How Iceland Dealt with a Volcanic Financial Meltdown


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Iceland was unique in that they handed over jail terms to bankers.

Gylfason believes that when a country goes through a major economic shock, in addition to getting its financial house in order – which Iceland successfully accomplished at the behest of the IMF — it also needs to clean up its act in the judicial and political realms. “We have a mixed picture here,” he says. “Thirty-nine bankers were awarded prison sentences by the Supreme Court of Iceland, to the tune of 2.5 years on average. This means the amount of prison time in man-years that the Supreme Court handed out is close to 100.” He admits some critics have alleged that “the small fry were sentenced, while the big fish got away. This raises sensitive questions about equality before the law. But we will know more once the Supreme Court hands out its last sentences in 2019.”

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Knowledge@Wharton

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After Recessions, Why Do Some Jobs Disappear Forever?


Knowledge@Wharton: There are two things that I found quite interesting in your paper that I want to highlight for a minute. One is the finding that 88% of job losses in the so-called “routine” occupations — such as bank tellers, manufacturing plant jobs, and office clerks — happened during economic downturns, and this is a trend that has been going on since the mid-1980s. Interestingly, this was also around the same time when innovation and automation started to pick up. These two seem to be correlated. Are they?

Roussanov: This is exactly the main empirical fact that our model aims to explain or at least understand. We were not the ones who documented this fact, but this has become an important piece of information for macroeconomists to wrap our heads around — the fact that this job polarization process seems to be primarily happening during relatively short periods of time, which are recessions.

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Where’s the Value? An Inside Look at Walmart’s Flipkart Deal


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Now, that the storm has settled a bit, a deeper analysis of the mega deal.

The big takeaway from the present deal is that deep pockets win. This is a maxim that has been demonstrated over and over again, especially in B2C technology plays. A certain disdain for capital efficiency, a focus on gaining share and a relentless focus on killing competition define today’s leading companies. Flipkart would have been in the news for very different reasons had it not been for the timely fund infusion by SoftBank in 2017. Growth had stalled, the annual burn was high and unit economics were unsustainable. And yet, as part of the strategy of Lee Fixel of Tiger Global and Kalyan Krishnamurthy, Flipkart doubled down on not ceding market share to Amazon, whatever the capital burn. This in turn caught Softbank’s eye (whose earlier investment in Snapdeal was not working to its expectations).

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Rajat Kumar — Knowledge@Wharton

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How the Golden State Killer Case Ignited a Privacy Debate


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What is also worrisome about the potential uses of DNA data is that “it doesn’t have to be your own” to help establish links, said Field. “If a cousin of yours decides to donate DNA information, it’s out there,” he added. “There’s nothing you can do about it. You can’t prevent your cousin from doing that, and you probably don’t even know [about] it. That’s a really tough one for the law to address.” Up until now, the assumption was that an individual would have the autonomy to decide who could see his or her genetic information, but that is no longer the case, he noted.

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Knowledge@Wharton

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What Silicon Valley Can Learn from the Theranos Fraud Case


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The flip side of the startup story. Sometimes things go very wrong.

As for Holmes’s future, Angel said, “she is very tainted, so no public company would really want to have her on board.” At the same time, he described her as “very intelligent, very talented and a great salesperson, [who] will land on her feet eventually.” Guay agreed. “Any kind of public role where a company would put her forward as a spokesperson or as a person of importance — that’s going to be a non-starter, at least for a while.”

Guay wondered how things may have come to such a pass at Theranos. “In many fraud circumstances, they sometimes start with small lies, and then those small lies have to be backed up with bigger and bigger lies,” he said. “[It is about] understanding how that all evolved here — whether this was something that [Holmes] felt she had to do or wanted early on, and then she dug herself a hole that she couldn’t get out of. It’s hard to know exactly how that evolved.”

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What’s Behind One of the Biggest Financial Scams in History


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Story of a massive scandal. And how the biggies got away, again..

Knowledge@Wharton: Nobody has been doing any jail time because of this. That’s a disturbing pattern on a lot of fronts, because we’ve seen a similar result here in the U.S. after the financial crisis, and many of the other banking-related scandals that have occurred.

Enrich: You know what’s interesting? As part of the publicity for this book, I’ve done a tremendous amount of radio. And radio, as you know, can be very deeply polarized on both the right and the left in this country. So just as preparation for a lot of these interviews, I did some quick research: Is this a Trump radio station or Clinton or Bernie Sanders radio station? And I was expecting different slanted questions. You know what? Everyone’s asked the exact same thing, which is, ‘Why do the financial elites keep getting away with murder?’ It seems to be this really unifying theme across the country right now. It just makes people’s blood boil. There was so much public pressure on politicians and prosecutors after the crisis to find some individuals to hold to account for the massive harm that the banking industry caused to the country and to the economy, really to the world.

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The Benefits of Being a Misfit


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This is an interview of Walter Issacson, who has written biographies of Steve Jobs, Leonardo da Vinci and others. He has useful suggestions for people aspiring to be more creative and innovative.

Grant: In closing, for an audience of students aspiring to be more creative, more innovative, are there any other tips that you would offer or myths to bust?

Isaacson: I’ll just tell you something small. The tongue of the woodpecker is three times longer than the beak. And when the woodpecker hits the bark at 10 times the force that would kill a human, the tongue wraps around the brain and cushions it, so the woodpecker can do woodpecking.

There’s absolutely no reason you need to know that. It is totally useless information, just as it was totally useless to Leonardo. But just like Leonardo, every now and then, it’s good to just know something for pure curiosity’s sake.

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Knowledge@Wharton

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