The Macro Funds' Big Greek Gamble - Bloomberg View

The Macro Funds' Big Greek Gamble - Bloomberg View

Perhaps the biggest issue for macro funds seems to be an overreliance on narrative. The underlying investment thesis is a story. To work, it must follow a series of twists and turns that unfold in a very specific way, on a very specific timeline. Compare that with value investing, which is much more math-driven because it relies on mean reversion. A reliance on mathematics is also true for quant funds.

And that's the trouble with macro. Large, potentially destabilizing events are unpredictable. Reactions to subsequent chains of unanticipated of reactions and counter-reactions are also inherently unknowable

Your HR Department Is Having an Identity Crisis - Bloomberg Business

Your HR Department Is Having an Identity Crisis - Bloomberg Business

The Way Humans Get Electricity Is About to Change Forever - Bloomberg Business

The Way Humans Get Electricity Is About to Change Forever - Bloomberg Business

The Morning Ledger: Internal Audit Looms Larger Over Finance Departments - btbirkett@gmail.com - Gmail

The Morning Ledger: Internal Audit Looms Larger Over Finance Departments - btbirkett@gmail.com - Gmail



Lending Club and smaller banks in unlikely partnership.More than 200 community banks have signed on to deals withLending Club Corp. despite some inherent risks. Some observers wonder if the community banks are handing a competitor information on customers and making them more likely to go to an online firm rather than a bank branch for mortgages or other financial needs. But the deals highlight how developments in financial technology are bringing together some unlikely bedfellows.

Thoughts from the Frontline - Public Pensions: Live and Let Die - btbirkett@gmail.com - Gmail

Thoughts from the Frontline - Public Pensions: Live and Let Die - btbirkett@gmail.com - Gmail



pension benefits are now absorbing 50% of the Illinois budget for education, and the amount keeps rising every year.

...It is obvious to me that there are no good solutions. Current taxpayers will wind up having to pay higher taxes and/or receive a lower level of services in return for their contributions. That means more potholes, fewer new roads, and less money for education and parks and all those things that make up a city. Or, as Inman noted, the “solution” can come in the form of lower property values. Higher taxes mean the value of your home declines relative to the cost of the taxes. That’s just a fact.

The ultimate losers will be the people who own those properties whose value declines. As Inman notes, there is no way that businesses and households “are going to move into a city unless they are absolutely certain that they will get dollars back for every dollar they spend.” Who wants to move into a city where 50% or more of your tax dollars are used to pay the pensions of people who were working and retiring well before you moved in?

Politics being what it is, the losing groups will be the most diffuse, unorganized ones: taxpayers and property owners. Until they revolt. There will be a backlash. You can only squeeze blood from a turnip for so long before the turnip gets annoyed.

Illinois residents are already getting squeezed. Their state taxes are high and going higher. Their home values may also be high; but, at the very least, growth in the value of those homes is going to slow down. Illinois homes may well lose value in the next few years, and possibly a lot of value.

Put yourself on the other side of the trade. Would you buy Illinois real estate right now? Not unless you can get it at a steep discount. If you’re a business owner, would you expand into Illinois, knowing you and your workers will payer higher taxes for reduced public services?

The answers are obvious, and not just for Illinois. What we see there will be only the dress rehearsal for similar problems in other states with underfunded pensions. They won’t all have the constitutional barrier that is gumming up the works in Illinois, but it won’t be fun anywhere.

When It Comes to Investing, the Web Goes to Waste | Institutional Investor

When It Comes to Investing, the Web Goes to Waste | Institutional Investor

data mining (sifting for available data)

eagle alpha (data mining co. in Dublin)

indeed.com (job searches)

This Former NFL Player's $8 Billion Mortgage Lender Started With a Google Search - Bloomberg Business

This Former NFL Player's $8 Billion Mortgage Lender Started With a Google Search - Bloomberg Business

The Quiet Financial Revolution Begins by Mohamed A. El-Erian - Project Syndicate

The Quiet Financial Revolution Begins by Mohamed A. El-Erian - Project Syndicate

Jamie Dimon, the CEO of JPMorgan Chase, expressed it well in his 2015 shareholder letter, observing that “Silicon Valley” is coming. These new entrants want to apply more advanced technological solutions and insights from behavioral science to an industry that is profitable but has tended to under-serve its clients.

Airbnb and Uber have demonstrated that disruption from another industry is particularly powerful, because it involves enabling efficiency-enhancing structural changes that draw on core competencies and strategies that the incumbent firms lack. Many other companies (for example, Rent the Runway, which provides short-term rentals of higher-end fashion) are in the process of doing the same thing. Be it peer-to-peer platforms or crowd-funding, outside disruptors already are having an impact at the margin of finance, particularly in serving those who were previously marginalized by traditional firms or had lost trust in them.

The end result will be an industry that serves people via a larger menu of customizable solutions. Though traditional firms will seek to adjust to maintain their dominance, many will be challenged to “self-disrupt” their thinking and operational approach. And, while emerging firms will offer better services, they will not find it easy to overcome immediately and decisively the institutional and regulatory inertia that anchors traditional firms’ market position. As a result, a proliferation of financial providers is likely, with particularly bright prospects for institutional partnerships that combine the more agile existing platforms with exciting new content and approaches.

Read more at http://www.project-syndicate.org/commentary/financial-services-revolution-by-mohamed-a--el-erian-2015-06#MFq5b31oc4yVdQ0q.99

Why America's $2.9 Trillion Medical Industry Still Runs on Paper Payments - Bloomberg Business

Why America's $2.9 Trillion Medical Industry Still Runs on Paper Payments - Bloomberg Business



...It's recently set up ways for patients to pay online too, and is experimenting with discounts for those who settle their bills quickly. John Salzberg, the hospital's vice president for revenue cycle, calls it a win-win. "Anything that we can do to help make the process of understanding and paying their bills easier for our patients is good for them and good for us also," he says. Only the post office loses.

Student-Loan Refinancing Boom Could Cost U.S. Taxpayers Billions - Bloomberg Business

Student-Loan Refinancing Boom Could Cost U.S. Taxpayers Billions - Bloomberg Business



Lendkey Technologies Inc.
since better-quality borrowers have no logical reason to stay put and subsidize others, said Vince Passione, founder of Lendkey Technologies Inc., which connects students online with private student-loan lenders. In April, an affiliate of Apollo Global Management LLC, billionaire Leon Black’s private-equity investment shop, said it plans to invest $1 billion in refinanced student loans through LendKey.

A company called Earnest, which started online student-loan refinancing in January

The Three Seismic Shifts That Are Shaking Up the World of Energy - Bloomberg Business

The Three Seismic Shifts That Are Shaking Up the World of Energy - Bloomberg Business

2) China's energy slowdown

China -- the motor of global energy demand since the turn of the century -- is trying to change course. A slowing economy and shift away from heavy industry meant 2014 saw energy consumption grow just 2.6 percent, less than half its recent average and the smallest increase since the Asian crisis of 1998. The country's energy intensity -- the amount of fuel it needs to consume to generate each dollar of GDP -- is getting closer to U.S. and European levels.

If, and BP says it's quite a big if, China keeps a lid on new steel mills and cement factories, it'll have a big impact on global demand in the years ahead. 

Japan's Peter Pan Problem - Bloomberg View

Japan's Peter Pan Problem - Bloomberg View



Unless Tokyo acts faster to lift living standards, Japan will never achieve Kuroda's desired escape velocity. My advice would be for Kuroda to talk less to the Japanese masses, and try to work some magic with Abe's government. Until the government does its part by loosening labor markets, lowering trade barriers and creating tax incentives to support entrepreneurship, Kuroda's yen printing won't save the day.

Too Cool for School Facebook last year hired an 18-year-old intern for a full-time position.

The 10-Point: My Guide to the Day's Top News. - btbirkett@gmail.com - Gmail

Too Cool for School The college dropout-turned-entrepreneur is a staple of Silicon Valley mythology. Steve Jobs, Bill Gates and Mark Zuckerberg all left college. Dropping out of school to start a company is a badge of honor there. But few dropouts become tycoons. “Failure” today often means going back to school or a six-figure job at a big tech company. Many tech companies welcome young talent, and don’t require employees to have a college degree. “It’s almost a bigger risk to stay in school and let people like me drop out and start things before you have a chance,” says one dropout. Facebook, Google and others offer internships to teenagers: Facebook last year hired an 18-year-old intern for a full-time position.