Many gamblers believe that it is possible to find a strategy to beat the lottery including selecting numbers that are due to come up or looking for a bias in past numbers. In this paper, we examine sales figures and variations in the number of winners for the various prize levels of a popular Canadian lottery to detect lottery ticket preferences. It was determined that the lottery outcomes conformed well to a random outcome. No evidence of either a bias myth or due to come up myth was found. However ticket popularity indicated a marked preference for the number 7 and low numbers, and the avoidance of high numbers and adjacent numbers. In addition we found a linear and a quadratic relationship between past frequency of the numbers and ticket popularity indicating a belief in both the due to come up and the bias myths. The findings suggest strong non-random preferences in the selection of lottery numbers
This is rather depressing so watch out and perhaps grab a whiskey…
Introduction (Via Youtube)
According to the U.S. Department of Labor’s Bureau of Labor Statistics, there are nearly 30 million people currently unemployed — that’s including those involuntarily working parttime and those who want a job, but have given up on trying to find one. In the face of the worst economic upheaval since the Great Depression, millions of Americans are hurting. “The Decline: The Geography of a Recession,” as created by labor writer LaToya Egwuekwe, serves as a vivid representation of just how much. Watch the deteriorating transformation of the U.S. economy from January 2007 — approximately one year before the start of the recession — to the most recent unemployment data available today.
The financial market was well developed in France in the years before World War I, and there were many newspapers that provided information to investors. Yet commentators at the time faulted the financial press for inaccuracy and biases, which they linked to the existence of payments made by companies for coverage in the editorial section. This paper tests whether the payment scheme induced a systematic bias in the coverage of companies listed on the Paris stock exchanges by newspapers. The results show that, although firms’ media coverage was affected, the performance of firms actually touted by the press was good. Thus, the media bias can also be explained by newspapers choosing the companies’ exposures according to their editorial policy.
Excerpts (Via SSRN)
This paper provided quantitative evidence on how four financial newspapers chose the information they published on listed firms in early-twentieth-century France. It shows that editors used varying financial criteria when choosing companies, thereby competing on various dimensions to attract readers. The results also show that the media were biased toward some subsets of companies but that this did not have a negative effect on their readers. Moreover, we have shown that independent newspapers were not the Holy Grail of unbiased information, because bank-owned newspapers did not underperform when compared to their independent counterparts. This stands in sharp contrast with the judgments of many observers writing at the time. The results also suggest that the newspaper market was segmented between risk-averse and risk-seeking investors and that the selection of the firms covered in the media varied according to the targeted readership. Notice that the increasing digitalisation of newspapers’ content will allow future research to broaden the sample of newspapers tested and consequently to assess the generic character of our results.
Although each conclusion is not surprising in itself, the broader picture that they suggest is that the importance of media bias was clearly overemphasized in the historical literature and that the dissemination of information on listed companies must have undoubtedly contributed to the development of the financial markets. The payments to newspapers could, however, have a negative impact, notably because of the transaction cost they imposed on listed firms. In particular, following the literature on corruption, small firms, those that were not able to afford paying the numerous intermediaries involved in the information market, certainly suffered from the peculiarities of the process through which information made its way into the newspapers. We let to future research the estimation of this possible impact of media bias on the overall stock market performance.
Economists have begun to use research into happiness to explore questions in economics, policy, and management. Betsey Stevenson of the Wharton School of the University of Pennsylvania surveys the work in this emerging field.
Excerpts (Via Yale)
Q: As an economist, what led you to research happiness?
Economists are concerned with human welfare. For a very long time, we believed the best thing to do was just look at what people do and infer their preferences from their behavior. But we’ve started to learn that there are some domains where that is hard to do, and simply asking people about their well-being can shed light on the situation.
Q: What particular domains are most illuminating?
I think one of the richest potential areas for happiness data is in the area of behavioral economics — in situations where the way people behave may not actually reflect their true, underlying preferences. As an example, if we were to think about raising taxes on cigarettes, we would typically say raising the price is bad for people who smoke, right? But there’s a little bit more going on. Lots of people actually want to quit. So we might ask, is it possible to improve welfare by raising cigarette taxes? A pair of economists Jon Gruber and Sendhil Mullainathan found that excise taxes make potential smokers happier. The intuition is that because some people actually quit smoking when the price goes up, they are made better off. And so it is possible to improve welfare by raising a tax that encourages us to kick bad habits.
Q: How do we measure happiness?
Happiness is measured simply by asking people. Surveys ask people, “Taken all together, how would you say things are these days, would you say that you are very happy, pretty happy, or not too happy?” Or “How satisfied are you with your life as a whole?” Sometimes they’re asked on a zero-to-ten scale, either about happiness or about life satisfaction. A common question is what’s called the ladder question: interviewees are asked to imagine a ladder with ten rungs, where the top rung describes the best possible life for you and the bottom rung describes the worst possible life for you. Respondents then report the rung of the ladder that best represents their life.
The type of happiness questions I’ve studied are more evaluative and therefore are highly correlated with questions about life satisfaction, but there are other ways of measuring happiness. Daniel Kahneman, the psychologist who won a Nobel Prize in economics, really makes a distinction between how you feel in the moment and the more evaluative assessment of life satisfaction. If there’s a difference between happiness in the moment and life satisfaction, that raises questions for policymakers: What is it that we’re trying to maximize? Are we trying to maximize people’s holistic satisfaction with their life? Are we trying to maximize lots of little moments? Q: How good are we at assessing our own happiness?
We do a pretty good job with these questions. People tend to answer the question in a similar way over time. Psychologists have spent decades showing that these questions measure something meaningful. They have compared the answers to things that we might think of as objective measures of happiness such as brain scans, heart rates, or what are called genuine smiles. The researchers then look to see if the objective data correlated with what the person says. They’ve also had people bring a friend in and while you’re filling out a survey saying how happy you are, your friend’s filling out a survey saying how happy they think you are. And it turns out people’s assessments are close to what their friends would say.
Q: How does income impact happiness?
If we look at the relationship between happiness and income, we see a very clear relationship, where wealthier people are the happiest people in society and happiness rises quite steadily with income. Beyond that, we usually find that those living in rich countries are much happier than those living in poor countries. So if you take a zero-to-ten life-satisfaction scale, people in the poorest countries tend to place themselves somewhere around three. Mid-range countries fall somewhere between five and six. And then in developed countries, people end up somewhere between seven and eight.
How safe are the banks? This column provides new evidence on what determines the likelihood of an EU bank experiencing distress, suggesting that bank risks have converged across EU members, and that a more tightly integrated financial regulation should reflect this. The results also call for a greater role for market discipline.
Introduction (via Voxeu)
The global financial crisis has highlighted the importance of early identification of weak banks. Problems that are identified late typically cost more to solve. In the EU, authorities have agreed to move towards a more centralised prudential system, an important argument being that the banking sectors of EU members have become increasingly interlinked as a result of financial integration.
But given the importance of this topic, there is a surprising lack of rigorous cross-country analysis of determinants of bank distress in the EU. Most of the bank distress studies focus on the US, which had numerous bank failures that provide a rich data set for a “forensic” examination of the determinants of distress (e.g., Wheelock and Wilson, 2000).
Key finding (via Voxeu)
Among other results, we provide empirical evidence suggesting the importance of contagion effects in the EU banking. Furthermore, we show that banks operating in more concentrated banking sectors are more likely to experience bank distress relative to banks operating in less concentrated markets. Lastly, we show that bank hazards increase with a higher share of wholesale funding, in line with recent theoretical models emphasising this channel of financial vulnerability.
That crashing sound you hear is not an accident caused by sudden acceleration of your hybrid car; it is the continuing toppling of idols, such as hybrid car companies, off their pedestals. Listen hard, lest you be next.
Toyota, the world’s leading auto company, faces a series of product problems causing a $2 billion recall, an investigation by the National Highway Traffic Safety Administration, and a galling loss of face for a company from face-conscious Japan. This follows its first annual financial loss in 50 years, with profitability regained partly through cost-cutting.
Sayonara for a while to Toyota’s reputation for quality control and invincibility. But in Dearborn, Michigan, there are no smug smiles. Ford announced that it is also fixing electronic brakes in its hybrid cars after a damaging review by Consumer Reports and more generalized concerns about electronics in cars.
Lesson (Via HBR)
Whether you head a company, lead a good cause, or coach your children’s soccer teams, your job is to root out complacency. Remember to:
Keep up the essential disciplines every single day, not skipping a single one.
Keep checking everything carefully.
Repair, renew, relearn, and reinvest regularly.
Don’t rejoice in others’ misery, because you could be next.
Thank anyone who points out flaws. Listen to disgruntled customers or disaffected constituencies.
Treat even small setbacks as occasions for redoubled efforts.
Some of the world’s most baffling social problems, says Peter Eigen, can be traced to systematic, pervasive government corruption, hand-in-glove with global companies. At TEDxBerlin, Eigen describes the thrilling counter-attack led by his organization Transparency Internationa
About Peter Eigen (Via TED)
As a director of the World Bank in Nairobi, Peter Eigen saw firsthand how devastating corruption can be. He’s the founder of Transparency International, an NGO that works to persuade…
A take-away restaurant near my house offers customers free home delivery or a ten per cent discount if you pick up. It sounds much better than saying you get no discount for picking up and suffer a ten per cent fee for delivery – this is the power of ‘framing’. Now David Hardisty and colleagues have dug a little deeper into framing, to show first, that these kinds of effects can interact with people’s political persuasion, and second, that they can act by altering the order of people’s thoughts.
Hundreds of online participants chose between various flights, computers and so on. In each case they could plump for a cheaper option or a more expensive, greener option, the latter including either a ‘tax’ to help reduce carbon emissions, or an ‘offset’ to do the same – depending on how the choice was framed. Whether the expensive option was framed as a tax or offset made no difference to Democrat (left-wing) participants. By contrast, Republicans (right-wing) and Independents were much less likely to choose the more expensive option when it was labelled as a tax.
In a second study the researchers added a technique known as ‘concurrent thought listing’, which involved the participants sharing their thoughts as they made their product choices.
This process revealed that when the expensive option was labelled as a tax, the Republicans and Independents, but not Democrats, had a consistent tendency to weigh-up the advantages of the cheaper option first before they considered the benefits of the greener choice. This is significant because past research shows that when we appraise options in sequence, the first item we consider tends to be favoured. Consistent with this, the tax frame led Republican participants to not only consider the cheaper option first but also to generate more supporting evidence for it. By contrast, when the expensive, greener option was labelled as an offset, political affiliation was no longer associated with the order in which options were considered, nor the weight of evidence generated for each option.
A final study tested whether the order in which we consider options really does have a causal role in our decision making. Participants of all political persuasions were instructed to consider the benefits of the greener, more expensive option first, whether it was labelled as a tax or offset. Despite this instruction, 54 per cent of Republicans failed to comply (showing just how averse they were to the ‘tax’ label). However, among those participants who did comply, this instruction had the effect of eliminating the interaction between framing and political affiliation – that is, the Republicans were no longer repelled by the greener, expensive option even when it was labelled as a tax.
‘Policy makers would be wise to note the differential impact that policy labels may have on different groups,’ the researchers concluded. ‘What might seem like a trivial semantic difference to one person can have a large impact on someone else.’
“Smart people make poor decisions because the mental software that we humans inherited from our ancestors isn’t designed to cope with the complexity of modern day problems and systems.”
If you ask people to offer adjectives that they associate with good decision makers, words like “intelligent”and “smart” are generally at the top of the list. Yet, history contains plenty of examples of smart people who made poor decisions as the result of cognitive mistakes. These mistakes can have horrific consequences, from the space shuttle Columbia disaster to the scores of bank failures across the United States since the start of the 2007 recession. But faulty decision making is also avoidable. Every day, research is offering new insights into the decision- making process. A science of choice is emerging, and the good news is that everyone, from students to stockbrokers, can learn how to make better decisions.
Smart people make poor decisions because the mental software that we humans inherited from our ancestors isn’t designed to cope with the complexity of modern day problems and systems. In short, smart people, like everyone else, face two major obstacles to making good decisions. The first obstacle is the brain, which evolved over millions of years to make decisions unlike what we face in modern life. The second obstacle is the growing complexity of the world in which we live.
How to Incorporate the Outside View into Your Decisions
1. Select a reference class- Find a group of situations, or a reference class, that is broad enough to be statistically significant but narrow enough to be useful in analyzing the decision that you face. The task is generally as much an art as it is a science, and it is certainly trickier for problems that few people have faced before. But for decisions that are common — even if they are not common for you — identifying a reference class is straightforward.
2. Assess the distribution of outcomes- Once you have a reference class, take a close look at the rate of success and failure. Study the distribution, including the average outcome, the most common outcome, and check for extreme successes or failures.
3. Make a prediction - With the data from your reference class in hand, including an awareness of the distribution of outcomes, you are in a position to make a forecast. The idea is to estimate your chances of success and failure. For all of the reasons that I’ve discussed, the chances are good that your prediction will be too optimistic.
4. Assess the reliability of yourprediction and fine-tune it - How good we are at making decisions depends a great deal on what we are trying to predict. Weather forecasters, for instance, do a pretty good job of predicting what the temperature will be tomorrow. Book publishers, on the other hand, are poor at picking winners, with the exception of those books from a handful of bestselling authors. The worse the record of successful prediction is, the more you should adjust your prediction toward the mean (or other relevant statistical measure). When cause and effect is clear, you can have.
The High Cost of Low Educational Performance – Via OECD – While governments frequently commit to improving the quality of education, it often slips down the policy agenda. Because investing in education only pays off in the future, it is possible to underestimate the value and the importance of improvements. This report uses recent economic modelling to relate cognitive skills – as measured by PISA and other international instruments – to economic growth, demonstrating that relatively small improvements to labour force skills can largely impact the future well-being of a nation.
Free: Searchable World Government Data – Via Guardian – Governments around the globe are opening up their data vaults – allowing people to check out the numbers for themselves. Now The Guardian has created one single interface to rule them all.
Miguel’s Weekly Favorites:
Video: We feel, therefore we learn: The neuroscience of social emotion. Daniel Siegel - Via SlowTv - Andrew Lo& Robert Merton, Systemic Risk and the Refinancing Ratchet Effect - Via SSRN – The confluence of three trends in the U.S. residential housing market – rising home prices, declining interest rates, and near-frictionless refinancing opportunities – led to vastly increased systemic risk in the financial system. Individually, each of these trends is benign, but when they occur simultaneously, as they did over the past decade, they impose an unintentional synchronization of homeowner leverage. This synchronization, coupled with the indivisibility of residential real estate that prevents homeowners from deleveraging when property values decline and homeowner equity deteriorates, conspire to create a “ratchet” effect in which homeowner leverage is maintained or increased during good times without the ability to decrease leverage during bad times. If refinancing-facilitated homeowner-equity extraction is sufficiently widespread – as it was during the years leading up to the peak of the U.S. residential real-estate market – the inadvertent coordination of leverage during a market rise implies higher correlation of defaults during a market drop. To measure the systemic impact of this ratchet effect, we simulate the U.S. housing market with and without equity extractions, and estimate the losses absorbed by mortgage lenders by valuing the embedded put-option in non-recourse mortgages. Our simulations generate loss estimates of $1.5 trillion from June 2006 to December 2008 under historical market conditions, compared to simulated losses of $280 billion in the absence of equity extractions.
A Story About Motivation – Via Harvard – Because when we consider whether to do something, we subconsciously ask ourselves a simple question: “Am I the kind of person who . . ?” And money changes the question. When the lawyers were offered $30 an hour their question was “Am I the kind of person who works for $30 an hour?” The answer was clearly no. But when they were asked to do it as a favor? Their new question was “Am I the kind of person who helps people in need?” And then their answer was yes.
The decoy effect as a covert influence tactic – Via JBDM – The purpose of this research was to determine whether individuals could use the decoy effect to influence others’ choices. In study 1, undergraduates (n = 50) and executive master’s of business administration (EMBA) students (n = 24) read an employee selection scenario in which they were randomly assigned to prefer one of two candidates that were equal in overall attractiveness, but that had different strengths and weaknesses. They were then asked to choose one of three inferior candidates to add to the choice set that would make their preferred candidate more likely to be chosen by other decision makers. The correct inferior candidate was asymmetrically dominated – dominated by one of the two existing candidates, but not the other. Participants chose the correct decoy candidate at better than chance levels. In study 2, undergraduates and EMBA students (total n = 66) completed a set of four decision tasks, in which they were asked to choose from potential decoy alternatives that would highlight their preferred job candidate or the product they preferred to sell to a customer. Participants again chose the correct option at better than chance levels. When participants provided free-response reasons for their choices, these responses indicated a fairly strong recognition of the influential nature of creating a dominating relationship. Implications for understanding this effect and how it may be used by hiring managers, sales personnel, and others who attempt to influence others people’s decisions at work, are discussed.
Loss aversion in the eye and in the heart: The autonomic nervous system’s responses to losses- Via JBDM – The common view in psychology and neuroscience is that losses loom larger than gains, leading to a negativity bias in behavioral responses and Autonomic Nervous System (ANS) activation. However, evidence has accumulated that in decisions under risk and uncertainty individuals often impart similar weights to negative and positive outcomes. We examine the role of the ANS in decisions under uncertainty, and its consistency with the behavioral responses. In three studies, we show that losses lead to heightened autonomic responses, compared to equivalent gains (as indicated by pupil dilation and increased heart rate) even in situations where the average decision maker exhibits no loss aversion. Moreover, in the studied tasks autonomic responses were not associated with risk taking propensities. These results are interpreted by the hypothesis that losses signal the subjective importance of global outcome patterns.
Lawyers, Guns, and Money: How big banks, powerful lobbyists, sneaky attorneys, and a host of businessmen funnel dirty cash into the US.- Via Motherjones – Among Bank of America’s 50 million customers, Pierre Falcone was far from ordinary. An infamous global arms dealer who unlawfully sold weapons to Angola for its civil war and an international fugitive, Falcone was convicted of tax fraud and illegal arms dealing in 2007 and 2009 and is currently serving six years behind bars. Yet for nearly two decades, Falcone and his relatives freely used 29 different bank accounts to funnel at least $60 million into the US from secretive havens like the Cayman Islands, Luxembourg, and Singapore, and from shell corporations and secret clients. Despite his criminal record and worldwide notoriety, Bank of America essentially treated him like any other depositor.
Economists, Crises and Cartoons- H/T Paul Kedrosky Via SSRN – Economists have occasionally noticed the appearance of economists in cartoons produced for public amusement during crises. Yet the message behind such images has been less than fully appreciated. This paper provides evidence of such inattention in the context of the eighteenth century speculation known as the Mississippi Bubble. A cartoon in The Great Mirror of Folly imagines John Law in a cart that flies through the air drawn by a pair of beasts, reportedly chickens. The cart is not drawn by chickens, however, but by a Biblical beast whose forefather spoke to Eve about the consequences of eating from the tree of the knowledge. The religious image signifies the danger associated with knowledge. The paper thus demonstrates how images of the Mississippi Bubble focused on the hierarchy of knowledge induced by non-transparency. Many of the images show madness caused by alchemy, the hidden or “occult.” Video: How Will You Manage Employment/Unemployment - via Cool Infographics – Loaded with labor statistics, How Will You Manage? is a new infographic video put together by XPLANE for Kronos Workforce Management. Using a mix of statistics, illustrations and some infographics the video does a good job of looking at our changing workforce, and the challenges faced by both companies and employees.
Exclusive Features : (The Must Reads)
Five things you should know about climate change - via Ars Technica – Writing about vaccines, evolution, and even dark matter has ended up setting off contentious discussions here at Ars. But no area seems to bring out impassioned arguments as reliably as climate change. Covering the latest scientific results can bring forth cries of scientific fraud, conspiracies, and denialism; considering policy implications can be even worse. It can be really difficult for anyone not well-versed in the debate to get any sense of the science at all, something that’s clear from the huge gap between the scientific community’s acceptance of climate change and the public’s wariness about the topic. So it’s probably useful to step back from the latest findings, and look at science’s basic understanding of how greenhouse gasses can force climate change, which often gets lost in the arguments.
People are Deciding to Paying Credit Cards before Mortgage - Via Calculated Risk – The percentage of consumers current on their credit cards but delinquent on their mortgages first surpassed the percentage of consumers up to date on their mortgages but delinquent on their credit cards in the first quarter of 2008, according to TransUnion.
Is a Sovereign Debt Crisis Looming? – Via Carnegie Endowment- This US article argues that sustaining growth—not withdrawing stimulus—should remain most countries’ top priority if they are to break the debt spiral
The Counterfeiter: The story of how one of pharma’s biggest enemies was nabbed in Houston, Texas - Via TheScientist – Drugs can pass through a dozen or more hands on the way to the pharmacy and a consumer’s medicine cabinet. The patchiness of the drug distribution network and the absence of a proper paper trail, as investigative journalist Katherine Eban revealed in her 2005 book Dangerous Doses, has allowed unscrupulous middlemen to launder counterfeit medications within the legitimate supply chain that leads to a local pharmacy. Foreign-produced drugs are also illegally “diverted” into the domestic supply chain.
Black Swans, Male Strippers and Uncertainty - Via Big Think – “This too, shall pass.” Folk tales say this was engraved on a ring given to King Solomon, who had demanded a gift that would make him sad when he was happy, and happy when he was sad. I recall it whenever I’m confronted with the claim that history has a positive direction–that, by and large, we’re progressing toward a more peaceful, just and prosperous future. And conversely, too, when I hear someone say we’re on an inevitable path of decline and doom.
British Library to Offer 65,000 Free eBooks - Via OpenCulture – More than 65,000 19th-century works of fiction from the British Library’s collection are to be made available for free downloads by the public from this spring.
Finance & Investing:
Nobel Winner: Robert Merton Lectures – A Functional Perspective on Financial System Design with Observations on Issues from the Financial Crisis - Via NYU – The entire structure you see globally, of the financial system, is largely driven by the fact there’s a true uncertainty. Non-predictability, and it’s significant. And if you look at the most modern parts of finance, or at least what–it’s not so modern anymore, but it’s finance–the whole derivatives area and all the applications that have come out of it, that model succeeded, not just intellectually but in practice, precisely because what it didn’t have is an input.
Tom Barrack’s Latest: Real Estate is Cyclical but the American Dream is Not - Via Colony Capital – Today, the dream has turned into a nightmare and our children and our children’s children will inherit tens of trillions of dollars in debt. We are not concerned with dreaming the dream and working to get there — we are concerned with “living the life” and making sure someone gives it to us. We are in the midst of a populist revolution, which is shifting incentive from opportunity to entitlement. We are having a hard time separating heroes from villains. Yet through it all, the underlying foundation stone of everyone’s dream – be it opportunity or entitlement – revolves around the dream or hope of prosperity, self-fulfillment and ownership. Real estate has always been an inherent part of the American Dream ñ the dream to own a home, a house, a gas station, a bakery, an office, a store. Through good times or bad times, the pureness of the desire has remained steadfast. Only the belief and conviction in how to get it and preserve it has faltered.
This Crisis Won’t Stop Moving - Via NYT – YOU know we’re in trouble when we’re told that the economic problems in Greece, Portugal and Spain, the most indebted countries in the euro zone, are likely to remain safely contained in those nations.
Boech Investment Letter: Global Disequlibria: Don’t expect lasting stability - Our basic view remains unchanged;
we remain positive on equity markets, credit spreads and most commodities because liquidity flows are still very positive and key indicators discussed below are supportive. However, we still are very concerned about the artificial nature of the economic recovery and financial markets and when the relatively benign environment might change for the worse.
Five myths about how to create jobs- Via Washington Post – With the unemployment rate in the United States lingering just below 10 percent and the midterm elections just nine months away, job creation has become the top priority in Washington. President Obama has called for transferring $30 billion in repaid bank bailout money to a small-business lending fund, saying, “Jobs will be our number one focus in 2010, and we’re going to start where most new jobs do, with small business.” The fund is among several measures — tax incentives, infrastructure projects, efforts to increase exports — that the White House has proposed to help boost employment. As Americans consider the various approaches, we must have realistic expectations. We need to debunk some myths about what it takes to stimulate job growth.
Contagion: From Foreign Exchange Research, Barclays Capital – Via Zero Hedge – The key lesson from the ERM crisis of 1992 and the Asian crisis of 1997 is that contagion can emerge quickly and often in unpredictable ways. Unwinding of leveraged positions by distressed market participants, herding behaviour among investors, and loss of liquidity that gives way to general flight to quality can all lead to heightened correlations between markets and, in extremely circumstances, set off a self-filling crisis on a regional/global scale. There have been clear signs over the past week that the distress in the Greek government bond market is increasingly being felt in other euro area countries such as Spain and Portugal. The most likely explanation of this development is the “demonstration effect” – the Greek crisis is likely to have caused investors to re-evaluate the fundamentals of these countries. Spain and Greece may not have strong financial or economic links, but their fundamentals have a lot in common. Weekly List of Insider Transactions - Via Shadow Stock
Lecture: From Poverty to Prosperity: Intangible Assets, Hidden Liabilities and the Lasting Triumph over Scarcity – Via Cato – The discipline of economics is not what it used to be. For years, conventional economists told us an incomplete story that leaned on the comfortable precision of mathematical abstraction and ignored the complexity of the real world. What they left out of the story were the positive forces of creativity, innovation, and advanced technology that propel economies forward. They also left out the negative forces that can hold economies back: bad governance, counterproductive social practices, and patterns of taking wealth instead of creating it. From Poverty to Prosperity narrates and explains the revolutionary reorientation of economics in recent decades toward a new focus on understanding the huge differences in the standard of living across time and across borders. Mixing interviews with the world’s most important economists with their own clear and insightful analysis, Arnold Kling and Nick Schulz have produced an illuminating and thought-provoking guide to what they call “Economics 2.0.” Lecture: MultiMedia at Your Fingertips 2.0 – Boosting the Multimedia Knowledge Transfer: From Research to Products- Via Video Lectures – Opinions, experiences and visions regarding the trends and challenges in multimedia research and knowledge transfer will be presented by internationally well-known academic and industrial experts. A Multimedia knowledge market will concentrate on the demonstrators of multimedia research from TU Delft and its scientific and industrial partners, both national and international ones, and will provide a venue for networking, discussions, meetings and creating new collaborations.
Academic Papers:
Why Does Spain not Have a Policy for Latin America? - Via Policy Pointers – Spanish policy brief argues that since the region is not a priority for the EU, Latin America offers an excellent platform for Spain to develop an independent policy and influence the European agenda
Staying, Dropping, or Switching: The Impacts of Bank Mergers on Small Firms – Via Oxford – Assessing the impacts of bank mergers on small firms requires separating borrowers with single versus multiple banking relationships and distinguishing the three alternatives of “staying,” “dropping,” and “switching” of relationships. Single-relationship borrowers who “switch” to another bank following a merger will be less harmed than those whose relationship is “dropped” and not replaced. Using Belgian data, we find that single-relationship borrowers of target banks are more likely than other borrowers to be dropped. We track postmerger performance and show that many dropped target-bank borrowers are harmed by the merger. Multiple-relationship borrowers are less harmed, as they can better hedge against relationship discontinuations.
Insider Trades and Demand by Institutional and Individual Investors- Via Oxford Journals – There is a strong inverse relation between insider trading and institutional demand the same quarter and over the previous year. Our analysis suggests a combination of factors contribute to this relation. First, institutional investors are more likely to provide the liquidity necessary for insiders to trade. Second, insiders are more likely to buy low valuation and low lag return stocks while institutions are attracted to the opposite security characteristics. Last, the results are consistent with the hypothesis that insiders are more likely to view their securities as overvalued (undervalued) following a period when institutions were net buyers (sellers).
The Current Financial Crisis- Via Sage – It is now clear that the global economy is facing the worst economic and financial crisis since the Second World War. The crisis manifested itself initially in the subprime mortgage market in the US, but quickly spread to Europe; in the breakdown in the market for credit default swaps—a huge, unregulated and thoroughly opaque market; and in the general collapse of the markets for securitised instruments across the global financial system. It was aggravated, most analysts agree, by the initial policy missteps in handling the crisis, including in dealing with the problems at Lehman Brothers, which effectively froze the interbank market.
How Central Bank Policies Affect Global Economies and Markets - Via CFA – The world is more interconnected now than ever before, and as a result, central bank policy affects not only the country’s domestic economy but also the economies of other nations. To have an edge in this environment, investment professionals need to pay attention to global (not just U.S. or even European) central bank policies with an eye, in particular, on Japan, China, and India.
Other Very Interesting Articles:
Brain Dopamine Receptor Density Correlates With Social Status- Via Science Daily – People have typically viewed the benefits that accrue with social status primarily from the perspective of external rewards. A new paper in the February 1st issue of Biological Psychiatry, published by Elsevier suggests that there are internal rewards as well.
Power Of Kindness - Via Dr Deb – Research says that witnessing simple acts of everyday kindness, such as one person giving up a seat on the bus, holding a door open for another, or helping someone pick something that dropped to the floor can promote altruism. This pychological phenomenon that makes us feel great, lifts our emotions and motivates us to do good is called elevation. Witnessing an uplifiting act inspires us to do the same for others. In essence, kindness is contagious. -
World in Chaos and Market Meltdowns, Too Costly To Bear - Via Marketoracle – Though this piece was originally released via our paid research publication – The Investor’s Mind – in September 2006, if not timeless, its contents are certainly applicable to our current markets and economic environment. While we have taken the liberty of updating some of the charts, it is largely unchanged:
