1. This looks like an effective way to do cardio.
My friend Ben posed an interesting question - what will be the Pet's.com investments of this era? He made the point that it isn't obvious to everyone at the time that these companies are ignoring economic realities - many people were convinced to invest in the company and many others decided to work for it before it was exposed as hopeless.
- Today's era "bubble" investing is occurring largely away from the public markets. For better or worse, normal investors aren't getting involved in tech start ups until much later in the game. This means there are less high profile cases where individuals lose money, which is why people were so surprised by Facebook's public market performance.
- VCs are relatively secretive about their return on individual investments, especially failed investments. Many failed companies turn in acqui-hires for undisclosed amounts. When these companies shut down or change directions without an exit their profiles are either scrubbed of investors or are never completed in the first place to avoid damaging the reputation of their investors (Which is silly since all VCs invest in companies that do badly). This means there are less high profile failures.
- The old economy still has lots of inefficiencies, so there is still lots of room for smart programmers to team up up with people who know industries to fix inefficiencies. This trend can be summarize by anything from smart enterprise where new start ups are going to replace old inefficient software to software eating the world. Either way, it means that there will be many more success stories for every failure. And with all of the successful companies it seems silly to focus on the failures. No one is making fun of Bebo these days, unless it is to point out the elitism and hypocrisy of the founders' new clubhouse.
1. Robin Hanson examines why betting isn't more common. All of these issues he brings up seem relevant, but the introduction of money into the equation seeming rude and highlighting power differences outside the conversation is probably the most important. Maybe that's why my friends won't make many bets with me... or maybe that's why I don't have more friends.
Standard and Poor's is going for an interesting defense.
S&P said in its request to dismiss the case that the government can’t base its fraud claims on S&P’s assertions that its ratings were independent, objective and free of conflicts of interest because U.S. courts have found that such vague and generalized statements are the kind of “puffery” that a reasonable investor wouldn’t rely on.
And yet rating agencies are still a key part of financial regulations.
A lot of people have been talking about moving from California to Texas due to an increasingly unfavorable policy regime in California. But they are forgetting about one of the very unfavorable regulatory regimes in Texas - their friendliness to IP lawsuits.
Patent lawsuits are rife in East Texas. At first it was just one or two particularly friendly judges, but over time the perception has been that juries are even more favorable to plaintiffs - perhaps because they realize that their local economy is supported by the large amount of patent lawsuits filed in their district.
Companies should make every effort to avoid doing business in places where the litigation environment is unfavorable. It might be hard to avoid patent lawsuits by avoiding doing business in the state, because apparently all it takes is for companies to register in the state and courts may justify the location based on that alone. The American Invents Act might have helped solve this problem already by splitting up joinder lawsuits where one patent troll sues everyone at once so the defenders can have more of a say in the location of the trial.
So boycotting Texas probably wouldn't do much to stop patent trolls. But it would have been funny if it could have potentially helped.
1. Why Youtube isn't the best long term partner for content creators.
1. The Supreme Court ruling on patenting genes will need to address these issues again.
I'm not sure which people at PayPal are going to take the blame for this little fiasco, but it would be interesting to know what they were thinking.
A 17-year-old German student found a significant security vulnerability on PayPal’s website, and when he revealed the issue to the company, expected to be rewarded.
But PayPal refused to pay Robert Kugler a Bug Bounty, telling him he was too young to participate in the company’s program that rewards people who find glitches in the system. TechWeek Europe reported that Paypal defended its actions in not paying the bounty because of Kugler’s age and because the bug had already been found.
First of all, they are generating bad press over a topic tangentially related to their existing PR problem of being seen as a company that refuses to pay people money they are owed. But perhaps more importantly, while the bug in this case may not have been critical PayPal is signaling to other hackers that they are not necessarily reliable in their bug bounty program when there are plenty of other people out there willing to buy information on PayPal's bugs.
The Reinhart & Rogoff saga continues.
One point that hasn't been addressed: Outside of the issue about the significance of the data errors, the main complaint seems to be that Reinhart & Rogoff didn't do enough to clarify that the correlation between high levels of sovereign debt and low growth was not necessarily causal. Countries often had debt because they had low growth, the high debt isn't necessarily the cause behind low growth.
Critics of Reinhart & Rogoff then go on to point out that this paper was a major driver behind the austerity movement because politicians supporting austerity often cited this study. I'm not sure if people making these claims really think that Paul Ryan would be okay with budget deficit without being able to talk about a 90% level in debt/GDP, but it's funny that they are making the same mistake they accuse Reinhart & Rogoff of making.
The question is simple - what are the biggest ways that people in society are acting more rationally since the start of the third millenium?