10 Wednesday AM Reads

January 6, 2016 7:30am by

Strap yourself in for another bumpy ride — and our morning train reads:

• How these Chicago firms took on spoofing (Crain’s Chicago)
• The Impact of the Fiduciary Standard on the Finance Industry (A Wealth of Common Sense)
• A Big Victory for Utilities in the Net Metering Battle Over Rooftop Solar (MIT Technology Review) see also The Conservative Case for Solar Subsidies (NYT)
• Significant Contribution: Apple Watches & Cars (Asymco)
• Creativity Is Not An Accident (Scott Berkun) see also When You Should Worry About Failure, and When You Shouldn’t (Harvard Business Review)

What are you reading?

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  1. rd commented on Jan 6

    Re: Western Federal Lands

    The Gold King Mine release was effectively caused by essentially free mining permits with no mine closure plans or funding required. I assume that instituting those types of requirements would also trigger militia occupations as “undue Federal interference with freedom”. http://www.azminingreform.org/content/colorado-mine-release-requires-1872-mining-law-reform

    BTW – “The Man Who Shot Liberty Valance” is available for streaming on Netflix. I suspect that the militia today would support Lee Marvin’s Liberty Valance against Jimmy Stewart’s Rance Stoddard as the theme of the movie is about the cattlemen’s freedom to do what they want without government interference. Meanwhile, The Onion has an excellent ‘splainer on the Oregon standoff: http://www.theonion.com/graphic/what-you-need-know-about-oregon-militia-standoff-52111

    • Iamthe50percent commented on Jan 6

      So what is left as unnatural causes? Alien abduction?

    • rd commented on Jan 6

      Veganism.

    • VennData commented on Jan 6

      Ryan: Obama gun plan a ‘distraction’

      http://www.politico.com/story/2016/01/paul-ryan-obama-guns-217404

      So Republicans can only do one thing at a time?

      Or is it a distraction from tax cuts for the rich?

      It’s so funny how Republicans rehash the same non-nonsensical arguments against policy. Sad how idiots fall for it, but that’s what it means to be part of The Base. Admitting your an idiot.

  3. RW commented on Jan 6

    For my nephews (who don’t listen but will still read a book thank god)

    The Index Card: Why Personal Finance Doesn’t Have to Be Complicated
    TV analysts and money managers would have you believe your finances are enormously complicated, and if you don’t follow their guidance, you’ll end up in the poorhouse.

    They’re wrong.

    When University of Chicago professor Harold Pollack interviewed Helaine Olen, an award-winning financial journalist and the author of the bestselling Pound Foolish, he made an off­hand suggestion: everything you need to know about managing your money could fit on an index card. To prove his point, he grabbed a 4″ x 6″ card, scribbled down a list of rules, and posted a picture of the card online. The post went viral.

    Now, Pollack teams up with Olen to explain why the ten simple rules of the index card outperform more complicated financial strategies. Inside is an easy-to-follow action plan that works in good times and bad, giving you the tools, knowledge, and confidence to seize control of your financial life.

    “The greatest obstacle to discovery is not ignorance — it is the illusion of knowledge.” –Daniel J. Boorstin

    • rd commented on Jan 6

      I read “The One-Page Financial Plan” while on vacation. It is similar in focusing on making it simpler is better. It took me a while, but I figured out a few years ago that complexity is more of a marketing tool for the financial industry than anything else. Especially these days with diversified low-cost target date and target risk funds out there, the average person really can have a simple financial plan that will often be better than a more complex one. The less people understand with their complex financial lives, the more paralyzed they become, as well as being more dependent on parasites.

      http://www.amazon.com/exec/obidos/ASIN/1591847559/thebigpictu09-20

    • willid3 commented on Jan 6

      downsides
      Deflating prices may appeal to the consumer, and may boost consumption in the short-term, but they are associated with savage costs that will quickly catch up with British and European, and potentially even American consumers.

      The reason is as follows: if producers or retailers sell their wares below cost, then they will invariably make a loss on those sales. Their business will become less profitable. The sensible response when a firm is not able to price its goods to make a profit, or to cover costs, is to produce less of what it is unprofitable. In other words: to shrink productive activity. This is done by cutting production, trimming wages and inevitably, laying off staff. Thus the fall in prices, leads to a fall in profits, which leads to falls in wages and to a rise in unemployment. Unemployment means that workers lack disposable income, and find it harder to buy products and services on offer. As a result producers sell even fewer of their already low- priced products or services. Bankruptcies and unemployment rise, while wages and prices fall further, and so the deflationary spiral takes hold.

      Furthermore, the price indices managed by government –in particular the Consumer Price Index (CPI – are used to fix wages in private and public sector wage negotiations. Benefits received by disabled people and pensioners increase (or decrease) in line with CPI inflation. So when the CPI falls, be sure wages and benefits will fall too. (And with a political consensus in the British Parliament promising savage spending cuts in the next Parliament, pensions and other benefits will have to be cut in line with the falling level of CPI, if the proposed extreme spending targets are to be met.)

    • willid3 commented on Jan 6

      upsides for some
      For Whom is Deflation Good?

      Deflation is good for those on fixed incomes, as these will rise in real terms as prices fall.

      Deflation is good for creditors/money-lenders or the rentier class. This is because while prices can fall below zero, interest rates cannot. So while wages or incomes may fall below zero, interest rates (at what is known as the ‘zero-bound’) will rise relative to these falls. If prices fall below zero, say to minus 2% but the interest rate remains at plus 2%, then the real rate of interest rises to 4% in a deflationary environment.

      And while prices, wages and incomes can fall below zero, debts remain fixed, and in relation to falling wages and incomes – rise in value.

      This is why creditors encourage, and even pressure politicians and policy-makers (central bankers and officials) to apply deflationary policies – because deflationary policies protect and even increase the value of their most important asset – debt.

      To repeat: whereas inflation erodes the value of debt, deflation increases the real value of debt.

      So in a deflationary environment, creditors (effortlessly) grow richer as the value of debts owed to them rises (until their debtors default); and debtors with falling incomes find their debts become unpayable.

  5. howardoark commented on Jan 6

    Deflation is excellent news for people on social security, government workers and anyone with a secure job who’s wages are not subject to market place discipline.

    • willid3 commented on Jan 6

      well almost all jobs wages dont change because of ‘market discipline’. the jobs might go away all together. and new employees might get lower wages. but thats about all. as no one who sells any thing that wont get paid off in a few months wants to ever see wages go lower (except for their own employees of course) because if that were to become the ‘norm’ then any of those businesses that sell any thing at all that wont get paid for in a few months will be out of business. permanently. as they will not have any customers any more.

  8. VennData commented on Jan 6

    North Korea Claims It Tested an H Bomb

    http://www.nytimes.com/2016/01/07/world/asia/north-korea-hydrogen-bomb-claim-reactions.html

    You may not remember who the Republicans fought​ the Test ban treaty.

    http://www.history.com/topics/cold-war/nuclear-test-ban-treaty

    Once again The GOP was the wrong side of history, the wrong side of the issue.

    Of course no one knows what the planet would be like if we were conducting hundreds of nuclear tests a year over the last fifty years Maybe Exxon and the Republican donors could pay off some “Climate Scientists” to research it.

    • rd commented on Jan 6

      Cruz’s Canadian birth certificate is fraudulent. It was planted there decades ago by a combination of Trump and Democratic operatives who knew that he might run for President of the United States. The Main Street Media has been complicit in the fraud.

    • DeDude commented on Jan 6

      I thought it was a problem when a candidate presumably was not born in the US. That was presumably what the “birther” case was all about (Obama born outside of US so he couldn’t be president). So why is it not a problem that Cruz was not born in US?

  12. RW commented on Jan 6

    Not the usual article from The Economist.

    Bosom buddies: The surprising story of America’s first boob selfie
    Of the 2m objects in the Metropolitan Museum of Art in New York, one of the most startling is the painting with accession number 2006.235.74. Summoned from the stacks where it lives most of the time, the tiny picture sits on a block of comforting polystyrene, a blue surgical glove on either side acting as a guard of honour. The idealised breasts that are the painting’s centrepiece are even more luminous in the original than in reproductions. Swathed in a furry gauze, they present themselves like a jewel in a box or a bonbon, something secret and sweet, both a revelation and a challenge.

    The picture comes not from Britain, where miniature-painting became especially popular in the 18th century, nor even from France, the home of sensuality. It was painted in puritanical Boston in 1828. ….

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