
This Tech Bubble Is Bursting - WSJ
May 2, 2016 | WSJ | By CHRISTOPHER MIMS

ALEJANDRO AGHAYAN May 3, 2016
It's essentially impossible to compute the intrinsic value of a company in a zero percent interest environment.
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start_ups  valuations  bubbles  Silicon_Valley  technology  software  intrinsic_value  Christopher_Mims 
july 2016 by jerryking
Why tech booms are good but do not last - FT.com
INSIDE BUSINESS September 3, 2015 6:14 pm
Why tech booms are good but do not last
Richard Waters
Silicon_Valley  bubbles  Sequoia  Andreessen_Horowitz  Richard_Waters 
september 2015 by jerryking
The Dangers and Opportunities in a Crisis
October 7, 2012 | NYTimes.com | By HUGO DIXON, Hugo Dixon is the founder and editor of Reuters Breakingviews.

Wherever one turns — politics, business, medicine, ecology, psychology, virtually every field of human activity — people talk about crises. But what are they, how do they develop and what can people do to change their course?

The first thing to say is that a crisis is not just a bad situation. When the word is used that way, it is devalued. The etymology is from the ancient Greek: krisis, or judgment. The Greek Orthodox Church uses the term when it talks about the Final Judgment — when sinners go to hell, but the virtuous end up in heaven. The Chinese have a similar concept: The characters for crisis combine parts of those for danger and opportunity.

A crisis is a point when people have to make rapid choices under extreme pressure, normally after something unhealthy has been exposed in a system. To use two other Greek words, one path can lead to chaos; another to catharsis or purification.

A crisis is certainly a test of character. It can be scary. Think of wars; environmental collapses that destroy civilizations of the sort charted in Jared Diamond’s book “Collapse: How Societies Choose to Fail or Succeed”; mass unemployment; or individual depression that leads to suicide.

But the outcome can also be beneficial. This applies whether one is managing the aftermath of the Lehman Brothers bankruptcy, the current euro crisis, the destruction of an oil rig in the Gulf of Mexico or an individual’s midlife crisis. Much depends on how the protagonists act.

Students of crises are fond of dividing them into phases. For example, Charles Kindleberger’s “Manias, Panics, and Crashes: A History of Financial Crises” identifies five phases of a financial crisis: an exogenous, normally positive, shock to the system; a bubble in which people exaggerate the benefits of that shock; distress when some investors realize that the game cannot last; the crash; and finally a depression.

Although there is much to commend in Mr. Kindleberger’s system, it is too rigid to account for all crises in all fields. It also downplays the possibility that decision makers can change the course of a crisis. A more flexible scheme that leaves space for human agency to affect how events turn out has just two phases: the bubble and the crash......The bubble is typically characterized by mania and denial. Things are going well — or, at least, appear to be. Feedback loops end up magnifying confidence...............Manic individuals do not know their limitations and end up taking excessive risks — whether on a personal level or in managing an organization or an entire economy. As the ancient Greeks said, hubris comes before nemesis........But before that, there is denial. People do not wish to recognize that there is a fundamental sickness in a system, especially when they are doing so well........The ethical imperative in this phase is to burst the bubble before it gets too big. That, in turn, means both being able to spot a bubble and having the courage to stop the party before it gets out of hand. Neither is easy. It is hard to recognize a sickness, given that there is usually some ideology that explains away the mania as a new normal. The few naysayers can be ridiculed by those who benefit from the continuation of the status quo.

What is more, politicians, business leaders and investors rarely have long-term horizons. So even if they have an inkling that things are not sustainable, they may still have an incentive to prolong the bubble.......The crash, by contrast, is characterized by panic and scapegoating. People fear that the system could collapse. Negative feedback loops are in operation: The loss of confidence breeds further losses in confidence. This is apparent on an individual level as much as on a macro one.

..Events move extremely fast, and decisions have to be made rapidly........The key challenge is to make effective decisions that avoid vicious spirals while not embracing short-term fixes that fail to address the fundamental issues. With the euro crisis, for example, it is important to improve competitiveness with structural reforms and not just rely on liquidity injections from the European Central Bank.

In this phase, no one denies that there is a problem. But there is often no agreement over what has gone wrong. Protagonists are reluctant to accept their share of the responsibility but instead seek to blame others. Such scapegoating, though, prevents people from reforming a system fundamentally so that similar crises do not recur......Crises will always be a feature of life. The best that humanity can do is to make sure it does not repeat the same ones. And the main way to evolve — both during a bubble and after a crash — is to strive to be honest about what is sick in a system. That way, crises will not go to waste.
blaming_fingerpointing  books  bubbles  clarity  crisis  dangers  decision_making  economic_downturn  Jared_Diamond  market_crash  opportunities  risks  scapegoating  societal_choices 
february 2015 by jerryking
Peter Thiel on Why Big Companies Don’t Think Like Startups - WSJ - WSJ
November 3, 2014 | WSJ | Interview of Peter Thiel by Mr. Dennis K. Berman.

Changing the World
MR. BERMAN: The term you use in your book is that a startup is an excuse to change the world. How do people inside big companies take that idea and make something of it? MR. THIEL: There are a number of larger companies that are still innovating fairly aggressively. I’m very biased, as an investor, to be pro-companies that are still led by the founders. The founders are often able to make more choices and take more risk and have more inspiration than more politically minded CEOs. The old founders don’t always live forever, that’s true. You need a figure that’s as close to a founder as possible.

In theory, large companies could do far more than small companies. They have more capital. They have longer time horizons. They can take more risks. I tend to think it’s always that the internal politics somehow get in the way.
bubbles  founders  internal_politics  large_companies  office_politics  Peter_Thiel  risk-taking  Silicon_Valley  start_ups  time_horizons  valuations  vc  venture_capital 
november 2014 by jerryking
For Brazil’s sex workers, a World Cup brothel boom turns to bust - The Globe and Mail
STEPHANIE NOLEN
RIO DE JANEIRO — The Globe and Mail
Published Tuesday, Jul. 15 2014,
tourism  Brazil  FIFA  prostitution  bubbles 
july 2014 by jerryking
The Biology of Risk - NYTimes.com
By JOHN COATES JUNE 7, 2014

What is it about risk taking that so eludes our understanding, and our control?

Part of the problem is that we tend to view financial risk taking as a purely intellectual activity. But this view is incomplete. Risk is more than an intellectual puzzle — it is a profoundly physical experience, and it involves your body...Risk by its very nature threatens to hurt you, so when confronted by it your body and brain, under the influence of the stress response, unite as a single functioning unit....The state of your body predicts your appetite for financial risk just as it predicts an athlete’s performance.

If we understand how a person’s body influences risk taking, we can learn how to better manage risk takers. We can also recognize that mistakes governments have made have contributed to excessive risk taking.

Consider the most important risk manager of them all — the Federal Reserve. ...Uncertainty over the timing of something unpleasant often causes a greater challenge response than the unpleasant thing itself. Sometimes it is more stressful not knowing when or if you are going to be fired than actually being fired. Why? Because the challenge response, like any good defense mechanism, anticipates; it is a metabolic preparation for the unknown....Most models in economics and finance assume that risk preferences are a stable trait, much like your height. But this assumption, as our studies suggest, is misleading. Humans are designed with shifting risk preferences. They are an integral part of our response to stress, or challenge....One such opportunity is a brief spike in market volatility, for this presents a chance to make money. But if volatility rises for a long period, the prolonged uncertainty leads us to subconsciously conclude that we no longer understand what is happening and then cortisol scales back our risk taking. In this way our risk taking calibrates to the amount of uncertainty and threat in the environment.

Continue reading the main story
Under conditions of extreme volatility, such as a crisis, traders, investors and indeed whole companies can freeze up in risk aversion, and this helps push a bear market into a crash. Unfortunately, this risk aversion occurs at just the wrong time, for these crises are precisely when markets offer the most attractive opportunities, and when the economy most needs people to take risks. The real challenge for Wall Street, I now believe, is not so much fear and greed as it is these silent and large shifts in risk appetite....As uncertainty in fed funds declined, one of the most powerful brakes on excessive risk taking in stocks was released....There are times when the Fed does need to calm the markets. After the credit crisis, it did just that. But when the economy and market are strong, as they were during the dot-com and housing bubbles, what, pray tell, is the point of calming the markets? Of raising rates in a predictable fashion? If you think the markets are complacent, then unnerve them. Over the past 20 years the Fed may have perfected the art of reassuring the markets, but it has lost the power to scare. And that means stock markets more easily overshoot, and then collapse.

CONTINUE READING THE MAIN STORY
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COMMENTS
The Fed could dampen this cycle. It has, in interest rate policy, not one tool but two: the level of rates and the uncertainty of rates. Given the sensitivity of risk preferences to uncertainty, the Fed could use policy uncertainty and a higher volatility of funds to selectively target risk taking in the financial community....IT may seem counterintuitive to use uncertainty to quell volatility. But a small amount of uncertainty surrounding short-term interest rates may act much like a vaccine immunizing the stock market against bubbles. More generally, if we view humans as embodied brains instead of disembodied minds, we can see that the risk-taking pathologies found in traders also lead chief executives, trial lawyers, oil executives and others to swing from excessive and ill-conceived risks to petrified risk aversion. It will also teach us to manage these risk takers, much as sport physiologists manage athletes, to stabilize their risk taking and to lower stress.
Wall_Street  risks  risk-management  risk-taking  uncertainty  U.S._Federal_Reserve  bubbles  volatility  behavioural_economics  risk-preferences  risk-aversion  biology  psychology  interest_rates  emotions  human_experience  human_behavior  human_frailties  human_psyche  financial_risk  signaling  stress_response  market_crash  immobilize  paralyze  bear_markets  policy_tools  physiological_response  risk-appetite  unpredictability  physical_experiences  calibration 
june 2014 by jerryking
Tech startups: A Cambrian moment | The Economist
Jan 18th 2014

the world of startups today offers a preview of how large swathes of the economy will be organised tomorrow. The prevailing model will be platforms with small, innovative firms operating on top of them. This pattern is already emerging in such sectors as banking, telecommunications, electricity and even government. As Archimedes, the leading scientist of classical antiquity, once said: “Give me a place to stand on, and I will move the Earth.”....yet another dotcom bubble that is bound to pop. Indeed, the number of pure software startups may have peaked already.... warns Mr Andreessen, who as co-founder of Netscape saw the bubble from close by: “When things popped last time it took ten years to reset the psychology.” And even without another internet bust, more than 90% of startups will crash and burn.

But this time is also different, in an important way.

the basic building blocks for digital services and products—the “technologies of startup production”,...Some of these building blocks are snippets of code that can be copied free from the internet, along with easy-to-learn programming frameworks (such as Ruby on Rails). Others are services for finding developers (eLance, oDesk), sharing code (GitHub) and testing usability (UserTesting.com). Yet others are “application programming interfaces” (APIs), digital plugs that are multiplying rapidly....Startups are best thought of as experiments on top of such platforms, testing what can be automated in business and other walks of life. Some will work out, many will not. Hal Varian, Google’s chief economist, calls this “combinatorial innovation”. In a way, these startups are doing what humans have always done: apply known techniques to new problems. The late Claude Lévi-Strauss, a French anthropologist, described the process as bricolage (tinkering)..... software (which is at the heart of these startups) is eating away at the structures established in the analogue age....this special report will explain how start-ups operate, how they are nurtured in accelerators and other such organisations, how they are financed and how they collaborate with others. It is a story of technological change creating a set of new institutions which governments around the world are increasingly supporting.
anthropologists  Archimedes  bubbles  Cambrian_explosion  dotcom  entrepreneurship  Greek  Hal_Varian  innovation  innovation_policies  Marc_Andreessen  millennials  platforms  software_is_eating_the_world  start_ups  taxonomy  technological_change  urban 
february 2014 by jerryking
Beware the Tech Bubble—But Stay Calm - WSJ.com
By Farhad Manjoo

Dec. 29, 2013

two-step guide for reaping the best from tech while staving off the next bout of irrational exuberance. Think of it as my year-end gift to you, a clip-and-save guide for preventing a new tech bubble.

Step 1: Worry. If you're an investor, employee, founder, tech journalist or in some other way connected to the tech business, worrying about the bubble is your best defense against the bubble. Worrying keeps you sharp. Worrying keeps magical thinking at bay. As in the 1990s, the tech industry is pushing grand, society-transforming novelties on the rest of the world. If you're not worried that some of these claims are crazy, you're not paying attention.

Step 2: Don't panic. Don't let your anxiety become all-consuming. If you study the last dot-com boom, you'll see profound differences between what happened then and what's happening now. Unlike in the 1990s, today's public markets have yet to fully buy in to the boom; it's difficult to take a tech company public, and a newly public company can expect to be judged harshly by the press and investors if it shows any sign of weakness. This factor—the stock market's demand for results—is an enormous difference from the last boom. And it is reason enough to hold off on any panic.

Now, I know that my plan—worry, but don't panic—sounds like a glib, easy way to deal with tech's rise. As a columnist, I strive for firmer, less squishy opinions. I want to say, "Hey, keep partying, there's no bubble!" or "Everyone hide, doom awaits, the end is nigh!"

But unfortunately, the truth is more nuanced and complicated. People with an interest in tech should be on guard against the bubble at the same time they are open to the transformative powers of tech.
Silicon_Valley  technology  bubbles  IPOs  skepticism  paranoia  happy_talk  Farhad_Manjoo  keep_calm  wishful_thinking  worrying  panics  tech-utopianism  pay_attention 
december 2013 by jerryking
Lunch with the FT: Peter Thiel - FT.com
December 20, 2013 4:06 pm
Lunch with the FT: Peter Thiel

By Richard Waters

Venture capital, where success depends on picking winners in the next hot tech markets and sticking with them, seems a long way from riding booms and busts as a hedge fund manager. In Thiel’s world, however, all things are connected, as he stitches ideas together into a grand unifying theory of our times.

The pieces fit together something like this. The historically anomalous bubbles of recent years – Japan’s stock market boom of the 1980s, the dotcom mania of the 1990s, the housing finance frenzy of the past decade and, now, the government bubble – all resulted from the fact that people retained outsized expectations for the future, even as reality came up short.
"Twitter may not be enough to take civilisation to the next level"

The reason for this expectation gap, Thiel argues, is that technological progress came to a halt at the end of the 1960s. As the website of Founders Fund declares: “We wanted flying cars, instead we got 140 characters.” Thiel is still making it up to Twitter for this jab: it’s a perfectly fine company, he says, and may even be worth the high valuation placed on it by Wall Street, though he adds with deadpan irony that “it may not be enough to take civilisation to the next level”
anomalies  boom-to-bust  bubbles  dotcom  expectations  Founders_Fund  libertarians  Palantir  Peter_Thiel  Richard_Waters  Silicon_Valley  Twitter  vc  venture_capital 
december 2013 by jerryking
The Francis Bacon indicator? Art world soaks up excess cash
Nov. 19 2013 | The Globe and Mail The Globe and Mail | BRIAN MILNER.

Investors, collectors and dealers forked out nearly $1.2-billion (U.S.) last week – far above industry expectations – for a handful of illustrious names at the fall contemporary art auctions in New York. ...Art market experts, just like their counterparts in commodities, real estate, stocks and bonds, insist this is no bubble: The market is healthy, demand is growing and supply is limited....But the rich are eagerly parting with their money for art for a variety of personal and financial reasons. As a rising asset in a low-interest rate world, it’s viewed as a potential hedge against future financial storms. After all, demand remained relatively stable in the aftermath of the Great Meltdown. Also, owning a famous piece of art offers a heck of a lot more prestige than buying another commercial property. And it’s a lot cheaper than trying to compete with the Russian oligarchs (who are also big art buyers) for sports franchises.
art  bubbles  collectors  auctions  high_net_worth  contemporary_art  Francis_Bacon  prestige  hedging  low-interest  art_finance  alternative_investments  art_market 
november 2013 by jerryking
Toronto café and coffee-shop boom about to go bust?
Feb 22, 2012 | The Grid |BY: David Sax
Since 2008, an estimated 100 new independent cafés have opened in downtown Toronto, offering premium espressos at premium prices—usually within bean-throwing distance of five or six other coffee shops. How the hell do they all stay in business?
coffee  Toronto  profitability  high-quality  Independents  cafés  David_Sax  bubbles 
may 2013 by jerryking
Big Data Is Great, but Don’t Forget Intuition
December 29, 2012 | NYTimes.com |By STEVE LOHR.

A major part of managing Big Data projects is asking the right questions: How do you define the problem? What data do you need? Where does it come from? What are the assumptions behind the model that the data is fed into? How is the model different from reality?...recognize the limits and shortcomings of the Big Data technology that they are building. Listening to the data is important, they say, but so is experience and intuition. After all, what is intuition at its best but large amounts of data of all kinds filtered through a human brain rather than a math model?
Andrew_McAfee  asking_the_right_questions  bubbles  conferences  critical_thinking  data_scientists  Erik_Brynjolfsson  failure  hedge_funds  human_brains  information-literate  information-savvy  intuition  massive_data_sets  MIT  models  problems  problem_awareness  problem_definition  problem_framing  questions  skepticism  Steve_Lohr  Wall_Street 
january 2013 by jerryking
Ride to the rescue of workers
Aug. 15 2007 | The Globe and Mail | JIM STANFORD. Economist with the Canadian Auto Workers Union

So imagine how surprised I was at the bank's rapid, powerful interventions into financial markets recently, issuing more than $4-billion in new low-cost loans in just three trading days to soothe frazzled nerves and keep the easy-credit machine out of the ditch. And it signalled in no uncertain terms there was plenty more where that came from.

Far from sitting back watching the economy "adjust to change," this drama featured the central bank as cavalry - charging over the hill just as the hedge-fund artists were making their last stand. Seems the prospect of bankrupt speculators tossed onto the street, forced to find real work, isn't the kind of change the bank has in mind. Now, don't get me wrong: What the bank did was prudent and important....This selective, one-sided approach to stabilization speaks volumes about the nature of the bank as an institution, and the biases of the inflation-targeting regime it espouses so passionately. The Bank of Canada is not a neutral, prescient team of technocrats, guiding us to some imaginary point of maximum efficiency. Like any other political body, its opinions and actions reflect value judgments about the relative importance of differing, sometimes conflicting, goals and interests. Job creation versus inflation control. Consumer inflation versus stock-market inflation. Financial troubles versus industrial troubles.

So, Governor Dodge, please carry on with your dramatic rescue mission. Just spread a little of that rescue around to the rest of us next time.
Jim_Stanford  economists  layoffs  manufacturers  bubbles  Bank_of_Canada  CAW  central_banks  biases  values  tradeoffs  financial_markets  politics  institutions  value_judgements  pairs 
june 2012 by jerryking
The professional-class bubble is bursting - The Globe and Mail
Margaret Wente | Columnist profile | E-mail
From Saturday's Globe and Mail
Published Saturday, Apr. 28, 2012
professional_service_firms  middle_class  bubbles  career_paths  automation  Margaret_Wente  downward_mobility 
april 2012 by jerryking
The fight of Richard Rainwater's life - Fortune Management
November 7, 2011 | Fortune | By Peter Elkind and Patricia Sellers, with Doris Burke.
The renowned dealmaker built a fortune using little besides his wits. Now he's funding a crash program to stop the disease that's destroying his mind.

Rainwater's deals were just as eclectic and creative. But a pattern quickly emerged. Rainwater always looked for a big event. A blowup in energy prices. A revolution in health care reimbursements. A real estate bubble. Then he looked for a powerful way to exploit the upheaval -- not just to bet the trend but to turbocharge the bet. To snatch up drilling assets at panic-sale prices and hand them to the oil patch's most astute operator. To build a chain of super-efficient hospitals. To buy premium downtown office space (the quickest to bounce back) on the cheap after a market crash.
Bass_brothers  big_bets  bubbles  creativity  cunning  dealmakers  discontinuities  event-driven  events  leverage  Richard_Rainwater  turbocharge 
november 2011 by jerryking
Is the World's Hottest Market Starting to Wobble? Investors in China have recently earned one eye-popping return after another. But making money there won't be quite so simple in the years ahead. - April 1, 2004
April 1, 2004 | Business 2.0 | By Carla A. Fried
Don't avoid China. But there's a strong case to be made for limiting your investment, and even for waiting awhile to get in. Here's why.

(1) THE PICTURE LOOKS ROSIER THAN IT REALLY IS.
(2) EVENTUALLY, THE HONEYMOON WILL END.
(3) WHERE THE SMART MONEY GOES.
China  bubbles  emerging_markets  risks  smart_money 
october 2011 by jerryking
Silicon Valley Booms but Worries About a New Bust - NYTimes.com
The Airbnb founders Nate Blecharczyk, left, Joe Gebbia, and Brian Chesky talked to guests at the party.
By CLAIRE CAIN MILLER
Published: August 20, 2011
Airbnb  hospitality  start_ups  bubbles  silicon_valley  boom-to-bust 
august 2011 by jerryking
Venture Capital Investors, Lesson Learned, Do More Homework - NYTimes.com
By CLAIRE CAIN MILLER
August 9, 2011

the market for investing in tech start-ups remains white-hot. Still,
some investors are proceeding with extreme caution.

Saying they learned their lesson in the dot-com boom and bust, and the
2008 recession, the institutional investors — pension funds, university
endowments and foundations — that put money in venture capital funds are
more selectively choosing the firms in which they invest, doing
exhaustive research before handing over money, and in some cases driving
hard bargains for more favorable management fees and shares of profits.
cautionary_tales  venture_capital  vc  limited_partnerships  due_diligence  investment_research  Claire_Cain_Miller  institutional_investors  selectivity  pension_funds  endowments  foundations  lessons_learned  bubbles  economic_downturn 
august 2011 by jerryking
Want Success in Silicon Valley? Drop Out of School - NYTimes.com
May 25, 2011, 12:01 AM
Want Success in Silicon Valley? Drop Out of School
By CLAIRE CAIN MILLER
Claire_Cain_Miller  innovation  ideas  silicon_valley  start_ups  bubbles  Peter_Thiel  education 
may 2011 by jerryking
Internet businesses: Another digital gold rush
Internet companies are booming again. Does that mean it is time to buy or to sell?
bubbles  Web_2.0  business  finance 
may 2011 by jerryking
Twitter's Suitors Talk in Billions - WSJ.com
* FEBRUARY 10, 2011 Twitter as Tech Bubble Barometer By SPENCER E. ANTE, AMIR EFRATI And ANUPREETA DAS
Twitter  valuations  IPOs  exits  Google  Facebook  Spencer_Ante  bubbles 
february 2011 by jerryking
The Great Global Buyout Bubble
November 13, 2005 | New York Times | By ANDREW ROSS SORKIN
KKR  private_equity  Andrew_Sorkin  bubbles 
december 2010 by jerryking
Letters to the Editor: Spotting Bubbles in the Economy Isn’t Hard, but Deflating Them Is - WSJ.com
AUGUST 2, 2009 | Wall Street Journal..."More important than
appointing and paying someone to identify risks which are already being
identified is the need to have the political will to do something about
them when they are identified and, more importantly, to have the wisdom
to know which ones are going to become problems and which ones aren’t.
Systemic risks that cause major disruptions are only identified in
hindsight."..."Systemic risk is not created by assets increasing in
value—that’s good news. The risk is that asset values increase because
of excessive debt growth. Bubble watching is then simply a matter of
defining a speed limit for debt growth."
letters_to_the_editor  bubbles  Alan_Greenspan  systemic_risks  debt  political_will  assets  asset_values  wisdom  hindsight 
august 2010 by jerryking
Going Glossy in the Housing Bust -
August 5, 2010 | BusinessWeek | By Alexandra Wolfe. When
Joseph Diaz saw the bubble, he sold his real estate company—and launched
a travel magazine. "After returning from India, Diaz read a dozen
how-to books on the publishing business and then flew to New York to
meet James B. Kobak, a veteran adviser to magazines such as Playboy.
Kobak suggested they put together three sample issues. Diaz and Sullivan
went a step further. With $15 million of their own money and
investments from family members, they started an operation in San
Francisco and hired a small staff of editors and salespeople. In August
2009 they launched the glossy, photo-laden Afar. "
travel  magazines  entrepreneur  bubbles  San_Francisco  howto 
august 2010 by jerryking
Study history, young man
25 Mar 2008 or 13 Mar 2008 | Reuters breakingviews.com |By Hugo Dixon

The current crisis might have been less severe if bankers, traders and fund managers knew more about previous bubbles. To qualify as financial professionals, they should have to pass exams quizzing them about the South Sea Bubble and the crash of 1929.
financial_history  economic_downturn  crisis  bubbles 
july 2010 by jerryking
The Misguided Attack on Derivatives - WSJ.com
APRIL 26, 2010 | Wall Street Journal | By L. GORDON CROVITZ.
Short-selling warns markets that an asset bubble is about to burst.
Easy money, easy mortgages, and banks too big to fail were key causes of
the credit crisis. It was also Wall Street's greatest information
failure in many years. We need more trading, not less, and more signals
in the market faster that prices need to be adjusted. The last thing we
need is outlawing opportunities for people like Mr. Paulson to bring
vital information to market.
derivatives  L._Gordon_Crovtiz  John_Paulson  information_gaps  signals  information_flows  too_big_to_fail  short_selling  bubbles 
april 2010 by jerryking
Op-Ed Columnist - The Goldman Drama - NYTimes.com
April 26, 2010 | NYT | By DAVID BROOKS. Between 1997 and
2006, consumers, lenders and builders created a housing bubble, and
pretty much the entire establishment (Fannie Mae, Freddie Mac, their
regulators, the big commercial banks and their regulators, The Fed.,
the ratings agencies, the SEC and the political class in general )
missed it....Outside the establishment herd, on the other hand, there
were contrarians who understood the bubble (which was the easy part) and
who figured out how to take counteraction (which was hard).... it would
be smart to decentralize authority in order to head off future bubbles.
Both Gregory Mankiw of Harvard and Sebastian Mallaby of the CFR have
been promoting a way to do this: Force the big financial institutions to
issue bonds that would be converted into equity when a regulator deems
them to have insufficient capital. Thousands of traders would buy and
sell these bonds as a way to measure and reinforce the stability of the
firms.
David_Brooks  Goldman_Sachs  contrarians  bubbles  regulators  capital_adequacy  bonds  equity 
april 2010 by jerryking
Paradise Lost for Wealthy Resort Novice - WSJ.com
DEC. 7, 2009 | Wall Street Journal | by KRIS HUDSON. For some
ultrawealthy Americans like Mr. Sillerman, trophy hotel investments
made during the real-estate boom have turned into major burdens. Some
newly opened properties aren't generating enough cash to cover operating
expenses. Construction of others is being halted as lenders and
investors pull out. During the first nine months of the year, developers
postponed or canceled 43 luxury hotels totaling about 9,300 rooms in
the U.S. and the Caribbean, according to research firm Lodging
Econometrics. While veteran hoteliers are accustomed to booms and
busts, the newcomers are getting a sobering lesson in the risks of
owning and developing high-end lodging, which has been hit hard by the
real-estate bust. Sources: research firm Lodging Econometrics,
credit-rating company Realpoint LLC, Harrison Group - tracks the
spending and investing habits of the wealthy, Smith Travel Research,
Bjorn Hanson, assoc. prof. of lodging at NYU.
challenges  luxury  high_net_worth  travel  real_estate  hotels  hoteliers  bubbles  trophy_assets  high-end 
march 2010 by jerryking
Lessons of the '30s: Long Study of Great Depression Has Shaped Bernanke's Views; Fed Nominee Learned Perils Of Deflation, Gold Standard And Pricking of Bubbles; A Grandmother's Explanation
Dec 7, 2005 | Wall Street Journal pg. A.1 | Greg Ip. "In
1983, Mark Gertler asked his friend and fellow economist Ben Bernanke
why he was starting his career by studying the Great Depression. "If you
want to understand geology, study earthquakes," Mr. Bernanke replied,
according to Mr. Gertler. "If you want to understand economics, study
the biggest calamity to hit the U.S. and world economies." "Lafley was
in charge of the company's Asian operations during a major Japanese
earthquake and the Asian economic collapse. That's when he discovered,
he says, that "you learn ten times more in a crisis than during normal
times.""
10x  Benjamin_Bernanke  economists  U.S._Federal_Reserve  bubbles  financial_history  Greg_Ip  Great_Depression  disequilibriums  geology  earthquakes  '30s  anomalies  crisis  deflation  lessons_learned 
november 2009 by jerryking
Another Classic Book On Historic Bubbles - WSJ.com
OCTOBER 15, 2008 | Wall Street Journal | by David Fisher

Charles MacKay's 1841 book "Extraordinary Popular Delusions and the
Madness of Crowds" was not included. This brilliant analytical volume
documenting the Mississippi scheme of 1719-1720, the English South-Sea
bubble of 1711-1720 and the Dutch tulipomania of 1634-1636 are still
valuable narratives for insight into the numerous financial booms and
busts over time.
letters_to_the_editor  bubbles  financial_history 
april 2009 by jerryking
A Tale of Several Cities: What explains why Boston flourishes while Philadelphia flounders?
Friday, October 20, 2006 12:01 A.M. EDT, WSJ op-ed by JULIA VITULLO-MARTIN.

Why isn't Philadelphia Boston? Why does Boston prosper, people and businesses outbidding one another to get in, while Philadelphia languishes, with acres of vacant and underused property announcing the lack of local demand? .......The answers are not to be found in conventional 20th-century analysis, which emphasized the seemingly unsolvable urban crisis: the decline of industrial jobs, the burdens of excessive taxation, the inevitability of racial tensions and the dominance of geography....At least part of the answer stems from their underlying cultures..... In his "Puritan Boston and Quaker Philadelphia" (1979), E. Digby Baltzell argued that Boston Brahmins, with their belief in authority and leadership, embraced a sense of responsibility for civic life, while Philadelphia Gentlemen, with their inward but judgmental Quaker ways were deeply unconcerned about their city's welfare.....cultural analysis -- long out of fashion as too soft (as as opposed to econometrics) or too racist (who is to say that one culture is better than another?) -- is due for a comeback. .....The old answer of urban success was deterministic: taxes and geography.....as the historian Richard Wade has noted for years, against the tide of his field, this theory has its flaws: If the sheer excellence of a harbor truly determined a city's fate, then the greatest city in America would be Upper Sandusky, Ohio....What flourishing cities often have in common, instead, are two crucial cultural characteristics: combativeness and cunning.....That same energy contributes to New York's cyclical boom-and-bust nature, regularly pushing speculation beyond the limits of an exuberant boom, thereby encouraging a bust. ....Cunning and combativeness, however, often restore cities financially without making them many new friends, except, perhaps, for the young -- who, for the past two decades, have been returning in great numbers to the old neighborhoods long ago abandoned by their parents and grandparents....But what makes cities successful -- or even just lovable -- can seldom be quantified.
boom-to-bust  municipalities  Toronto  ECONOMY  city  cities  Boston  Philadelphia  gentrification  cultural_analysis  cultural_values  leadership  Boston_Brahmins  bubbles 
february 2009 by jerryking
Bernanke's Bubble Laboratory - WSJ.com
May 16, 2008 WSJ article by Justin Lahart on the rise of
studying "bubbles"(manias) in housing, credit, tech stocks,
commodities at Princeton University
economics  History  bubbles  Benjamin_Bernanke  financial_history 
january 2009 by jerryking
Business; Private Traders See Gold in Venture Capital Ruins
April 15, 2001 By AMY CORTESE This article is a tickler on the
issue of a KPMG's ICE group selling a service to evaluate and assess VC
and PE portfolio for the secondary market. What conceptual tools would
be needed to automate/systematize the process?
portfolios  secondary_markets  venture_capital  KPMG  due_diligence  exits  relationships  one-of-a-kind  valuations  discounting  bubbles  liquidity  tools 
december 2008 by jerryking

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