Paul Kedrosky's Infectious Greed

Twitter Digest: 2011-11-22
How We Were All Misled
The Umbrella Man
Going Public Decreases Innovation

Twitter Digest: 2011-11-22

Posted: 22 Nov 2011 12:00 PM PST

Interview with Canada's ex-PM Chretien: We could have been Greece of today http://t.co/1PcqsTGU #
Huge congrats Chris! RT @cdixon: This happened: http://t.co/84iv3oW8 Thanks to everyone at hunch and nyc tech community. #
David Frum on the GOP's Lost Sense of Reality – http://t.co/jE90TyGT #
Riotous recent events in OWS and failure of debt supercommittee are handy clip 'n' save downbound moments for future historians. #
Video … RT @dkoneill: Worth watching, candid Steve Jobs at Next http://t.co/UcufC0KZ #apple #stevejobs #
Martin Wolf: How Iceland survived the fire: http://t.co/PCNTeQn5 #
RGE: Italy Past Point Of No Return http://t.co/mETIONir #
Salesforce stock off another 6.6% today (in an admittedly awful market). Wish I had shorted more way back when. #
Is Bloomberg out to dominate the world? Newsweek answers: http://t.co/oFWkv4ZH /via @DRossingh #
Excellent new Cembalest of JPM on our energy delusions. Here is his list of broken dreams – http://t.co/krqMNgSl #
I just had a nice conversation via email with Bloomberg help desk about merits of cubic splines. My geeky work here is done. #
Bloomberg: 10% of all hedge fund capital raised this year went to single fund, Winton Capital #
Bloomberg: AT&T tells customers of "organized and systematic" hack event. [Insert ATT dropped call joke here ________] #
What we really is a long-only Tuesdays fund. http://t.co/KIvV29Sb /via @EddyElfenbein #
Somewhat stretched argument, but interesting data: Low U.S. Birth Rate May Prolong Housing Slump – http://t.co/qcCiql5t #
Google Gmail IOS app is a cross between awful, maddening and great. #
.@niccai No, but something else is newly sucking my battery dry on iPhone 4. Wish I knew what. #
Since upgrading to latest IOS my iPhone 4 batt life has been shit. I thought that was 4S issue only. #
Driving in La Jolla Cove midday is an augury of what octogenarian-clogged US roads will be like in 2030. So many turn signals always on. #
Worrisome behavior from an oligopolist: Saudi Aramco CEO urges more action on renewables: http://t.co/jBVkJXX1 /via @drgrist #
Any day when you get to use "wackaloonishness", "Dr Moreau", and "libertarian" in same email is a good day. #
Read "Revolutions that Made the Earth" during my Europe & back trip last week. Complex, but recommended. http://t.co/MxCegMoS #
I want to see a website game called "ETF or Pharmaceutical?" where have to guess about names like Pelax. #
Holy visualization. RT @anshelsag: @pkedrosky You see this? Its just epic in scale… http://t.co/QZvdrxzJ #
What to do with unused contact lenses? Turns out you can't sell them on Ebay, etc. Switched brands, and now have extras. #
Apparently the viz is available. RT @nazarioz: or just purchase the posters, which Randall Munroe is selling in 2 sizes, on Amazon. #
The Saudis have reached a goal that they haven't set, but not a goal that had set. Victory! http://t.co/qqr29oTt #
S&P and Moody's reaffirm U.S. credit rating. Whew. #
Schadenflyingfreude RT @flightstats: Significant flight delays #DFW #DAL #STL updates http://t.co/fNfnQlO1 #
What is this "phone"? RT @CathleenRitt: We will learn who killed Natalie Wood before we get @pkedrosky on the phone #
Me too RT @interfluidity: I wish I disagreed with @edwardnh. http://t.co/INiRng1f #

How We Were All Misled

Posted: 22 Nov 2011 11:34 AM PST

John Lanchester in LRB:

The evidence is clear: it is easy to mislead people about money, and easy to lead members of the public astray both individually and en masse, because when it comes to money, most of us, most of the time, don't know what we're doing. The corollary is also clear: the whole Western world misled itself over debt, and the road back from where we are goes only uphill.

via How We Were All Misled by John Lanchester | The New York Review of Books.

The Umbrella Man

Posted: 22 Nov 2011 11:27 AM PST

Wonderful short video work from Errol Morris on JFK and the “umbrella man”. Such loveliness.

Going Public Decreases Innovation

Posted: 22 Nov 2011 07:53 AM PST

I’m generally skeptical of using patent data to measure innovation, but this is still an interesting paper on the relationship between innovation and going public. By this measure, going public reduces innovation. [-]

Does Going Public Affect Innovation?

Abstract

This paper investigates the e§ects of going public on innovation. Using a novel data setconsisting of innovative firms that filed for an initial public offering (IPO), I compare the long-run innovation of firms that completed their filing and went public with that of firms that withdrew their filing and remained private. I use NASDAQ fluctuations during the book-building period as a source of exogenous variation that affects IPO completion but is unlikely to affect long run innovation. Using this instrumental variables strategy, I find that going public leads to a 50 percent decline in innovation novelty relative to firms that remained private, measured by standard patent-based metrics. The decline in innovation is driven by both an exodus of skilled inventors and a decline in productivity among remaining inventors. However, access to public equity markets allows firms to partially offset the decline in internally generated innovation by attracting new human capital and purchasing externally generated innovations through mergers and acquisitions. I find suggestive evidence that changes in firm governance and managerialincentives play an important role in explaining the results.

Full paper here.