SplicedFeed

Checking Gold’s Hotness [Paul Kedrosky's Infectious Greed]

2009-11-07T22:40:51-08:00

A daily heatmap of gold performance – as proxied by GLD – over the last four years. Remarkable change in behavior since 2005.

Credit Default Swaps: Proudly the Tool of the Devil Again [Paul Kedrosky's Infectious Greed]

2009-11-07T12:00:17-08:00

Lots of people are staking out positions around (and mostly against) investor David Einhorn’s FT-reported anti-CDS musings in his latest investor letter. I agree with David in many ways – and his writing is as fun as usual – but I don’t accept all of David’s reasons (although I agree the ability to so directly influence the path to default can be problematic).

Two of my main CDS issues (which are fixable):

1. They are congenitally under-reserved , which creates asymmetric risks.
2. It is possible to write swaps (far) exceeding the notional value of the thing for which you are writing all the swaps. That’s … not good, like being able to create total policies far exceeding the value of a house, thus making it urgent to burn the house down as soon as possible.

Anyway, here is Einhorn’s original, followed by two takes on opposite sides:

• Einhorn against credit default swaps (FT)
• Ehrenberg: Deal with it Dave (IA)
• Yves: First, let’s kill all the credit default swaps (NC)

Feel free to find yet another position to stake out in comments.

Protectionism and the Chinese Box of the Renminbi [Paul Kedrosky's Infectious Greed]

2009-11-07T10:24:47-08:00

I have a commentary piece on Marketplace this coming week arguing that the U.S. dollar must be allowed by Asian central banks to depreciate against more currencies than the Euro. All of the longstanding trade and flow imbalances cannot be funneled through a single currency pair without creating even more grotesque trade & debt distortions.

And, as Michael Pettis points out, if the exchange shift cannot be made to happen to escape the Chinese box of a renminbi loose peg, the imbalances will end up in political hands with worrying protectionist implications:

In that sense the refusal of Asian central banks to permit the needed appreciation of their currencies against the dollar may end up having the same impact on the adjustment process of the overvalued currencies.� The 1930s seemed to show, according to the authors, that when their currencies could not adjust, countries became protectionist.� So if the overvalued dollar cannot adjust except against the euro, and if the already overvalued euro has to bear the brunt of any further adjustment, will American and European politicians be forced into the “second-best” option of trade protection?� No prizes for guessing what I think.

More here.

100 Things Restaurant Waiters Should Never Do (Part 2) [Silicon Alley Insider]

2009-11-07T08:10:00-08:00

Restaurateur Bruce Buschel continues his list in the New York Times...

As with the first 50 things waiters should never do, the underlying logic here applies to a lot more than the restaurant business.

Read the rest of this story �

See Also:

• 100 Things Restaurant Waiters Should Never Do

peHUB Rewind [privateequityHUB]

2009-11-07T08:00:30-08:00

Here's a look at the past week of scoops, opinions and analysis from the peHUB blogging team. Read ‘em before they go behind our subscriber paywall... First Intel Capital Company Goes Public In China How High-Touch Should Founders Be? Laundry Room Chronicles: VC Performance Problems 20-Year Investment Cycles? 7th Annual Internship Rodeo: A Call for Positions The Mega-Deals Look Like Crap. Tell Us Something We Don't Know Two More U.S.-Backed IPOs In China Insider Trading Allegations Hit Private Equity Alleged Insider Trader Working for VC Firm (Still!) Update: 5AM Ventures Terminates Cheng Tan Tech Coast Angels Creates Endowment to Honor Villalobos If You Want to Invest in VC, Where Exactly Should You Put Your Money? Frazier Tech Hears the Blues A-Callin' 5 Questions for Len Jordan, Frazier Technology Ventures Combining Portfolio Companies To Save Them How Many VCs Besides Frazier Tech Are Winding Down Live-Blogging Blackstone Media Call 5 Skype Questions for Marc Andreessen This Week in Portfolio Company Debt Damn Kids To Blame for KKR's Bad Deal

This whole Spitzer hullabaloo has me thinking about legacy.� The New York Times put up an interactive timeline, “Milestones in an Ambitious Career,” that curtly sums the New York Governor’s key career moments into a few pictures and captions.� Here’s the headlining snippet:

“Eliot Spitzer’s journey from Harvard Law School to the highest office in New York state was marked by drive, ambition and [sic] string of successful prosecutions as the state’s attorney general.� But as governor, he stumbled repeatedly and faced humiliation after being linked to a prostitution ring.”

Full stop.� I sure hope Governor Spitzer gets a shot at a third sentence to his legacy.

It’s worth thinking about how one gets described and how we describe ourselves.� The venture industry is pretty unique in that almost every investment professional’s bio is online and readily available.� Ultimately, of course, these are sales pitches (primarily to entrepreneurs).� But some of them hint at or even nail down a legacy; consider John Doerr’s inclusion that his and his partners’ investments have created 150,000 new jobs(!).

What role does the self-described legacy, though, have on the impression of others?� Well, perhaps it’s a guideline (and sometimes a revelation of where one stands on the ego continuum).� Doerr frames himself as a champion of economic development rather than an all-star VC.

The venture industry teaches us to distill a company’s offering into one or two sentences.� How many more does an individual get?� Amazingly, even as our lives become more and more “discoverable” with traces of us digitally archived all over, one’s legacy is, with rare exception, going to be a couple simple sound bites.� One might say, “Tread carefully.”� But I guess I’m more a fan of “give it your damndest and stick to your values.”� What will your two (or three) sentences be?� Worth pondering…

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