“Using what he calls the “careless and piecemeal” data of wealth reports, Mr. Piketty calculates that today the richest 1 percent owns about half the planet’s wealth…
According to Mr. Piketty’s calculations, the immutable dynamic of returns on capital being greater than the rate of economic growth will concentrate half the planet’s wealth in the hands of the richest 0.1 percent within 30 years, impoverishing not only the middle, but also the upper-middle classes.”—
I would like to ask Mr Reyburn, and the NYT: where, exactly, in his book, or elsewhere, does Piketty make these statements?
I have not read all of Piketty’s book, and it’s hard to prove a negative. But I don’t think Piketty ever attempts to quantify global wealth inequality: it’s hard enough just to get reliable figures on a national basis. And I’m all but certain that he never extrapolates anything to the point at which the richest 0.1% end up with 50% of the wealth. Neither would he consider such an extrapolation to constitute an “immutable dynamic”: after all, his entire final chapter is an explanation of why such dynamics are not immutable.
Reyburn’s claims, then, would seem to be narrowly false: Piketty does not say what Reyburn says he says. They’re also broadly false: nowhere does Piketty paint some dystopian vision where the upper-middle classes have become “impoverished”.
On top of that, Reyburn also violates the NYT’s policy of adjusting all prices for inflation. He talks about a Leonardo bought in 1914 for $1.5 million: what’s that in today’s money? Reyburn never says; he waves only in the direction of an analysis which said that the purchase was a record price, in real terms, in 1961. Has the record been broken in the last 53 years? Maybe if Reyburn did the math, we could work that out!
All in all, this is shoddy stuff from the NYT. Or, is it from the NYT? Officially, the NYT has merged with the IHT, and they’re now a unified news organization. In practice however, stories like this still feel as though they’re IHT pieces, which wouldn’t see the light of day had they gone through editing in NYC. Is a double standard still in place?
“I was given my first story to check. I vaguely remember that it was something about new mutual fund products, and it was written by a freelancer. It sounded good — that is, until I started checking it. In essence, the entire thing was wrong. Up until that point, words on the page, in their unambiguous black and white, had always conveyed such authority that I didn’t question them. I never read that way again. An editor once said to me that good writers were really dangerous because you could be so seduced by their writing that you simply drank in their unsupported leaps of logic.”—
Carlo, a student at the University of Kent, sent me some questions for the thesis he’s writing. He said I could blog my answers, so:
1)Has contemporary art become just a commodity? Do buyers see art purchases mainly as an investment?
No; no. At the very highest end (think Warhol, or Richter) contemporary art can sometimes approach the status of a commodity. But the overwhelming majority of contemporary art is not a commodity, nor is it seen as such. And while some buyers see some art (again, we’re talking mainly about the richest buyers here, and the most expensive art) as an investment, most buyers do not look at it that way. Despite the fact that many dealers and auction houses are encouraging them to do so.
That said, if you’re spending hundreds of thousands of dollars on an art work, you’re generally going to want some kind of assurance that it has a decent chance of keeping its value, or even perhaps rising in value. Dealers in large part compete on the degree to which they can convincingly answer that question in the affirmative.
2) About the current health of the market. In 2013 auction sales were down in China (10%) and the UK (over 5%), but in America increased of 14%. In the beginning of 2014 auction sales picked up again, it seems. Christie’s evening auction in London, for instance, did 40 millions more than the previous year. Is this a sign the market is doing well? And what about the middle market that is never mentioned in the news? And private sales?
The market is very healthy right now — healthy to the point of feverish, you might say. But most of the market, as always, at least in dollar terms, is at the very top end. You don’t hear about the “middle market” because it’s never much of a market to begin with. Private sales are the same way: there is a small number of dealers doing very well by selling a small number of extremely expensive artworks. Art isn’t a middle-class thing any more, and if you’re trying to make money by selling to the middle classes, you’re struggling.
3) In an article on your blog “Is the end of the art-market bubble?” you state there is an ongoing bubble. What are the signs which make you think there is one? And is this bubble becoming/will become eventually a speculative one?
Flipping, mainly; it’s a bearish, toppish sign. Where there are flippers, there are speculators. And art dealers, of course, have always been speculators. The question is whether the flippers and the speculative dealers have become the marginal price setters. They probably have in Oscar Murillo, but have they in general? I’d say not yet.
4) What role auction houses play in creating this bubble? Are they to blame or other actors of the market for creating it? And does the practice of leverage or “on-credit” purchases help to inflate the prices?
Auction houses love bubbles: that’s where they make the big bucks. So they try very hard to get the biggest baubles to sell, and to get the most avaricious buyers to bid up to and beyond their means. If it were entirely up to the auction houses, of course, there would always be bubbles in every asset class. So they can’t do it on their own. But they can add fuel to the fire.
5) Do big prices influence the cultural value given to an artwork?
Yes, especially in contemporary art. There are exceptions, but in general if you find an artist getting big prices, that artist is going to have a lot of cultural cachet.
Tom Keene: What is the direct evidence you have that this gentleman changed the technology world with this cryptocurrency?
Leah Goodman: I connected all these dots through. Through forensic research. And forensic research isn’t about supporting what you think is true. It’s about eliminating what you think a candidate may or may not represent. All you’re doing — I want to make this really clear right now — you’re eliminating candidates. We cannot eliminate this man at all. And in my confrontation with him, he confirmed his involvement. End of story.
Tom Keene: Is that journalism? Where you’re working on a Type 2 construct, where you’re pulling away, to “we’ve eliminated these other people”? But, there could be other people out there that you could do the same action with, right?
Leah Goodman: You could go off on the other way, and say “let’s find reasons to support a person”. But the best way to do forensic research is to eliminate people, not the other way around. You don’t say “I have a conjecture, let me find every way to support it”. No.
The Nest thermostat is a great product. But there are two software updates it could really do with.
One of the best features of Nest is “auto-away”: when you’re not at home, it turns the energy down. (Which, in the winter, means your house gets colder.) And the best feature of Nest is that it can be controlled remotely: when you’re on your way home, you can turn the energy back up, so you arrive to a nice warm house.
The problem is that the two features end up working against each other. If you’re not at home, you can set the thermostat to “Home” remotely, and it will spring to life — briefly, before it realizes that you’re not actually at home after all, at which point the auto-away kicks in. The result is that when you arrive, your home is not warm, and you have to wait a couple of hours (if you have a slow radiator system, like I do) before it becomes comfortable.
The solution here is easy: when a user switches the Nest from “Away” to “Home” remotely, then allow the home to warm up without the auto-away kicking in. How hard can that be?
Heating devices (boilers, etc) normally work — but, sometimes, they don’t. When they stop working, that’s bad news. Everybody wants to be alerted as quickly as possible when the boiler isn’t working.
Nest could do this quite easily. Sometimes, it will be trying to heat the house, but the house won’t be getting any warmer. Or sometimes the thermometer in the Nest will show that the temperature in the house has dropped below the minimum setting. In those cases, Nest should send out a simple email alert, saying “hey, there might be something wrong with your heater”. This would be very useful!
“I think for a number of decades, there was this very odd recruiting climate where Wall Street and consulting firms became the default option for students at good schools who didn’t know what they wanted to do after graduation. If you knew you were going to be a doctor, but you didn’t feel sure about your options, Wall Street was an incredibly enticing option. It created a generation of accidental bankers, and some of them did the wrong thing. I think now what you’re seeing with the competitiveness is the people who became bankers, they really want to be bankers. And I think that’s a good thing because it’s better for the banks and the rest of the economy to have people who are talented.”—
I think Kevin Roose is exactly wrong here. Maybe The Epicurean Dealmaker can explain why?
What do you need to do to get banned from the World Economic Forum? Massacre protestors in the street, just 974 miles from Davos? That’ll do it. But so, it seems, will phone hacking: Rupert Murdoch, along with all other News Corp executives, is persona non grata this year. While the Forum does provide credentials to journalists from the WSJ and Dow Jones, no News Corp executives are here. It’s far from clear when or whether they might be invited back.
In terms of technology use, “I treat a trip to Davos like a trip to China”, says one veteran delegate, adding that every time he returns from Davos, he finds that his computer has been hacked. This is probably no surprise. Everybody uses the same unencrypted wifi system, the delegates constantly type email passwords into open computers, flash drives are everywhere, and the Forum even explicitly discourages media organizations from setting up their own internet connections, on the grounds that they “interfere” with the WEF’s own IT. Given the power and influence of the people who attend, it would be surprising if everybody from the NSA to China weren’t engaging in massive cyber-spycraft this week.
Consequences for Society, Politics and Business Profound political, economic, social and, above all, technological forces are transforming our lives, communities and institutions. Rapidly crossing geographic, gender and generational boundaries, they are shifting power from traditional hierarchies to networked heterarchies. Yet the international community remains focused on crisis rather than strategically driven in the face of the trends, drivers and opportunities pushing global, regional and industry transformation.
“The Reshaping of the World: Consequences for Society, Politics and Business” is therefore the thematic focus of the World Economic Forum Annual Meeting 2014. Our aim is to develop the insights, initiatives and actions necessary to respond to current and emerging challenges.
It’s a whether vs what thing, basically. Or, to put it another way, it’s a real-world application of Buridan’s ass.
In the case of gifts, there are certain occasions (birthdays, weddings, Christmas) which are associated with strong societal pressure to give something. What you give is, in general, much less important than that you give. So it’s actually societally OK to give a crappy present: “it’s the thought that counts”.
Tattoos are more interesting. I’ve wanted a tattoo for quite a long time, but I’ve always been paralyzed by indecision about what tattoo to get. It’s so permanent, I set the bar extremely high — and end up with nothing, when I’m pretty sure I’d prefer something to nothing. Call it FOFR — fear of future regret — almost the opposite of FOMO.
When I see happily tattooed people, it’s obvious that they’ve made a simple determination — that a tattoo (or a lot of tattoos) is better than no tattoo, and that therefore they should simply go ahead and ink up. That doesn’t mean it makes sense to get an ice-cream cone tattooed on your face. But let’s remain within the realm of general common sense here, and I’m quite happy that the world’s skin is getting more colorful and interesting.
Just as I’m happy that people keep on giving each other gifts at this time of year. The deadweight loss involved notwithstanding.
“Each of these activities (listening to high end audio gear, drinking high end wine, having needles inserted into your chakras) is really about ritualizing a sensory experience. By putting on headphones you know are high quality, or drinking expensive wine, or entering the chiropractor’s office, you are telling yourself, “I am going to focus on this moment. I am going to savor this.” It’s the act of savoring, rather than the savoring tool, that results in both happiness and a longer life.”—Placebo-philes — Anxious Machine
“Joanna Coles, who runs Cosmo, is a dynamo. She is the future of fashion,” he enthused, unprompted. “She’s got a pizzazz about her and an edge that is exactly what you need in that business. I’m a big fan.”
Bloomberg is less of a fan of youthful, experimental fashion — the city’s efforts to aid emerging designers notwithstanding. “You have all these new fashion people that you and I have never heard of, doing things that I don’t like. I don’t think they are real fashion,” he scoffed, proffering his preference for Establishment labels like Oscar de la Renta, Carolina Herrera and Ralph Lauren. “But that’s what our parents said about our stuff and what these people will say about the next generation,” he allowed philosophically.
Michael Wolff has a weird column about Business Insider today. (Near the top, he says that Henry Blodget can be seen “at nearly every industry cocktail party”, which is hilariously wrong, Blodget hates going to such things, and almost never does.)
Wolff also back-of-the-envelopes some ad-revenue math:
Blodget recently told the Financial Times that Business Insider’s revenue will be “close to” $20 million this year…
Let’s assume that “close to” $20 million is more like $17 million and that a few million of that comes from conferences, its low-margin, hard-work new area of business that Business Insider has been recently bragging about. So figure perhaps $14 million from its core advertising base.
BI's 10 million uniques likely yield something near 40 million page views a month, which would be a $3 CPM (cost per thousand views), hardly setting even the abysmally low online CPM world on fire. In fact, comScore tends to undercount by almost half, so it could be more like 20 million uniques with 80 million page views and a CPM across the site of $1.50.
Let’s grant Wolff’s assumptions, silly as they may be. And let’s put to one side that he uses the term CPM (the cost to an advertiser of 1,000 pageviews) when he means RPM (the revenue to a publisher of 1,000 pageviews). The difference, of course, is that you can get more than one ad per page.
In any case, if you have 40 million pageviews per month, that’s 480 million pageviews per year. Now, let’s say you have advertising revenue of $14 million per year. Then you’re getting revenue of $14 million per 480 million pageviews. Divide both numbers by 480,000: that’s the same as $29 per thousand pageviews. Not $3. Wolff’s off by an order of magnitude.
Similarly, if Business Insider is getting $14 million from 80 million pageviews a month, that works out at an RPM of about $15, not $1.50.
Now I have no idea what Business Insider’s revenue or pageview numbers are. But I do know bad arithmetic when I see it. And Wolff’s arithmetic reminds me of nothing so much as Mary Meeker’s, back in 2007. Except in Wolff’s case, of course, it’s unreasonably bearish, rather than unreasonably bullish.
“Why does Steve Ballmer keep making critical executive decisions that effectively tie the hands of his successor? First the reorg, then Nokia, then Microsoft’s financial reporting structure, and now employee compensation. These are not small decisions! Each of them goes to the core of how a CEO can truly impact and shape a company, and I find it borderline scandalous that Ballmer is making said decisions as a lame duck. It certainly gives credence to the idea that leaving was not his idea, and he’s hoping to get his last licks in before he goes.”—Microsoft kills stack ranking | stratēchery by Ben Thompson
“*The sentence “Few motorists would dare blow through a red light, even if it appeared safe to do so” has been removed from the second paragraph. A 2000 report indicates that drivers in New York City run 1.23 million red lights each day, which is more than a few.”—
Nick Lemann, the former dean of Columbia Journalism School, has a monster 10,000-word profile of Mary Jo White in the latest New Yorker, which has the most legendary fact checkers in the business. So why does it contain pretty basic errors of fact?
In 2004, the commission permitted the big brokerage houses to take on a much higher level of debt. The firms quickly began borrowing at possibly ruinous levels, which made them feel the effects of the crisis even more acutely.
Dark pools are not unregulated. They are very regulated, as anybody who runs one will tell you. And all trades in dark pools are disclosed and recorded, just like trades on any other exchange.
And then there’s this doozy:
In 2000, the S.E.C. permitted stocks to be traded in pennies or fractions of pennies, rather than the customary eighths or thirty-seconds of a dollar. That made it easier for traders to make money by placing very large orders for very small variances in the price of a stock.
Nothing trades in fractions of pennies, at least not if it’s trading at over a buck a share. And decimalization didn’t make it easier for traders to make money, it made it harder for traders to make money.
I’m not sure what to make of all this, except to say that the New Yorker really doesn’t get finance. And/or, Lemann gets special dispensation to be a tourist in worlds he doesn’t really understand, and that because of his stature, he doesn’t get the extra scrutiny that such writers require.
“No purchaser of a sovereign debt instrument today does so in the hope and expectation that when the debt matures the borrower will have the money to repay it. The purchaser does so in the hope and expectation that when the instrument matures the borrower will be able to borrow the money from somebody else in order to repay it. This is a crucial distinction. If by sovereign creditworthiness we mean that a sovereign is expected to be able to generate enough revenue fromn taxes or other sources to repay its debts as they fall due, then most countries are utterly insolvent.”—[no citation. yet.]
“When Blue Smoke opened, I wrote a tough review. Danny Meyer’s kids go to the same school as mine, so Meyer comes up to me and puts out his hand, and says, “I just want you to know that was a very helpful review and we’re going to do better next time.” So that’s how the Meyer Hospitality Group handles a situation like this. Other restaurateurs have different methods.”—‘You Guys Are Done’: Adam Platt Gets 86’d from ZZ’s — Grub Street New York
“If MIT’s Sociology Department has the highest public profile of any unit within the university, then it stands to reason that it must exist. While it may seem locally less tangible than the departments of Brain & Congitive Sciences, Economics, and Anthropology on the actual campus, this is obviously some sort of temporary anomaly given that it comfortably outranks these units in a widely-used report on the public impact of academic departments. The only conclusion, then, is that the Sociology Department does in fact exist and the MIT administration needs to backfill any apparent ontic absence immediately and bring conditions in the merely physically present university into line with the platonic and universal realm of being.”—MIT Sociology - Kieran Healy
“While the FSA didn’t take any enforcement action, police in London are now investigating whether brokers provided illegal kickbacks, these people say. “There aren’t specific rules about whether you can send your clients to go see prostitutes,” an FSA spokesman said. “You have to pick what sort of things you look at as a regulator.””—Clubby London Trading Scene Fostered Libor Rate-Fixing Scandal - WSJ.com
“At Vulture, Josh Wolk suggested that the made-up video illustrates everything that’s wrong with television news. I think it illustrates everything that’s wrong with viral marketing. Kimmel’s prank is not a biting satire, nor is it a mirror to our stupid culture. It’s a hostile, self-promoting act—a covert ad for Jimmy Kimmel Live—rendered as ironic acid that corrodes our sense of wonder. If the Web provides a cabinet of curiosities, full of freakish baubles of humanity, the hoaxer smashes it to bits, then counts his money while he preens atop the rubble.”—Worst twerk fail ever video hoax: Jimmy Kimmel should be ashamed, and we should be mad.
As well as destroying a computer containing one copy of the Snowden files, the paper’s editor, Alan Rusbridger, agreed to restrict the newspaper’s reporting of the documents.
The Government also demanded that the paper not publish details of how UK telecoms firms, including BT and Vodafone, were secretly collaborating with GCHQ to intercept the vast majority of all internet traffic entering the country.
”—You can’t prevent information from coming out by doing a deal with a single newspaper.
“Tumblr founder David Karp, in a washed-out Terry Richardson shot, buck naked except for a strategically placed Nexus 7 tablet; on the screen of the tablet, a Georgia O’Keeffe painting.”—Simon Dumenco is a sick, sick man.
“Our superb waitress, Tammy, who also teaches geography at the high school, informed us that every steak automatically came with a couple of things: shrimp cocktail, salad, baked potato, breadsticks, ravioli, spaghetti with marinara sauce, a relish tray, a salami and cheese plate and spumoni or vanilla ice cream.”—America.
“Sicha is operating on the premise that money—or rather, a lack of it—scaffolds our lives more than any other one thing. It’s why his image of the world he’s describing is architectural—all those glass plates. Four consecutive pages are devoted to a line-by-line inventory of what John owes to various entities. Balances are given; statements are quoted. He does some mental math and calculates that it would take him eighty-three months of non-delinquent full payments to chip his debt down to $132.27. Sicha successfully renders, like nobody else I’ve ever read, the suffocating psychic effects of debt, pervasive in the way a chronic disease or a guilty conscience or a terrible secret is pervasive: thought-infecting, decision-changing, life-defining—as society-altering as conscription.”—Choire Sicha, the Anti-Blogger : The New Yorker
“A friend told me yesterday that her four-year-old announced she had done a poo “like a brown dolphin”. Another friend remembers her little sister sitting on a potty and saying, “Look! It is a beautiful golden sun!” before they all waved it goodbye, discussing the beautiful sunset as they flushed it down the loo. I know I must, but I am resistant. I do not want to flush my daughter’s beautiful sunsets down the loo.”—The perfect Comment Is Free paragraph.
“For Bill Clinton, breakfast is almost always an almond-milk smoothie, blended with fresh berries, nondairy protein powder and a chunk of ice. Lunch is usually some combo of green salad and beans. He snacks on nuts — “those are good fats” — or hummus with raw vegetables, while dinner often includes quinoa, the Incan super-grain, or sometimes a veggie burger.”—So sad.
“The composition of vast books is a laborious and impoverishing extravagance. To go on for five hundred pages developing an idea whose perfect oral exposition is possible in a few minutes! A better course of procedure is to pretend that these books already exist, and then to offer a resume, a commentary … More reasonable, more inept, more indolent, I have preferred to write notes upon imaginary books.”—This is kinda how I feel whenever the subject turns to the possibility of me writing a book. What has it got to do with Sharknado? For that you’ll have to click through.
“Sources say that earlier this summer, the tech mogul was embarking on a tour of the French Riviera and asked his aides to find alluring female companions to “decorate his yacht.””—Ugh. He’s not even Russian!
“One of every three 30-year-olds who grew up in the top 1 percent of the income distribution was already making at least $100,000 in family income, according to the new study. Among adults who grew up in the bottom half of the income distribution, only one out of 25 had family income of at least $100,000 by age 30.”—In Climbing Income Ladder, Location Matters - NYTimes.com
“I would have loved to discuss the similarities and differences between heterosexual and L.G.B.T. students, but I just didn’t have the space.”—If only there were some outlet where the NYT could present information in a manner which isn’t space constrained.
“This Manhattan neighborhood has suffered many decades of poverty and deprivation. These days, you can find welcoming establishments for exotic dishes and cocktails.”—Wherein Bloomberg’s chief food critic dares cross 110th St, with highly embarrassing results.