Monday, April 30, 2018

End of April Links

  • You never need to find an outside investor to say, "oh hey this nonexistent social network looks like a great buy at $600 million." Instead you just need a few people to say, "wait this nonexistent social network seems terribly overvalued at $600 million and I am going to bet against it." That's... that's what they're supposed to do, right? Short sellers are supposed to try to root out scams and bet against them. That's good for price efficiency (it keeps down the valuation of scams) and it's good for exposing scams (short sellers have every incentive to expose frauds to the government to drive down the price of the frauds and make money for themselves). [Bloomberg]
  • From a cultural perspective, the city is still hot. One of my friends says that his East Coast friends who age out of that high cost environment heavily favor places like Nashville and Austin. Apparently recruiting people to come to Nashville is super-easy. In fact, I heard one person talk about how they have to be careful to filter for people who actually want the job in question, not just a vehicle to get them to Nashville. [link]
  • Islay, known as the "Queen of the Hebrides," is the southernmost island of the Inner Hebrides, accessible by ferry and plane. It remains unique among the Scottish regions in that its whiskies are characterized by smoky, peaty flavors and aromas. Many consider it an acquired taste, but for those who have acquired it, like myself, Islay is pilgrimage-worthy, much like Bordeaux is for oenophiles, and like those wine-producing regions where vineyards dominate the landscape, the local drink is more than just a drink on Islay. [NY Times]
  • Of course, the literary world is a small one — as are the fields represented by many of the books the Review covers. "In certain areas, everyone knows everyone," Ms. Paul said, citing politics, science and even British literature. ("It's an island nation," she added.) [NY Times]
  • New York City cannot compete with Los Angeles's patchwork quilt of cuisines, Northern California's sainted ingredients, New Orleans's discerning and passionate diners. What sets New York's restaurant culture apart is that it never quite shakes the past and has never fully severed its ties to Europe. This is why New York can seem to be stuck in the last century, but it also explains its unusual receptivity to news from across the Atlantic. [NY Times]
  • What became clear is that, while having its moments, being single is work, a lot of work. The prepping, pruning, preening, planning, Tindering, texting, courting, rejecting, Coachella-ing, gaming, being rejected is exhausting. Being good at being single either means you're one of the 1% who don't live in the real world, and everything just sort of comes to you (note: I know a few of these people and hate them), or — like any job — you have to work at it. [link]
  • The research company Ceresana estimates that pigments are a $30 billion industry, headlined by major chemical companies such as Lanxess, BASF, Venator (a spinoff from Huntsman), and Chemours (a spinoff from DuPont). [Bloomberg]
  • Our kitchen is stocked with "provisions" of organic beef jerky, coconut water, craft beers, chips, and two restaurant-class espresso machines. We have two ping pong tables and buckets of 3-star ping pong balls. (A new office manager bought "1-stars" once and some of the guys protested by crushing them.) [Outside]
  • The United States cannot be a colonizing nation for a long time yet. We have only twenty-three persons to the square mile in the United States without Alaska. The country can multiply its population by thirteen; that is, the population could rise above a billion before the whole country would be as densely populated as Rhode Island is now. There is, therefore, no pressure of population, which is the first condition of rational expansion, unless we could buy another territory like the Mississippi Valley with no civilized population in it. If we could do that it would postpone the day of over-population still further, and make easier conditions for our people in the next generations. [Sumner]
  • In one of the best documentaries about present-day Spain's intractable history wars, two Swedish filmmakers visit the Valley of the Fallen, the mausoleum Franco had built outside Madrid to commemorate his victory in the Civil War.​ They are accompanied by 86-year-old AndrĂ©s Iniesta, who became a political prisoner in 1939 when he was 17, spent nearly twenty years in prison and was one of the 20,000 forced labourers who built the mausoleum. The filmmakers wanted him to meet the abbot, chosen by Franco in 1958 and still in post in 2007. But staff at the ticket kiosk asked him to pay – the mausoleum's upkeep is partly dependent on public funds – and he was furious. 'You can't charge me! I built it! This is my place! How dare you try to charge me!' (In the end one of the filmmakers paid for his ticket.) [LRB]
  • Everyone who has made two visits, at intervals of months, to Barcelona during the war has remarked upon the extraordinary changes that took place in it. And curiously enough, whether they went there first in August and again in January, or, like myself, first in December and again in April, the thing they said was always the same: that the revolutionary atmosphere had vanished. No doubt to anyone who had been there in August, when the blood was scarcely dry in the streets and militia were quartered in the smart hotels, Barcelona in December would have seemed bourgeois; to me, fresh from England, it was liker to a workers' city than anything I had conceived possible. [LRB]
  • What private individuals want is free access, under order and security, to any part of the earth's surface, in order that they may avail themselves of its natural resources for their use, either by investment or commerce. If, therefore, we could have free trade with Hawaii while somebody else had the jurisdiction, we should gain all the advantages and escape all the burdens. [Sumner]
  • One potential risk insurance policyholders face is that their insurer will become insolvent. This risk may be higher when the insurer is selling long-time-horizon products with little historical data on the performance of the products. For many insurers that wrote LTC insurance, initial assumptions about investment returns, mortality, morbidity, and policyholder behavior that turned out to be incorrect wound up hurting their profitability, and for some, their viability. Consumers should consider both price and capital strength when purchasing such products. Finally, policyholders should be aware that guaranty funds may not always make them whole should an insurer fail. [link]
  • Using the complete history of regular quarterly and annual filings by U.S. corporations from 1995-2014, we show that when firms make an active change in their reporting practices, this conveys an important signal about future firm operations. Changes to the language and construction of financial reports also have strong implications for firms' future returns: a portfolio that shorts "changers" and buys "non-changers" earns up to 188 basis points in monthly alphas (over 22% per year) in the future. Changes in language referring to the executive (CEO and CFO) team, regarding litigation, or in the risk factor section of the documents are especially informative for future returns. We show that changes to the 10-Ks predict future earnings, profitability, future news announcements, and even future firm-level bankruptcies. Unlike typical underreaction patterns in asset prices, we find no announcement effect associated with these changes--with returns only accruing when the information is later revealed through news, events, or earnings--suggesting that investors appear to be ignoring these simple changes across the universe of public firms. [SSRN]
  • Ms. Kirchhoff designs Disco Cubes, frozen objets d'art that keep cocktails cold while also evoking the botanical paperweights of the glass artist Paul Stankard. When she isn't suspending herbs, vegetables and logos inside orbs of ice, Ms. Kirchhoff is a D.J. (she recently played at the Louis Vuitton store opening in Chicago) and a portrait and fashion photographer (her images have been published by, the Coveteur and Kinfolk). [NY Times]
  • It's the Craft Beverage Modernization and Tax Reform Act, an amendment that quietly found its way into the omnibus tax bill that President Trump signed into law in December. The measure lowers the federal excise tax that producers pay to $2.70 per proof gallon (a gallon of spirits that is 50 percent alcohol), from $13.50, for the first 100,000 gallons of distilled spirits produced or imported annually. [NY Times]
  • Still, people use weed for a reason. Concentrates known as dabs — a waxy substance that can be flash vaporized in a glass pipe — offer a more powerful high than any flower could, and are becoming popular among classic stoner types. One California grower I spoke to said that even if younger clientele are looking to get nice and stoned, loose-leaf pot is no longer the coolest way to do that. [link]
  • The Duke of Westminster owns (via some kind of ingenious tax free trust) 0.22% of the UK, including big chunks of Mayfair and Belgravia. He has an economic incentive to favor more immigration so he can raise rents. At the other end of the spectrum, renters have incentives to dislike immigration because it drives up their rents. On the other hand, people like the Duke of Westminster tend to have more influence over the conventional wisdom than do renters, so it's not at all clear if renters understand the economics as well as the Duke does. The BBC, for example, does not go out of its way to explain to renters how immigration costs them. You might think that this would be a rich subject for a Foucaultian analysis of how power drives worldviews, but, for some reason, that never seems to come up. [Sailer]

1 comment:

eah said...

"renters have incentives to dislike immigration because it drives up their rents."

Or because the immigrants sexually brutalize their underage daughters. Which the authorities, who perhaps favor more immigration, then ignore and/or cover-up.

Great system.