..."But while publishers revel in the robust margins provided by e-books — no manufacturing, no shipping and no remaindering — the growth of Amazon leaves them as secondary characters in a business they used to control.
Apple may be the one that was found guilty of setting prices, but Amazon has the kind of market power that allows it to set prices unilaterally. The company is already pulling back on discounts on scholarly and small-press books.
Barnes & Noble tried to keep up with the technological shift, but the company’s earnings were perforated by a $177 million loss from its Nook division, and that news took out William Lynch Jr., the chief executive, and threw a deep scare into publishers." Source: New York Times
Keywords: E-Books, Books, Book Market, Publishers, Amazon
Cambridge Associates: U.S. Private Equity and Venture Capital Funds Outpaced Public Equities in the Final Quarter of 2012. Both Alternative Asset Classes Turned in Solid 12-month Performances, According to Cambridge Associates, Boston, July 9, 2013
"In a fourth quarter fraught with political uncertainties, including the “fiscal cliff” negotiations, and other macroeconomic factors affecting the public markets, U.S. private equity and venture capital funds both generated positive returns for their investors and outperformed public equities, which were largely negative for the quarter. Continuing on momentum from a strong finish in 2011, both private asset classes also posted solid results for the calendar year, according to Cambridge Associates.
The Cambridge Associates LLC U.S. Private Equity Index® earned 3.5% for the quarter ending December 31, 2012, and 13.8% for the year ending on the same date. The Cambridge Associates LLC U.S. Venture Capital Index® returned 1.2% for the quarter and 7.2% for the year. The indices are derived from performance data compiled for funds that represent the majority of institutional capital raised by U.S.-based partnerships for their respective asset classes (private equity and venture capital, respectively). The following tabledetails the performance of the Cambridge benchmarks against several key market indices. Returns for periods of one year and longer are annualized." read more at Cambridge Associates
Keywords: Private Equity, Venture Capital
"THE term “alternative assets” conjures up an image of the counterculture—tie-dye shirts and magic mushrooms. But in financial jargon it means those assets that are not equities, bonds or cash. It covers everything from hedge funds to property, infrastructure projects to art.
When the stockmarket was rising by 20% a year in the late 1990s, interest in alternatives was limited. Equities provided all the excitement that investors needed. But in recent years a combination of poor stockmarkets and low bond yields have made alternatives fashionable.
Since 1995 global pension funds have increased their portfolio allocation to alternatives from 5% to 19%. In just the past two years there has been a 15% increase in the assets managed by alternatives managers on behalf of insurance companies, according to a new survey by Towers Watson, a consultancy. The 100 biggest alternatives managers look after more than $3 trillion of assets." read more in The Economist
Keywords: Alternative Assets, Asset Alloction, Pension Funds
Keywords: Retail, Technology, E-Commerce, Smartphones
The private-equity firm that has spent $5 billion on more than 30,000 distressed houses, is preparing to expand its bet on the housing recovery by lending to other landlords. read more on Bloomberg
Keywords: US Real Estate, Housing, US Housing Recovery
The Economist: Charlemagne Blog on European Politics
The Becker Posner Blog
The Circle Bastiat
Follow the latest discussion in the academic blogosphere (a service rendered by St.Louis Fed):
"This paper develops a new tax measure – the Tax Attractiveness Index – reflecting the attractiveness of a country’s tax environment and the tax planning opportuni-ties that are offered. Specifically, the Tax Attractiveness Index covers 16 different compo-nents of real-world tax systems, such as the statutory tax rate, the taxation of dividends and capital gains, withholding taxes, the existence of a group taxation regime, loss offset provi-sion, the double tax treaty network, thin capitalization rules, and controlled foreign compa-ny (CFC) rules. We develop methods to quantify each tax factor. The Tax Attractiveness Index is constructed for 100 countries over the 2005 to 2009 period. Regional clusters in the index as well as in the application of certain tax rules can be observed. The evaluation of individual countries based on the index corresponds – but is not totally identical – with the OECD’s ‘black’ respectively ‘grey’ list. By comparing the Tax Attractiveness Index with the statutory tax rate, we reveal that even high tax countries offer favorable tax condi-tions. Hence, the statutory tax rate is not a suitable proxy for a country’s tax climate in any case since countries may set other incentives to attract firms and investments."
Below is an excerpt from the paper conclusion, which explains that the statutory tax rate is not a suitable proxy for country comparisons and that special incentives have to be considered. The paper shows that also various EU countries apply aggressive special measures to attract firms. Looking at the tax attractiveness index constructed here one has to recognize that some EU countries such as The Netherlands, Ireland and more and more the UK belong to most aggressive tax jurisdictions. Furthermore, various "black lists" constructed by the OECD and specific countries could have a political element in it and might not be solely based on analytical measures.
Excerpt from paper conclusion:
"This paper develops a new tax measure – the Tax Attractiveness Index. The index co-vers 16 different tax factors, many of which have been neglected in existing tax measures so far. Hence, the Tax Attractiveness Index represents a new approach to measuring the attrac-tiveness of a country’s tax environment and the tax planning opportunities that are offered. We find that off-shore tax havens, such as Bermuda, the Bahamas, and the Cayman Islands provide very favorable tax conditions as reflected by high index values. However, certain Eu-ropean countries, such as Luxembourg, Cyprus, the Netherlands, Ireland, and Malta also achieve high index values. In further analyses, we observe regional clusters in the Tax Attrac-tiveness Index and certain tax rules. Moreover, we show that the index corresponds with the OECD lists of countries and tax regimes that are perceived as constituting harmful tax compe-tition. However, several exceptions can be noticed revealing that certain countries were re-moved from the OECD list although their tax environments did not change significantly. Fur-thermore, we find that the statutory tax rate is not a suitable proxy for a country’s tax envi-ronment in any case. In contrast, countries set incentives other than the statutory tax rate to attract firms and investments. Especially in Europe, many high tax countries offer extremely favorable tax conditions." Source: Keller, Sara; Schanz, Deborah, Measuring tax attractiveness across countries
Keywords: Taxes, Tax Attractiveness
Related: You find on the blog a table with the top 100 list
Keywords: Apple, I-Watch
..."people working and thinking about these technologies are starting to ask what these autos could mean for the city of the future. The short answer is “a lot.”
..."Imagine a city where you don’t drive in loops looking for a parking spot because your car drops you off and scoots off to some location to wait, sort of like taxi holding pens at airports."
..."Inner-city parking lots could become parks. Traffic lights could be less common because hidden sensors in cars and streets coordinate traffic."
..."That city of the future could have narrower streets because parking spots would no longer be necessary. And the air would be cleaner because people would drive less."
..."Harvard University researchers note that as much as one-third of the land in some cities is devoted to parking spots. Some city planners expect that the cost of homes will fall as more space will become available in cities. If parking on city streets is reduced and other vehicles on roadways become smaller, homes and offices will take up that space."
..."the Artificial Intelligence Laboratory at the University of Texas at Austin, imagines cities where traffic lights no longer exist but sensors direct the flow of traffic."
..."A spokesman for Audi said a fully automated car would not be available until the end of the decade. And the regulatory issues to be addressed before much of this could come true are, to put it mildly, forbidding."
..."But the pieces are starting to fall into place, at least enough to excite future-minded thinkers. Last year, Jerry Brown, the governor of California, signed legislation paving the way for driverless cars in California, making it the third state to explicitly allow the cars on the road."... Source: New York Times
"Coursera offers courses from the top universities, "for free to everyone". Current partners include Princeton University, Stanford University, University of California, Berkeley, University of Michigan-Ann Arbor, and University of Pennsylvania. The platform is designed to support millions of students on degree level units usually lasting 5 to 10 weeks."
Keywords: Online Education, Scaling up education
Online learning an effective way? NBER research says that it depends on the level of the student:
Online education, a way for schools to survive?
Schrag, Philip G. , MOOCs and Legal Education: Valuable Innovation or Looming Disaster? (June 10, 2013). Georgetown Public Law Research Paper No. 13-055. Available at SSRN: http://ssrn.com/abstract=2278261 or http://dx.doi.org/10.2139/ssrn.2278261
Selected blogs on online learning:
"This study examines the growth in private equity backed portfolio companies in the UK over the period from 1995 to 2012 using a dataset selected from the population of private and public companies in the UK including companies that received private equity backing. On the basis of real cumulative average growth rates (CAGR rolling 3 and 5 year periods), we find a consistent pattern of PE backed buyouts showing higher growth rates than non-PE backed buyouts for the first four years post buyout. Strongest increases in initial growth are displayed in respect of equity, total assets and value added. The growth rate remains positive throughout the post-buyout period for all variables except for sales and employment that become negative in year 7 post buyout. For the sub-period 2008-2011, PE backed buyouts are significant and positively associated with growth in all variables for both CAGR3 and 5 year periods, suggesting the PE backed firms’ growth has held up better than non-PE backed private companies. Board size is consistently significant and positively associated with all measures of growth, with significant and negative relationships between average director age and number of multiple directorships and all growth measures. Controlling for other factors, the extent of UK experience of PE firms is significant and positively associated with growth in value added, assets, sales, equity and employment. Foreign PE firms are significant and positively associated with growth in asset and equity but significant and negatively associated with employment growth." Source: SSRN
Keywords: LBOs, Firm Growth
"Technology tends to run in cycles. Microsoft ruled the 90’s by building essential software for enterprises. Then Apple created a new device driven marketplace in which the consumer was king. What will drive the next decade?
While these things are always hard to predict with any specificity, much of the writing is already on the wall. Humanlike, no-touch interfaces will combine with a pervasive array of sensors and intelligent back-end systems to form a new Web of Things. Computing will become truly ubiquitous.
This new era of computing will be different than anything we’ve seen before. Technology will cease to be something we turn on and off, but will become an inextricable part of not only our environment, but ourselves. It is a future that is both utopian and dystopian (depending on your perspective), in that the human experience will change dramatically." read more on Business Insider
Keywords: Technology, Technological Trends
..."My view is rising rates might slow price increases but not lead to a decline in prices (other than some seasonal declines). As far as the housing recovery (residential investment such as housing starts and new home sales), I think rising mortgage rates will have a minimal impact."
Keywords: Housing Prices, Mortgage Rates, Correlation between Housing Prices and Mortgage Rates
.."A new study accepted for publication by the Journal of Financial Economics overcomes this obstacle by focusing on the corporate tax-return data of more than 300 firms taken private by private-equity firms between 1995 and 2007. Even private companies have to file tax returns, after all.
After going private, the researchers concluded, such companies didn’t perform any better on average than they did before. Jonathan Cohn, a finance professor at the University of Texas, Austin, and one of the authors of this new study, says the agreement under which he and his fellow researchers were given access to Internal Revenue Service data prevents them from sharing data about any individual company.
Still, their conclusions reflect an average of the several hundred companies they studied and take into account return on sales, return on assets, economic value added and other performance measures.
The authors didn’t just focus on companies after they went private. They also compared the performance of such companies to a sample of other companies that were broadly similar except that they remained public. They found no difference in the operating performance of both groups.
These findings don’t mean that the average buyout firm can’t produce impressive returns. It just means that improved operating performance isn’t the source of those outsize returns.
So where do the returns come from? One example is market timing, Cohn says. Buyout firms often pick opportune times to take companies private and then sell them. Increased debt, or “leverage,” can magnify returns. And firms can realize tax savings because of increased debt-service costs.".. Source: MarketWatch
read the whole article on MarketWatch
Three common perceptions of CEO pay and corporate governance in the U.S.:
- CEOs are overpaid and their pay keeps increasing;
- CEOs are not paid for performance;
- Boards do not penalize CEOs for poor performance.
Keywords: CEO Compensation, Corporate Governance
Keywords: Pollution, Sensors
Keywords: Inflation official, Inflation real
...."Another way of looking at the data is to assume that profits are cyclical and return to the mean as a proportion of GDP; since they are currently at a post-war high relative to GDP, this implies profits (and thus dividends) will grow more slowly than GDP in the long-term.
And finally, should we assume that valuations remain unchanged? The evidence suggests that buying when the Shiller p/e is high reduces long-term returns since the ratio tends to return to the mean; see this paper from Clifford Asness of AQR. When the p/e is at its current levels, future ten-year real returns have averaged 0.9% a year.
Now one can assume that dividends will rise faster than in the past, or that profits will stay high (the workers will be crushed or the competitive laws of capitalism will be suspended), that valuations will remain above the historical norm. Things may be different this time. But these are optimistic assumptions, not the baseline."
Keywords: GDP, Price Earnings Ratio, Shiller PE
Econ Analysis: Selected contributions to economics: articles, papers, podcasts, blogs (constantly updated)__________________________________________________________________________________________________
Recommended search terms (click on terms):
Analysts, Analyst Recommendation, Animal Spirits, Austerity, Bail out, Behavioral Finance, Bubble, Buyout, Carried Interest Taxation, Central Banks, CEO, Compensation, Contagion, Corporate Governance, Creative Destruction, Crisis, Currency War, Decoupling, Deflation, Depression, Economic Outlook, Economic Stimulus, Entrepreneur, Exchange Rates, Fiscal Policy, Forecast, Hedge Fund, Herding, Inflation, Information Cascades, LBO, Innovation Minsky Cycle, Monetary Policy, Moral Hazard, Mortgage, Nationalization, Protectionism, Recession, Regulation, Shareholder Activism, Sovereign Wealth Funds, Subprime, Taxes, Tobin Tax, Venture Capital, Walker Report, Yield Curve,
Finance and Real Estate:
Biofuel, Carbon, Cleantech, Climate Change, CO2, Energy, Food Crisis, Food Prices, Externalities, Gold, Kuznets Curve, Solar, Oil, ______________________________________________________________________________________________________
Natural Resources and Food:
Latest articles of selected institutions:
Imported information which does not show the source will be removed.
_______________________________________________________________________________________ ________________________________________________________________________________________ __________________________________________________________________________________
|<< <||> >>|