Equity markets are thriving but are they relevant?


The largest companies of 1956 were large by all measures — sales, market capitalisation, employment, and operating assets. No longer. Walmart and Hon Hai (better known as Foxconn) are today’s largest private sector employers, along with businesses like Compass, which might be regarded as global gangmasters.

Apple’s market capitalisation today exceeds $800bn, and Alphabet is not far behind. For both these companies, operating assets account for about $30bn of that value. Modern businesses like these employ very little capital, and such assets as they do use mostly need not be owned by the company that operates from them.

As a source of capital for business, equity markets no longer register on the radar screen.

The complete article

John Kay

Best Investment Books for Beginners recommended by John Kay


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John Kay is a person with very clear views. His recommendations definitely carry weight.

Let’s get into the books you’ve chosen. As it’s the one you’ve traditionally recommended, let’s start with Burton Malkiel’s A Random Walk Down Wall Street (1973).

Yes, that’s the book I recommend when asked by people who are highly intelligent, have a little bit of money, but feel at sea. I’m not very impressed by financial advisers—for pretty good reasons. But there is very little you can read on investment that’s not insulting to the intelligence. As you know, there are lots of ‘how to become rich by day trading’ books around, but intelligent people know what to do with those kinds of books: namely not to open them.

The complete interview

John Kay — Five Books

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Factory Made


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As per Wikipedia, “Wage slavery is usually used to refer to a situation where a person’s livelihood depends on wages or a salary, especially when the dependence is total and immediate.”

Moreover, the word “factory” itself was connected in its etymology to the slave trade. In the early modern era, distant commercial outposts were known as “factories,” after the “factor,” the presiding merchant. The most notorious “factories” were the castles and prisons operated by Europeans on the coast of West Africa, where the African slave trade met the transatlantic slave trade, and whence many millions of enslaved people began the Middle Passage to the Americas. In Behemoth: A History of the Factory and the Making of the Modern World, Joshua B. Freeman doesn’t dwell on the bleak fantasies of slaveholders or the connections between early-modern colonial slavery and the rise of industry.

The complete article

Padraic X. Scanlan — The New Inquiry

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Death by Derivatives


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Trading in derivatives has led to great losses for some speculators some of who ended their lives. This has been happening since 1848, ever since the birth of modern financial derivatives.

The unlucky Belloy was not the only early futures trader whose life ended in an unpleasant fashion. The ruined trader Nelson Van Kirk used his last few dollars to buy a cheap revolver that had to be pried from the fingers of his corpse. The trader T.C. Chisolm lost everything in a failed wheat corner, save an elevator full of corn in New York, which, it turned out, was rotten. He took a ferry to Brooklyn (no doubt noticing a magnificent new bridge still under construction), then found a remote slip where he filled his pockets with stones and plunged into the East River to drown.

The complete article

Michael Durbin — Damn Interesting

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How Hunter-Gatherers May Hold the Key to our Economic Future


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Do we have more leisure compared to our ancestors? Are we happier at our workplaces compared to hunter-gatherers?

The most compelling thing about this research was that it suggested that “economic problem” was not, as Keyne’s believed “the primary problem of the human race from the beginnings of time”. For where the economic problem holds that we have unlimited wants and limited means, Ju/’hoansi hunter-gatherers had few wants that were easily satisfied. It was for this reason that Marshall Sahlins, arguably the most influential American social anthropologist of the 20th century, redubbed hunter-gatherers “the original affluent society”.

Unsurprisingly, this simple idea briefly captured the popular imagination: “Imagine a society in which the work week seldom exceeds 19 hours, material wealth is considered a burden, and no one is much richer than anyone else”, gushed Time Magazine in an editorial about the Bushmen in November 1969, “The people are comfortable, peaceable, happy and secure…This Elysian community actually exists.”

The complete article

James Suzman — Evonomics

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Why Amartya Sen remains the century’s great critic of capitalism


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Every major work on material inequality in the 21st century owes a debt to Sen. But his own writings treat material inequality as though the moral frameworks and social relationships that mediate economic exchanges matter. Famine is the nadir of material deprivation. But it seldom occurs – Sen argues – for lack of food. To understand why a people goes hungry, look not for catastrophic crop failure; look rather for malfunctions of the moral economy that moderates competing demands upon a scarce commodity. Material inequality of the most egregious kind is the problem here. But piecemeal modifications to the machinery of production and distribution will not solve it. The relationships between different members of the economy must be put right. Only then will there be enough to go around.

The complete article

Tim Rogan — Aeon

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How Much Money Do People Have?


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One of the key takeaways – MBAs have the highest net worth of all higher educational degrees, while doctors and dentists have the most cash (and debt).

On average, young professional men and women both have positive net worth. However, there is a large gap in net worth between men and women. Men have more than double the net worth of women, averaging $12,188 compared to the female average of $5,541.

Overall, men and women have similar cash balances: $9,512 for women and $9,565 for men. Women hold more money in their savings accounts than men, who keep more in their checking accounts. Are women more conservative with their cash?

The complete article

Priceonomics

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