Stilltitled

Of The Injustice of Counterfeiting Books, an appeal to the rights of the author

We’re seeing a pretty good bounce back

—Jeffrey Immelt, CEO of GE, on 22 January

Capital spending has already improved despite low capacity use.  You had a massive collapse in capex, and those are almost always followed by massive recoveries.

—Joseph LaVorgna, chief US economist at Deutsche Bank

The headline number will look large and big, but actually when you dissect it, it’s very dismal and poor. I think we are in trouble…It’s going to feel like a recession even if technically we’re not going to be in a recession.

—Nouriel Roubini, via a Bloomberg interview on Jan. 30 following the U.S. Commerce Department report 5.7% GDP growth in the fourth quarter

Economists have a tendency to assume that everyone’s behavior is rational. But post-boom pessimism is a factor driving the economy, and it is likely to be associated with attitudes that may be enduring.

—Robert Shiller: NYT. Shiller suggested that self-interest is not always sufficient to drive an economy or an organization. He cited Samuel Bowles recent Castle Lectures at Yale, Machiavelli’s Mistake: Why Good Incentives Are No Substitute for Good Citizens. The lectures frame classical economics as one seated in the assumption that citizens are wicked and require the discipline of laws and prices to institute morality.  Whereas these drivers are designed to induce “wicked citizens to act as if they were good,” they also “induce even the good to act as if they were wicked.” Bowles, writing in the Harvard Business Review, would off-handedly describe our basic condition as follows, “When we buy, sell, produce, consume, or save, we are not only trying to get stuff – we are also trying to be a certain kind of person.” Machiavelli’s mistake anchors classical economics and interferes with this process.

The housing market is still on life support, and if government measures are withdrawn too quickly it could sink it, taking the economy down with it. Households have such high debt loads, in addition to their mortgages, that any reduction in income, including a job loss, could trigger a foreclosure.

—Mark Zandi, chief economist at Moody’s Economy.com, projects a dour mood on the future as GDP recovers 5.7%, 100BPs better than consensus.

What you needed this past year versus 2007 and early 2008 was lots of tools, technology and the use of gray matter. Brokers needed to bring their A game.

—Peter Weiler, EVP of global sales at Abel/Noser Corp. Abel/Noser is a broker that also analyzes trading costs. While Goldman rose to number one in the most recent ranking, JPMorgan has dropped precipitously to number four worldwide since being the top-ranked broker in 12-month period ending March 31, 2008. In addition, Ancerno Ltd announced that Goldman replaced JPMorgan as the firm that consistently got it’s institutional clients the best prices between July 1, 2008 and June 30, 2009. Morgan Stanley followed BofA in the overall ranking, coming in third, and Jason Crosby, head of Morgan Stanley’s Americas Portfolio distribution, emphasized the network effects at play in electronic trading: “The liquidity we’re able to find leads to significant opportunities to match customers’ orders against each other.”

They have the most developed and advanced electronic systems. They can get some of the fastest execution times on trades, thereby minimizing some potential costs.

—Roger Freeman, analyst at Barclays, commenting on Goldman’s electronic trading capabilities and growing advantage via network externalities. Paul Russo, Goldman’s head of U.S. equities trading and co-head of global equity derivatives, would attribute this to their ability to cross-trades through natural flows, which minimize the trading footprint they leave in the marketplace. This is a similar phenomenon to what Larry Fink suggested Blackrock might do within their own assets through BlackRock Solutions – crossing trades.

J.D. Salinger has passed away.

—New Yorker

—NYT

Some countries have erected electronic barriers that prevent their people from accessing portions of the world’s networks. They’ve expunged words, names, and phrases from search engine results. They have violated the privacy of citizens who engage in non-violent political speech. These actions contravene the Universal Declaration on Human Rights, which tells us that all people have the right “to seek, receive and impart information and ideas through any media and regardless of frontiers.” With the spread of these restrictive practices, a new information curtain is descending across much of the world. And beyond this partition, viral videos and blog posts are becoming the samizdat of our day.

–Secretary of State Hillary Clinton, speaking at the Newseum, inciting a fierce response from China

Individual senators now use the filibuster, or the threat of it, as a kind of personal veto, and that power seems to have warped their behavior, encouraging grandstanding and worse.

–Thomas Geoghegan, via NYT

Amazon did a great job pioneering this functionality with the kindle. we’re going to stand on their shoulders and go further…iBooks

–Scott Forstall, SVP iPhone Software, at the 27 January iPad launch. Sometimes it’s hard being a market leader when you’re surrounded by fast-followers, especially when they choose to follow with the ePub format. Nonetheless, they are partnering with Amazon to support the iBooks store.