Category — Business

In the still ongoing political smear campaign against Goldman Sachs conducted by the Senate Subcommittee on Investigations, the latter has been particularly enraged by Goldman Sachs’ supposed “bet against home owners”. That is, because Goldman Sachs was net short exposure to mortgage-related securities, policy-makers have been arguing that the bank was contributing to pushing prices down, and in an evil way benefiting from the ruin of hard-working regular Americans.

Now, first of all, I am unsure about whether Goldman’s supposed “big short” really had a significant impact on housing prices. Arguably, the collapse of the U.S. housing market in 2007-2008 was a necessary consequence of unsustainably rapid price increases brought about by horribly easy credit in the years before, and would have been just as painful for regular hard-working Americans regardless of whether Goldman had a net short position or not. One could perhaps even argue that the crash would have been worse if Goldman had not been as hedged as they were.

Above: Charles Ponzi, the model banker, according to the Senate Subcommittee on Investigations

Nevertheless, it is interesting for the sake of argument to assume that Goldman’s supposed “big short” did in fact push down the price of property, which seems [Read more →]

The United States is not the only place where offshore drilling has been on the political agenda during the last years. In Norway, where the offshore oil and gas industry is a significant part of the economy, making Norway the third largest oil exporter in the world, there has been debate about opening up scenic coastal areas of Lofoten and Vesterålen for offshore drilling. The Northern Norwegian coastal archipelagos feature amazingly scenic nature complete with fjords and mountains, the world’s largest population of cod along with a thriving fishing industry, and whether possible drilling in the area should be allowed to commence has already been the subject of intense debate.

Still, Norway’s Labor Party led coalition government is arguably leaning towards opening up the area for oil and gas investments, in spite of vocal protests from its Socialist Left Party members. It has certainly been  [Read more →]

As a part of its 18-month long inquiry into the causes of the financial crisis, Senate Homeland Security and Governmental Affairs Investigations Subcommittee on Tuesday summoned Lloyd Blainkfein and several other senior Goldman executives to answer for their role in causing the financial crisis.

According to the subcommittee, it has [Read more →]

Last week we endorsed an article on collapsing business models, but having read this must-read critique of it and the journalistic style it applies, one comes to wonder how accurate the analysis really is. When reading articles that tries to make sweeping generalizations just on the basis of a few cases or examples, we must really strive not to be swayed by what is most likely pure dramaturgy and seduction from the author.

A complex system that is very difficult to describe by a single phrase – Photo Credits

Thinking further about  this problem, business books that try to coin new phrases come to mind. Malcom Gladwell is a master of this art writing books such as “The Tipping Point” and “Outliers”.  Be careful when reading this, [Read more →]

Clay Shirky posted a very interesting article on creative destruction wrought by the emerging ICT-paradigm, in particular on the television industry. Lots of Schumpeterian economic evolution-revolution. Check it out here.

Thanks to my uncle Ashley, a loyal Evolution-Revolution reader, for sending me the link.   Picture from http://affordablehousinginstitute.org/blogs/us/2007/07/the-value-of-foreclosure.html

Above: Microsoft’s Entertainment and Devices Division after one of Steve Ballmer’s “angry” days.

The Wall Street Journal reports that Microsoft management is cracking down on the use of iPhones amongst company employees. In a recent meeting executives Andy Lees (who is in charge of mobile-phone software development) and Robbie Bach (President of Entertainment and Devices Division, responsible for a.o. the Xbox) were chastised by CEO Steve Ballmer when arguing that [Read more →]