September 16, 2015

Oaktree - It's Not Easy 5-15min

Markets are meeting places where people come together (not necessarily physically) to exchange one thing (usually money) for another. Markets have a number of functions, one of which is to eliminate opportunities for excess returns. ... The bottom line is that first- level thinkers see what’s on the surface, react to it simplistically, and buy or sell on the basis of their reactions. They don’t understand their setting as a marketplace where asset prices reflect and depend on the expectations of the participants. They ignore the part that others play in how prices change. And they fail to understand the implications of all this for the route to success. ... The investor’s basic goal of buying desirable assets at fair prices is sensible and straightforward. But the deeper you look, the more you see how many aspects of successful investing are counterintuitive and how much of what seems obvious is wrong. ... The truth is, the best buys are usually found in the things most people don’t understand or believe in. These might be securities, investment approaches or investing concepts, but the fact that something isn’t widely accepted usually serves as a green light to those who’re perceptive (and contrary) enough to see it. ... Confidence is one of the key emotions, and I attribute a lot of the market’s recent volatility to a swing from too much of it a short while ago to too little more recently. The swing may have resulted from disillusionment: it’s particularly painful when investors recognize that they know far less than they had thought about how the world works.

Bloomberg - Blythe Masters Tells Banks the Blockchain Changes Everything 5-15min

In a matter of months, this word, blockchain, has gone viral on trading floors and in the executive suites of banks and brokerages on both sides of the Atlantic. You can’t attend a finance conference these days without hearing it mentioned on a panel or at a reception or even in the loo. At a recent blockchain confab in London’s hip East End, the host asked if there were any bankers in the room. More than half the audience members, all dressed in suits, raised their hands. ... Now, everyone’s trying to figure out whether the blockchain is just so much hype or if Masters’s firm and other startups are really going to change the systems that process trillions of dollars in securities trades. When investors buy and sell syndicated loans or derivatives or move money around the world, they must cope with opaque and clunky back-office processes that rely on negotiated contracts between buyers and sellers, lots of phone calls, lots of lawyers, and even the occasional fax. It still takes almost 20 days, on average, to settle syndicated loan trades. ... A June report backed by Santander InnoVentures, the Spanish bank’s fintech investment fund, estimated the blockchain could save lenders up to $20 billion annually in settlement, regulatory, and cross-border payment costs. ... Venture capitalists plowed $400 million into dozens of digital currency startups in the first six months of this year, a fourfold jump from all of 2013, according to industry news site CoinDesk.

Fast Company - What Makes Uber Run 5-15min

The thing to do, Kalanick argued, was to make the service a low-cost accessible luxury. "If Uber is lower-priced, then more people will want it," he explains. "And if more people want it and can afford it, then you have more cars on the road. And if you have more cars on the road, then your pickup times are lower, your reliability is better. The lower-cost product ends up being more luxurious than the high-end one." Kalanick had been resisting Camp’s overtures to become CEO, but it was this insight that got him excited: Uber could be huge. ... All that struggle and setback from his first two startups set up Kalanick almost perfectly for what was to come. "If you looked at everything he’s done, I don’t think there was another human who was more destined to build Uber," says Angelo Sotira. "You had peer-to-peer networks, aggressive dealings, large lawsuits." ... This new, subdued Travis Kalanick who claims he’d never heard of a libertarian seemed to me a significant overcorrection from the badass antigovernment crusader he has played for the past few years—and also just one sliver of his actual personality. That in itself is telling. Kalanick is not the kind of person who clings to beliefs, or even a fixed sense of himself. ... Some Silicon Valley founders pride themselves on being visionaries; Kalanick exults in an ability to read the data, revise, and adapt, likening running Uber to driving a car without a clear destination in sight. ... As of this summer, Uber has cars on the road in 15 Chinese cities with plans to be in 50 next year. The results so far have been astonishing: In just nine months, three Chinese cities (Chengdu, Guangzhou, and Hangzhou) have each already accounted for more rides than New York.

Rolling Stone - Yemen's Hidden War 5-15min

A journey into one of the most remote and dangerous countries in the world ... Djibouti is a tiny state of citrus-colored shacks and goat-lined boulevards tucked into a barren, volcanic stretch of the Horn of Africa. It sits astride the narrow straits that lead to the Red Sea and the Suez Canal, and is home to the U.S.'s only permanent military base in Africa, Camp Lemonnier, linchpin of one of the Obama administration's most secretive and controversial programs: the drone-based campaign of surveillance and assassination against Al Qaeda and its allies in Somalia and Yemen. ... as Yemen has become the latest country in the Middle East to descend into a full-fledged civil war. In March, after Houthi rebels seized control of the government, a coalition of Arab states led by Saudi Arabia, which accuses the Houthis of being supported by its archrival Iran, launched a U.S.-supported campaign of airstrikes and imposed a land, air and sea blockade of the country — which it says is necessary to keep out Iranian weapons. ... Four months of bitter fighting later, the Houthis control even more territory. And the conflict has pushed this already impoverished country to the brink of a massive humanitarian catastrophe, with the aid community warning of an impending famine if the blockade is not lifted. ... Meanwhile, Al Qaeda has taken advantage of the chaos to seize wide swaths of eastern Yemen, including the port city of Mukalla, and has called for new attacks against the U.S. ISIS has gained a foothold and launched car-bomb attacks in the capital. Forced to evacuate its embassy and 125 special-operations advisers, the U.S. found its counterterrorism strategy in shambles, with many of the weapons and equipment it supplied to Yemen reported to be in the hands of militias.

The New Yorker - The Big Dig: Istanbul’s city planners have a problem: too much history. 5-15min

But the real problem was the large number of Byzantine shipwrecks that began to surface soon after the excavation began, in 2004. Dating from the fifth to the eleventh century, the shipwrecks illustrated a previously murky chapter in the history of shipbuilding and were exceptionally well preserved, having apparently been buried in sand during a series of natural disasters. ... From 2005 to 2013, workers with shovels and wheelbarrows extracted a total of thirty-seven shipwrecks. When the excavation reached what had been the bottom of the sea, the archeologists announced that they could finally cede part of the site to the engineers, after one last survey of the seabed—just a formality, really, to make sure they hadn’t missed anything. That’s when they found the remains of a Neolithic dwelling, dating from around 6000 B.C. It was previously unknown that anyone had lived on the site of the old city before around 1300 B.C. The excavators, attempting to avoid traces of Istanbul’s human history, had ended up finding an extra five thousand years of it. It took five years to excavate the Neolithic layer, which yielded up graves, huts, cultivated farmland, wooden tools, and some two thousand human footprints, miraculously preserved in a layer of silt-covered mud. In the Stone Age, the water level of the Bosporus was far lower than it is now; there’s a chance that the people who left those prints might have been able to walk from Anatolia to Europe. ... In 2013, at least two million people crossed the Bosporus daily, by bridge or ferry; the number of motor-vehicle crossings rose eleven hundred and eighty per cent between 1988 and 2012. ... Wood can absorb eight times its mass in water. If allowed to dry naturally, it cracks and warps beyond recognition.