Tag Archives: Business

The Rise (and Likely Fall) of the Talent Economy


BOOK REVIEW

Playing to Win: How Strategy Really Works, Author: Roger L. Martin.

By Roger L. Martin – Another, less well-known mechanism that has boosted income for the possessors of talent is the notorious “2&20 formula.”

Its roots lie in a 2,000-year-old practice whereby Phoenician ship captains would take 20% of the value of a cargo successfully delivered.

In 1949, when a fee of 1% to 2% of assets under management was typical in the investment management field, Alfred Winslow Jones, the first acknowledged hedge fund manager, adopted the Phoenician formula. He set himself up as the general partner of what would come to be referred to as a private equity firm and charged the limited partners who invested in his fund a 20% cut of the profits that he generated (“carried interest,” in industry parlance) on top of a 2% asset management fee. more> http://tinyurl.com/o2fndol

European Breakups Shouldn’t Be So Hard to Do


By Leonid Bershidsky – Suddenly, the possibility arises of small nations springing up throughout Europe:

Catalonia and the Basque country fragmenting Spain; Flanders and Wallonia — and don’t forget a separate German-speaking mini-state — in place of Belgium;

Veneto and South Tyrol breaking off from Italy;

Bavaria and East Frisia leaving Germany;

Corsica and Savoy saying goodbye to France;

Lapland carving off parts of Norway, Sweden and Finland. more> http://tinyurl.com/pyeowy9

Related>

Google Is Target of European Backlash on U.S. Tech Dominance


By Danny Hakim – Across Europe, Google has been under fire, reflecting the broader challenges facing American technology companies. Google, fairly or not, has become a glaring proxy for criticism of an intrusive American government and concern over America’s unmatched technology dominance.

Much has changed since Google was founded in the late 1990s. It was once viewed as an idealistic start-up whose credo was “Don’t Be Evil.”

“For politicians in Europe, it’s clear they have to act and regulate the way Google dominates the market.” more> http://tinyurl.com/ojf4vmn

Updates from CHICAGO BOOTH


Shocking news: The euro is a success!
By John Hintze – The Economist’s Big Mac Index shows that the price of the sandwich, when translated into US dollars, varies from $1.54 in India to $7.80 in Norway.

What interests economists is, why?

The researchers generally find large price differences between countries that use different currencies. Prices in Japan, for example, are about 20% higher, on average, than those in the United States for the same products.

For all the euro’s travails, it seems that it has reduced the influence of international borders on prices. more> http://tinyurl.com/lsk59h6

Related>

Fast-food workers and a new form of labor activism


By By William Finnegan – The fast-food chains insist that if they were to pay their employees more they would have to raise menu prices. Their wages are “competitive.”

But in Denmark McDonald’s workers over the age of eighteen earn more than twenty dollars an hour—they are also unionized—and the price of a Big Mac is only thirty-five cents more than it is in the United States.

The differential between C.E.O. and worker pay in fast food is higher than in any other domestic economic sector—twelve hundred to one. In construction, by comparison, the differential is ninety-three to one. more> http://tinyurl.com/lw5se9t

What Can a House Majority Leader Do for a Bank?


By Matt Levine – He’s being hired as a senior banker. Senior bankers are hired to bring in clients.

Yes, Eric Cantor is probably bad at Excel. Lots of senior bankers are bad at Excel. Excel is not a core skill for senior bankers. The core skill for senior bankers is having people pick up the phone when you call them.

There’s a famous list of commandments for senior Goldman Sachs bankers that pretty much sums up the business. more> http://tinyurl.com/pbktuqt

As the seas rise, a slow-motion disaster gnaws at America’s shores


By Ryan McNeill, Deborah J. Nelson and Duff Wilson – Since 2001, water has reached flood levels an average of 20 days or more a year in Annapolis, Maryland; Wilmington, North Carolina; Washington, D.C.; Atlantic City, New Jersey; Sandy Hook, New Jersey; and Charleston, South Carolina.

Before 1971, none of these locations averaged more than five days a year.

Annapolis had the highest average number of days a year above flood threshold since 2001, at 34. On the Delmarva Peninsula, the annual average tripled to 18 days at the Lewes, Delaware, tide gauge.

“In the U.S., you have best data set on what’s happening in the world, and yet it’s not used in public policy,” said Robert Nicholls, professor of coastal engineering at the University of Southampton in England. more> http://tinyurl.com/kqqojj4