10 Monday AM Reads

Welcome back to the workweek: Tsipras is tweeting, China down $1.2 trillion in market cap, is now officially in a Bear market, and we have your prime cut, dry-aged morning train reads:

• Estimating Crash-Risk Potential For The US Stock Market (Capital Spectator)
• How Much Do Silicon Valley Firms Really Earn? This year, earnings of a dozen big technology companies will be overstated by more than $16 billion. Why doesn’t anyone care? (Barron’s)
• Oh, Snap! The Wit, Wisdom, and Unapologetic Vitriol of Carl Icahn (Bloomberg)
• Greece: It’s Time (And It’s Going To Be Okay) (Behavioral Macrosee also Some stuff you should know about Greece before you lose your mind (TRB)
• The U.S. computer industry is dying and I’ll tell you exactly who is killing it and why (I, Cringelysee also Face It, Your Brain Is a Computer (NYT)

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  1. rd commented on Jun 29

    Why markets are plunging in response to Greece. It turns out that economists actually believe that politicians are competent and won’t do stupid things. They base their economic analyses on this and are then surprised when political incompetence emerges. Clearly, economists don’t read (or understand) history books or newspapers. Anybody thinking that Europe, especially Greece, has historically operated based on cool, rational thought is delusional. It appears that analyses of the Greek crisis have been done based on Thaler’s “econs” running the show instead of “humans”, especially nationalistic humans.


  2. rd commented on Jun 29

    Re: The US computer industry is dying

    Dilbert covers this topic comprehensively once a day. If corporate executives are not reading Dilbert daily, then they are missing out on the pulse of their companies. One of the objectives of CEOs should be to avoid having their companies do something covered in a Dilbert cartoon. However, Scott Adams became wealthy precisely because CEOs are constantly creating new material for his cartoons.

    • willid3 commented on Jun 29

      they along with just about every other CEO in every industry. have created more than enough material to keep Dilbert in material for centuries

  3. RW commented on Jun 29

    Arguing a causal relationship in the absence of correlation presents certain challanges but that assumes additional facts not in evidence; e.g., that the goal was to understand (or be honorable) rather than, say, maintain status and control.

    There is no correlation between austerity and debt reduction

    If anything, slightly positive.

    • willid3 commented on Jun 29

      well it was only implied that it would. because


      as family has to cut spending when its debts are too high?

  4. DeDude commented on Jun 29



    “Foreign banks loaned just over $46 billion to Greek banks at the end of 2014. That compares to $300 billion in 2010”

    In other words the banksters managed to transfer $250 billion of their losses onto the public. So I guess now we can shut down Greece because the plutocrats will not suffer any substantial losses. Instead those same plutocrats are now flush with cash so they can move into the fire-sale season to rob and rape the country once again.

  5. RW commented on Jun 29

    It’s Monday and a certain WaPo columnist is still confused about the economy and misinforming his readers …again.

    Robert Samuelson Wants Us to Worry Based on New BIS Report

    The Bank of International Settlements (BIS) issued a new report warning of the dangers of low interest rates. Robert Samuelson wants us to take these warnings very seriously, effectively saying that another crisis could be around the corner due to the recent build up of debt.

    First, it is worth noting that warning of disaster due to expansionary monetary policy is what they do at the BIS, sort of like basketball players play basketball. …

    The second point is that the rise in debt in a time of low interest rates is to be expected for two reasons. ….

  6. rd commented on Jun 29

    Its interesting that a direct vote by the Arizona voters does not constitute the “will of the people” but gerry-mandering by their elected officials would in the eyes of the four most conservative justices. As far as I can tell, Thomas, Scalia, and Alito have an elitist view of the Constitution where elected officials and the wealthy have more clout than the actual voters. Roberts seems to have more malleable interpretations, although it appears he is in the elitist camp with an overlay of political pragmatism.


    • willid3 commented on Jun 29

      well they are throw backs to the 19thcentury and before justices., its like that scam that we need to remove the amendment that made it so that we the people elect our senators. some thing about the states need to have representation. course one could wonder why that is. since the state is also a owned by the people. and i think is that foolish states rights nonsense. its actually states responsibilities . but i can see why they dont want to say that cause that would mean they would be responsible for how things are on their state. some thing most of them dont care about

  7. Concerned Neighbour commented on Jun 29

    Wow, US “markets” down a whole ~2% from all-time highs? Quite the panic we’re witnessing. It’s only a matter of time before we start trying to eat our Ipads to survive.

  8. Willy2 commented on Jun 29

    “US computer industry is dying”:

    I don’t fully agree with the article. From 1980 onwards stockmarkets continued to go higher making it more interesting for shareholders to demand compensation in stocks. It’s simply a combination of rising stockmarkets & the way the US tax system works. Think capital gains tax of 15% versus a higher rate for wages.
    The CEOs wanted to squeeze every penny out of their companies to push stockprices higher. No matter what the cost was for their workers and for the companies. And thereby undermining their companies.

    Blaming that on that paper written by Jensen & Meckling is outright absurd.

    • Crocodile Chuck commented on Jun 29

      You have obviously never worked for any corporation that has outsourced its IT to IBM.

    • willid3 commented on Jun 29

      well if you dont invest in the company, in an industry like tech, the company will die. just like Poloroid did, and like Kodak for the most part did. and the only absolute mandate on management is to not go bankrupt, and do whats best for the company, irregardless of what stock holders want. cause in the end they really dont want to loose all of their money in a bankruptcy which they will . and wages are a tax write off, companies can deduct that from taxes. along with almost all of their other labor expenses.

      and there is that other tidbit

      most CEO’s get stock as part of their compensation. so they have a personal reason to push stock prices higher. even of in the end the company collapses. like say a few of those banks where they ignored all the rules about under writing. setting up the bank to be sold off.

    • rd commented on Jun 30

      Polaroid, Kodak, Xerox, etc. committed ritual suicide by refusing to invest in products that would compete with their main product lines. Instead they allowed other people to invest in those new product lines instead………

    • willid3 commented on Jun 30

      my point was they decided to not invest in their business, and eventually they became irrelevant and now history

  9. Mbuna commented on Jun 29

    Regarding Computer Industry-
    Seems to me this article is on target, on the one hand, and yet irrelevant on the other. We can all point out how stuff used to be in the 20th century in terms of how business was conducted and how it worked better. This article is absolutely true from that perspective. The problem I have with it is that even though if all corporate executives took this article to heart they would be smarter and their business would be better for it, there is zero possibility of that happening and why that is so is what really needs to be examined.
    First off, corporate raiders won the war- they demonstrated that obscene amounts of money could be made relatively quickly and simply even though the net effect of their actions was the effective destruction of many businesses. This set up the new paradigm of western capitalism. The whole “shareholder value” meme became a means to an end and that end is the enrichment of corporate executives. So you tell me why any corporate executive should worry about the longer term health of his company when he can just jump ship to the next company and make another killing after his current one starts going down in flames. The net effect of this action is the stratospheric rise of the elites and this trend is not going to end anytime soon because all of this is applauded throughout the corporate world which includes all the mass media who are under corporate control. Everything is seemingly conspired toward this end even though it will result in much destruction and much grief throughout the world and is ultimately not sustainable. You cannot turn back the clock- too many people need a slap in the face over this issue. Ultimately this is a cultural and a corporate cultural issue and you are not going to get the heads of some IT companies to make some decision that results in sustained longevity for his company when the other option on the table results in his personal enrichment. In this 21st century world of international corporations (and the growing trend of corporate political power) it doesn’t matter if US companies get destroyed as the executive can just move elsewhere. So while all the points in the article ring true, it will do nothing to effect the trends in place.

    • willid3 commented on Jun 29

      it is true that the companies are killing them selves. but also true it wont change as thew stigma of failure for executives is no more. it used to be that layoffs were a sign of bad management. not any more. and that going bankrupt was a sign of bad management. not any more, its now a tactical choice used to break your employees.

  10. willid3 commented on Jun 29

    does this not make the claims about the market fixing health care a scam?

    if a doctor (as a patient) and a spouse (also a doctor) along with about 14 other doctors cant make an informed timely decision about health care, how in the world is the retail clerk with nothing beyond high school suppose to?

  11. CD4P commented on Jun 29

    Hey!!!! CNBC’s ratings have likely spiked .000000003% today!!!!

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