Bloomberg Review: Matt Levine's Money Stuff

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bryan
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Bloomberg Review: Matt Levine's Money Stuff

Post by bryan » Tue Feb 28, 2017 5:58 pm

https://www.bloomberg.com/view/contribu ... w-s-levine
https://www.bloomberg.com/view/rss/topi ... -stuff.rss

These newsletters have been pretty good and has some discussion-provoking current events. Figure it could be a good, ongoing general thread here?

latest one: https://www.bloomberg.com/view/articles ... edge-funds

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bryan
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Re: Bloomberg Review: Matt Levine's Money Stuff

Post by bryan » Tue Feb 28, 2017 6:00 pm


what caught my eye from the lates one: search for "monopolistic behavior" (also https://www.bloomberg.com/view/articles ... -confusion has some similar comments)

for Buffet buying up lots of shares of competing companies.. in a similar way that index funds do (see links "precisely" and "concern")! We've had discussions on this topic (okay.. that's as much as I wanted to search for.. basically the topic of index fund popularity, efficient market hypothesis, etc) but this discussion always seems to focus on individual investor's expected future return, boring, instead of other effects like de facto cartels forming, a "self-operating anticompetitive influence:"
Matt Levine wrote: > CEO of one airline, knowing that his shareholders are mostly index funds and Warren Buffett, will fulfill his fiduciary duties to those shareholders by keeping prices high and not competing too hard against other airlines, because he knows that his shareholders also own them. (He will, in this theory, be less concerned about the shareholder of limited means who owns shares only in his airline.) If the normal approach is for every shareholder to own every company in an industry, why would those companies want to undercut each other? It wouldn't do their shareholders any good.
Interesting times..

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Re: Bloomberg Review: Matt Levine's Money Stuff

Post by bryan » Thu Mar 09, 2017 11:12 pm

Latest interesting/funny ones below.

https://www.bloomberg.com/view/articles ... and-quants
Here's a story about how Stanford University is trying to fund startups founded by students like Evan Spiegel, who "often hung around the offices of StartX, the school's entrepreneurial hub." Obviously. We've talked before about the recurring fad for financing college education with equity rather than debt, and really Stanford has the opportunity to be a leader in this space. Instead of charging tuition, it could just demand like a 5 percent stake in all of its students' future startups. It's a portfolio model: Classics majors would just get free classics degrees, while the guy who builds the next Snapchat would pay a billion dollars in effective tuition. I actually do not see the downside here. "Adverse selection," you say, but you are wrong; this would probably attract more potential startup founders. Young founders seem to love giving away equity in return for external validation and mentoring. They're as credential-driven as the rest of us, which is why they go to Stanford. Anyway Stanford isn't doing this -- StartX is a more conventional funding/incubator sort of model -- but it should.
https://www.bloomberg.com/view/articles ... tsche-bank
when local laws and Uber's terms of service conflict, which prevails? The local officials assumed, naively, that laws trumped terms of service. But that is antiquated thinking. In the modern era of global technological capitalism, the terms of service need to prevail universally. Otherwise you'd just have anarchy.

I mean, I guess I am kidding, but Uber probably believes that.
...
Does that prevent law-enforcement officials from bringing actions in their official capacity? Hahahaha probably. In any case, it's a valuable lesson for other startups: Make sure your terms of service say "you can't arrest us."
Satellite data... U.S. Securities and Exchange Commission used satellites to catch fraud at a home-builder
https://www.bloomberg.com/view/articles ... dist-camps
Bing!

Here's a story about how quantitative fund firm Acadian Asset Management has "struck a deal with Microsoft Corp. to use its Bing Predicts big data technology to inform its investment decisions."
...
Imagine a social network that was optimized to provide actionable data to hedge funds, rather than one that was optimized for advertising. Doesn't it seem like that would be a more useful network? A calmer one? Advertisers want engagement, reaction, emotion; investors want accuracy.
...
The mid-20th-century dream of the planned economy was that there could be some technological way to just figure out what consumers want and direct producers to supply it, without the mechanism of prices and markets.
Don't do this.
ZTE Corp. will pay $892 million in fines for violating U.S. sanctions in a "six-year-long conspiracy to acquire U.S. technology, send it to Iran and mask its involvement through a network of front companies." Don't do that, obviously, but if you do, probably don't write and preserve a memo weighing the pros and cons:
Lots of companies have periodic email auto-delete functions, though a one day auto-delete is a little aggressive. But the trick is, you don't want to put the auto-delete in after you start doing bad stuff, or particularly after you start being investigated for doing the bad stuff. If you are starting a business today, consider running all communications on Snapchat.

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Re: Bloomberg Review: Matt Levine's Money Stuff

Post by bryan » Fri Mar 10, 2017 8:55 pm

https://www.bloomberg.com/view/articles ... historians
People are worried about unicorns.
We've talked before about how Slack Technologies Inc. self-consciously raises too much money, and then invests the excess in other startups. That is plausibly an arbitrage: Fundraising is too easy for Slack, and too difficult for other startups, so it intermediates their fundraising and pockets the spread.

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Re: Bloomberg Review: Matt Levine's Money Stuff

Post by bryan » Mon Mar 13, 2017 7:42 pm

https://www.bloomberg.com/view/articles ... tcoin-etfs
Layering.
If the SEC is right, these guys didn't just violate the U.S. securities laws; they violated the laws of economics.
(omg, even bloggers and ex-investment bankers like Matt have some sort of respect/expectation for EMH.. :roll: )
No WinkleTF!

Remind me why anyone would need a bitcoin exchange-traded fund? If you're a retail investor and you want to own oil, it is hard. Actual oil is a pain to store; you can't just chuck it in a closet.
...
But, look. If you're a retail investor and you want to own bitcoin, then one of the following two things is true:

1) You can just do it. Bitcoin is an electronic asset. You can buy it on your computer. It doesn't expire. You don't have to store it. Just buy bitcoins.
2) You can't just do it. It's super hard. You have to buy the bitcoins from a weird exchange, and all the exchanges are constantly getting hacked or shut down for money laundering or both.
Coincidentally, I was out shopping for groceries today and spotted a Bitcoin ATM in the grocery store. It was pretty shocking to see! The shop was run by Indians, so my guess is it is primarily for international money transfers, seemingly a better option than western union etc. When the clerk noticed me standing in front of it he started telling me the ATM machine was "over there" and I was like "bitcoin! :) " I played around a little bit and it was pretty snazzy how quickly it had me in a position to buy/sell bitcoins (much faster than an online exchange and bank transfers etc). Basically you type in your cell phone number, scan your driver's license, enter a 2FA SMS code, and choose how you want to send/receive the BTC (quite a lot of options). My main gripe was the intro screen didn't have any sort of FAQ or tutorial running to show people what the hell it is and why they should care. Secondary gripe was the fee seemed to be about 5% from what I could tell (though I now recall it first asked me if I planned on buying more than $800 or so, maybe if I had said yes instead of no it would have been a lower amount).
Your Pension Check May Soon Be Coming From an Insurance Company.
Didn't get past the paywall, though. Seems interesting.

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