What We’re Reading, 5/17/12
Every morning, we poll the staff and round up their favorite economic, financial and political reads of the day. On our radars this fine Thursday: a boatload of stuff about tomorrow’s Facebook IPO. (Plus more bad news from J.P. Morgan and Justin Bieber, the investor.)
"Facebook Insiders Boost Plans to Cash Out in IPO," by Shayndi Raice, Anupreeta Das and Lynn Cowan (Wall Street Journal). Well, this looks less than promising! Just days after Facebook raised its expected IPO price range, some of the company’s biggest investors announced plans to sell as much as half their stakes.
"Facebook: The Ultimate Dot-Com," by John Cassidy (New Yorker). The dream of the nineties is alive in Facebook, which Cassidy considers the quintessential “dot-com.” “The bursting of the bubble discredited the term ‘dot-com,’ which was understandable but, in a way, unfortunate, because the term itself had come to be the expression of an attitude that saw in online communication and online commerce boundless possibilities,” he writes. “Facebook’s I.P.O. represents a return to that mindset.”
"The Mystery of the Vanishing IPO," by Matthew Yglesias (Slate). Between 1980 and 2000, an average of 311 companies went public per year. Since 2000, that number’s dropped to 102. Blame start-up culture, Yglesias argues — it’s not what it was 15 years ago.
"J.P. Morgan’s Trading Loss Is Said to Rise at Least 50%," by Nelson Schwartz and Jessica Silver-Greenberg (New York Times). That puts the loss at $3 billion or more, for those of you who are counting. The White House reacted with a call for tougher reforms.
"Experts Try to Chart Path for Exit from Currency," by Gabrielle Steinhauser (Wall Street Journal). Europe’s abuzz with rumors that Greece may drop the euro and return to a local currency. But here’s the big question: Is that legally possible? And if it is, can Greece bow out without further wrecking its economy? (Answers on both counts: Probably not.)
"What Mitt Romney Is Really Worth," by Edwin Durgy (Forbes). In short, roughly $230 million. (Perspective: That would buy 6.4 million shares of Facebook, or 19 million Etch A Sketches.)
"Ted Sarandos’ High-Stakes Gamble to Save Netflix," by Nick Summers (Newsweek). Netflix has seen plenty of drama over the last few years, as controversial decisions by CEO Reed Hastings caused customers to flee and share prices to plummet. But the company’s chief content officer plans to save Netflix with a different kind of drama — risky, big-budget, all-star original programming, of the kind you usually see on HBO.
"Google Revamps Search with Massive ‘Real World Map of Things,’" by Ryan Singel (Wired). Your friendly curator was casually Googling Game of Thrones last night when she chanced upon a strange, picture-based results page. Lo and behold, Google’s launched a new widget that it thinks will map the relationships between results — and change the way we search.
"Pinterest Raises $100 Million with $1.5 Billion Valuation," by Pui-Wing Tam (Wall Street Journal). Facebook? Old news! Picture-sharing site Pinterest raised a whopping $100 million in its latest financing round.
In other news: In Zimbabwe, a bus ticket runs about 100-trillion dollars; in the Bay Area, Facebook’s upcoming IPO packs upscale restaurants and boutiques; in Hollywood, Justin Bieber sings, dances, makes pre-teens cry … and, apparently, invests; and finally, across the Internet, caffeine addicts rejoice over research claiming that coffee might actually help us live longer. (Says mag writer Susannah Snider: “Thank goodness!”)
Happy reading, Tumblers!
What We’re Reading, 5/15/12
Every morning, we poll the staff and round up their favorite economic, financial and political reads of the day. What we’re perusing over coffee this morning: Wall Street reform, European volatility, and the woes of the modern brickmason.
"In Washington, Mixed Messages Over Tighter Rules for Wall Street," by Ben Protess and Ed Wyatt (New York Times). If you hoped the J.P. Morgan fiasco would end with Wall Street reforms, Ben Protess and Ed Wyatt are here to disappoint you. A number of bank regulators are less than excited about passing new regulations to control risky trades.
"Faith Fades in Eurozone Firewall," by Robin Wigglesworth and Miles Johnson (Financial Times). European markets are growing ever choppier over fears that Greece will drop the euro — and that the repercussions will shake Italy and Spain. Says Luke Spajic of Pimco: “It’s looking alarming right now … The market is effectively trying to price in a disorderly exit for Greece.”
"Taxmageddon Sparks Rising Anxiety," by Lori Montgomery and Rosalind Helderman (Washington Post). While your friendly curator thinks we could do without all these armageddon “puns,” the scary sentiment still stands: After the November election, a lame-duck Congress will have a mere two months to sort out the spending gridlock. Hospitals and government contractors are prepping for “chaos.”
"Facebook Hikes IPO Range to Raise $12.1 Billion," by Olivia Oran and Alexei Oreskovic (Reuters). Facebook raised its price target range to $34 to $38 a share, which will push the company’s value between $93 and $104 billion.
"Taxpayers Fund $454,000 Pay for Collector Chasing Student Loans," by John Hechinger (Bloomberg). Your tax dollars at work: Joshua Mandelman makes $454,000 (!) as a student-loan debt collector, and his company scores government commissions every time he collects on a defaulted student loan.
"The Toughest Guy on Wall Street," by Shawn Tully (Fortune). Much has changed for James Dimon since this profile ran six years ago, but if you’re trying to get into the head of the recently shamed CEO, it’s still a good place to start. From the editor’s note: “For six years, Dimon grew J.P. Morgan into a banking powerhouse, and he emerged from the financial crisis unscathed while most of his bank CEO counterparts were shown the door. He’s been known as one of Wall Street’s best risk managers — until last week, when he disclosed a $2 billion trading loss … Now Wall Street is judging its toughest guy.”
"The Economic Case for Same-Sex Marriage," by Betsey Stevenson and Justin Wolfers (Bloomberg). Regardless of your views on same-sex marriage, Wharton professors Stevenson and Wolfers have penned a fascinating editorial on the household as “economic institution” — and how that unit functions today.
"Why Are Teen Moms Poor?" By Matty Yglesias (Slate). Some counter-intuitive new research suggests that question should actually be the other way around: Teenagers aren’t poor because they have babies — they have babies because they’re poor.
"Heavy Lifting," by Aaron Leaf (Good). Writer goes to one of Canada’s top universities, becomes a warehouse laborer, lives to tell about its economic implications.
And in other news: Newt Gingrich is America’s most indebted politician, brick masonry is America’s fastest-dying profession, 0% unemployment does exist somewhere, and beware of Greeks bearing gifts outside the European Central Bank. (Don’t worry, the last one’s a joke.)
What We’re Reading, 4/27/12
Every morning, we poll the staff and round up their favorite economic, financial and political reads of the day. On our radar this fine Friday: GDP growth, Spain’s S&P downgrade, and the sales benefits of resurrecting deceased rappers.
"Economy in U.S. Grew Less than Forecast First Quarter," by Shobhana Chandra (Bloomberg). We, like most of the free world, are closely following the news that the U.S. economy grew only 2.2 percentage points in the first quarter — .8 percentage points less than the previous quarter, and .3 percentage points less than forecast.
"The ‘Small’ Numbers on the Student Loan Interest Rate Hike," by Jason Delisle (Ed Money Watch). We’ve all heard the apocalyptic rhetoric on the student loan interest rate hike — or at least seen Obama “slow-jamming” about it on Jimmy Fallon. But Delisle looked into some of the numbers surrounding the rate hike, and the stakes actually look pretty low.
"Lehman Elite Stood to Get $700 Million," by Walter Hamilton, Andrew Tangel and Stuart Pfeifer (LA Times). Lehman Brothers paid its 50 top employees more than $700 million in the year before the firm’s collapse. (Think yearly salaries in the $15- to $50-million range.) The Times quotes one expert saying “many people are going to be stunned at how well some people were being paid.” Consider your friendly curator stunned.
"Spain, S&P and the Austerity Growth Debate," by Peter Spiegel (Financial Times). The S&P downgraded Spain’s credit rating from A to Triple B Plus yesterday, putting it in the unhappy league of Italy and Ireland. Spiegel’s take: It’s a condemnation of austerity programs.
"The Competitiveness Crisis," by Uri Dadush (Foreign Policy). Must-read context on Europe’s ongoing economic woes, especially in light of Spain’s recent downgrade. Writes Dadush: “The real root of the euro crisis is the gap between Europe’s core and periphery — and it’s getting wider.”
"How to Get Food on Every Table," by Bjorn Lomborg (Slate). A new paper from the International Food Policy Research Institute proposes an economic solution to world hunger. Food production figures heavily.
"Twitter Becomes a Key Real-Time Tool for Campaigns," by Karen Tumulty (Washington Post). Twitter was around for the 2008 election, but Tumulty says it “came into its own” this election cycle, shaping the political debate in occasionally surprising ways. (#tumblr2016?)
And in other news: Everything you ever wanted to know about how they plan the menu at the White House Correspondents Dinner, that creepy Tupac hologram boosted his album sales, and Groupon’s young CEO said the company needs to grow up — immediately after apologizing for drinking too much beer. (“Is Andrew Mason to beer what Steve Jobs was to turtlenecks?” Jokes mag reporter Susannah Snider. “Only time will tell … “)
Happy reading, Tumblers!
What We’re Reading, 4/12/12
Every morning, we poll the staff and round up their favorite economic, financial and political reads of the day. On our radar: foreclosure, factories, and the “income tax cocktail.”
"The Great American Foreclosure Story: The Struggle for Justice and a Place to Call Home," by Paul Kiel (ProPublica). Banks have foreclosed on more than 4 million homes since 2007 — and 6 million loans remain in danger of foreclosure. Kiel’s beautifully reported long-read on the foreclosure crisis is a poignant look at what homeownership means now.
"Mitt Romney is the New Al Gore," by Marin Cogan (GQ). No, he didn’t invent the Internet. But Romney and Gore both display what columnists the world over have called a certain robotic stiffness — a definite unfamiliarity “with human customs,” in the words of New York’s Dan Amira.
"Forget the Factories," by Matthew Yglesias (Slate). We noticed a lot of our fellow finance writers tweeting this one this morning — Yglesias claims that a return to American manufacturing, that distant dream touted by the Obama campaign, would actually make America poorer and less competitive in the global market.
"David Foster Wallace’s Tax Class," by Seth Colter Walls (The New Yorker). “ACCOUNTANTS ARE COWBOYS OF INFORMATION.” “PASSIVE a big word for IRS.” And other notes from DFW’s time in a tax class, researching The Pale King.
We’ll wrap with a trio of light-hearted tax news, since you have five days left to file. The ever-irreverent Awl has launched a personal finance blog, and it took tax questions yesterday. (We’re following said blog with great curiosity.) Good has a recipe for an income tax cocktail. (Appropriately, it sounds bitter.) And mag reporter Susannah Snider tells us that “safe drivers shouldn’t drink, text or think about filing taxes behind the wheel” — fatal accidents spike on tax day.
What are you reading today?
What We’re Reading, 4/9/2012
Every morning, we poll the staff and round up their favorite economic, financial and political reads of the day. On our radar this fine Monday morning: more on jobs, patent trolls and executive perks.
"U.S. Job Figures Become a Fickle Political Football," by Robin Harding (The Financial Times). Economists and finance writers always note the monthly jobs reports — but now campaign strategists pay attention, too. “The challenge for President Barack Obama and his all-but-certain Republican rival Mitt Romney is to tell a story about jobs that holds true with every report,” Harding writes. (Unrelated challenge: When the Financial Times says “football,” does it actually mean soccer?)
"Federal Funds to Train the Jobless Are Drying Up," by Motoko Rich (The New York Times). 12.7 million people are still looking for jobs, but federal funding for work force training has dropped to historic lows. Both employers and employees suffer.
"For Big Companies, Life is Good," by Scott Thurm (The Wall Street Journal). New jobs report got you down? New analysis from the Journal finds heartening growth elsewhere — among large corporations, which are leaner and more profitable than they were pre-recession.
"The Troll Toll," by Ray Fisman (Slate). ”Patent trolls” buy up huge numbers of patents for the express purpose of litigating. That’s a hassle for small businesses, obviously. But a new study by MIT economist Catherine Tucker indicates a greater problem — patent trolls may actually stifle innovation. (Required listening on this subject: This American Life’s “When Patents Attack!”)
"The Truth About Ric Edelman," by Caren Chesler (Financial Advisor). We’re getting a bit insidery here, but bear with us — FA’s April cover story is an intriguing personality profile of a guy once called “Suze Orman before there was a Suze Orman.” Edelman, who has written a mountain of books and hosts a weekly radio show, is arguably one of the country’s most controversial financial planners.
"A ‘Fat Cat’ With the President’s Ear," by Robert Frank (The Wall Street Journal). While we’re talking profiles, this one’s a must-read: Robert Wolf, the president of UBS’s investment bank, was one of President Obama’s top fundraisers in the last election. The so-called “Pied Piper of Wall Street” might step back in 2012.
"In Chief Executives’ Pay, a Rich Game of Thrones," by Natasha Singer (The New York Times). Apple CEO Timothy Cook makes $42,000 an hour. Enough said.
What are you reading today?
What We’re Reading, 3/30/12
Every morning, we poll the staff and round up their favorite economic, financial and political reads of the day. On our iPads and in our inboxes on this lovely Friday afternoon: record-breaking lotteries, record-breaking gas prices, and where we rank on the global pay scale.
"Big Payout, Big Suckers?" By Jordan Ellenberg (Slate). We probably don’t have to tell you that a record $640-million lottery drawing is going down tonight, but you might be interested in your odds. Slate resurfaced this 2001 column by mathematician Jordan Ellenberg — in it, he calculates his odds of winning a $280-million Powerball drawing. ($280 million? Child’s play!) “Is it really worth a buck to a buyer?” Asked digital director Doug Harbrecht after reading. “Depends how much you want the money.”
"Why Even Skeptics Are Buying a Mega Millions Ticket," by Bill Briggs (MSNBC). A look inside our psychological urge to defy even hopelessly poor odds.
"Everyone’s a Winner? The Role of Cognitive Biases in Lottery Playing," by Mark Griffiths. Senior editor Bob Frick dug up this fascinating academic analysis by gambling psychologist Mark Griffith. “It addresses an issue on everyone’s mind right now, and it’s a great summary of lottery psychology,” he says. Well, it’s clearly on your friendly curator’s mind. In other news…
"Full-Court Press" (The Economist). The arguments have ended and a decision’s months away, but that won’t stop us from ruminating on the implications of the health care reform case. Here, The Economist predicts it will “transform the power of the federal government” forever.
"Healthcare History: How the Patchwork Coverage Came to Be," by Bob Rosenblatt (LA Times). An intriguing explainer on the history behind our current insurance system — much of which can be traced back to World War II.
"The Great Gas Mystery: Higher Prices, But Continued Growth," by Andrew Leonard (Salon). Historically, less driving and economic disaster go hand in hand. But Americans are driving far less as gas prices edge toward four dollars a gallon — and the economic outlook seems pretty rosy. What’s going on? Leonard’s theory involves smartphones and social media, of all things.
"Barry Ritholz on the Causes of the Financial Crisis" (The Browser). Barry Ritholz is a noted Wall Street money manager and the man behind The Big Picture. Here, he recommends five books on the financial crisis — and a lot of colorful commentary on where and how the system collapsed.
"Where Are You On the Global Pay Scale?" (BBC). If you do one thing today, try out this quick interactive from the BBC. Your curator was heartened to see how far her entry-level paycheck will stretch abroad.
What We’re Reading, 3/15/2012
Making the office rounds this morning: Goldman Sachs satire, cashless living and cheesy grits. Below, a round-up of recommendations from the Kiplinger staff.
"Why I Am Leaving the Empire" (The Daily Mash). ”Greg Smith’s skewering of ex-employer Goldman Sachs yesterday was ripe for satire,” says senior editor Bob Frick. So ripe, in fact, that we’ve been reading little else. There’s also “Why I am Leaving the Knicks,” “Why I Am Applying for an Executive Director Position at Goldman Sachs,” and ”Greg Smith’s Letter to Goldman Sachs is Straight Out of Mad Men.” (That last one is less a parody and more a clever critique, says our social media specialist Amanda Lilly.) But in more serious responses …
"The Vampire Squid Spills Its Ink," by William Cohan (Financial Times). Cohan literally wrote the book on Goldman Sachs, and considers Smith’s controversial resignation an “existential moment” for the firm.
“Yes, Mr. Smith, Goldman Sachs Is All About Making Money” (Bloomberg). The lede to Bloomberg’s scathing editorial: “Apparently, when Greg Smith arrived at Goldman Sachs Group Inc. (GS) almost 12 years ago, the legendary investment firm was something like the Make-A-Wish Foundation — existing only to bring light and peace and happiness to the world.”
"The Devil Wears Pinstripes," by Heidi Moore (Marketplace). Here’s an interesting take: Moore reads Smith’s resignation less as a protest against a morally bankrupt corporate culture and more as “the objection of the underclass of younger bankers and traders stymied by a lack of career mobility.”
"Can You Enjoy a Strip Club Without Cash?" by Seth Stevenson (Slate). Web editor David Mulhbaum reminded us that Greg Smith is not the only news of the day. On Slate, Seth Stevenson’s attempting to live without cash. “It takes a turn for the amusing here,” David notes, not untruthfully.
"A Plan C for Afghanistan," by Doyle McManus (LA Times). Says political editor and Kiplinger sage Ken Bazinet: “It’s becoming clear that in a post-Bin Laden world the mission in Afghanistan is muddled. LA Times wise Washington sage Doyle McManus says it’s time for a ‘Plan C.’”
"Bank of America: Too Crooked to Fail," by Matt Taibbi (Rolling Stone). The provocative Taibbi takes on Bank of America bail-outs, at great length.
"What Every Woman Should Tell Her Daughter About Money," by Sheryl Nash-Nance (Forbes). Says web editor Andrea Browne: “I love the fact that the financial pros featured in this piece are teaching their daughters at a young age the importance of being able to fend for themselves financially as adults.”
"Wolf Blitzer Can’t Get Enough Cheesy Grits," by David Daley (Salon). Today’s token political media story comes courtesy copy editor Liz Whitehouse, who is “tired of newscasters taking one slice of a story and blowing it up. Salon’s David Daley provides a sharp critique of a recent example.”
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