China pushes lending into the shadows: in forms on loan sharks, investment companies, and
off-balance sheet lending. Meet “wealth management products”, a bank-guaranteed
note that offers 4%+ annual rate in exchange for 3 month+ lock-up. Duration
mismatch risk and asset-depreciation risk can be materially dangerous. [Note:
the way out may be, paradoxically, less regulation of the formal sector]…Source:
http://www.ft.com/intl/cms/s/0/7c76e8e0-80cf-11e2-9c5b-00144feabdc0.html#axzz2LmsE5VKa
Prisoner workshop in UK: The idea is not new, but the effort does help lower
the reoffending rate (currently as high as 40%) and help pay for the prison
budget. Also cost-effective for employers. [Note: probably works beautifully,
but can the prisoners refuse to work?]…Source: http://www.economist.com/news/britain/21572201-government-wants-prisoners-be-more-productive-their-release-well-after
Why cable has so many TV channels you never watch: because the cable companies purchase and carry all the
channel packages from media companies, and the latter has some pretty good
market power. [Note: interestingly, a case when both supplier and the demander
have good pricing powers]…Source: http://www.theatlantic.com/business/archive/2013/02/why-cable-has-so-many-tv-channels-you-never-watch-explained-in-1-lawsuit/273525/
Interview with Michael Mauboussin: “I do think there is a role for intuition in decision
making. But what I have said, and I repeat, is that people rely vastly too much
on intuition. People draw on much more than they should. Intuition works very
well in environments that are stable and linear where you learn about the
environment. Sports is a very good example — so if you are learning to play
tennis, it is a stable and linear environment. As you play, you get better and
better and then your intuition will be very good. Chess is another great
example. The grandmasters of chess have enormous intuition, they are analytical
but they also have a lot of intuition. Where intuition tends to fail are
situations exactly opposite of that — situations that are non-linear and
unstable. There you can’t really train yourself, you can’t get feedback. To the
degree that the markets and companies operate in a non-linear and unstable
environment, it is very difficult to apply intuition.” [Note: a good interview,
recommended]…Source: http://business.outlookindia.com/article.aspx?283881
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