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Mystery Surrounding Collapse Of Hong Kong Mercantile Exchange Deepens; Four Arrested

Mystery Surrounding Collapse Of Hong Kong Mercantile Exchange Deepens; Four Arrested

Tyler Durden on 05/25/2013 22:30 -0400

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A week ago, when the brand new Hong Kong Mercantile Exchange suddenly shuttered after being in operation for only two years, urgently settling what little contracts were outstanding, many questions were left unanswered. Such as: how it was possible that the exchange, expected by many to become the new preferred trading venue for Asian precious metals and to steal the CME’s crown, could close on such short notice, without barely having been given a fair chance at being profitable, let alone dominating Pacific rim metals trading. This mystery deepened further after reports that the exchange barely had seen any volume, with allegedly only a tiny 200 open contractsremaining to be settled upon shuttering. Now, the confusion surrounding the HKMex closure has taken another big step for bizarrokind following news that not only have at least four HKMex senior executive have been arrested having been found to be in possession of false bank docs for nearly half a billion in dollars, but that government itself was forced to “shore up confidence” in CY Leung, Hong Kong’s 3rd Chief Executive, whose former top aide was none other Barry Cheung Chun-yuen, founder of the HKMex.

Yet another major geopolitical scandal centered around gold: how original. Read more of this post

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Top Korean civil servants’ wealth averages $2mil

Top Korean civil servants’ wealth averages $2mil

President Park saw an increase in wealth of 120 million won to 2.56 billion won, compared to before taking her post. -Korea Herald/ANN

Oh Kyu-wook
Sun, May 26, 2013
The Korea Herald/Asia News Network

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The average wealth of the government’s top officials is 1.83 billion won (S$2 million), a government report has showed. The government’s Public Ethic Committee disclosed on Friday the assets of 27 top senior civil servants, including President Park Geun-hye, Prime Minister Chung Hong-won and other Cabinet members. Read more of this post

What Is the Theory of Your Firm? Walt Disney’s Theory of Value Creation in Entertainment (1957 Illustration)

What Is the Theory of Your Firm?

by Todd Zenger

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Illustration: © 1957 Disney

If asked to define strategy, most executives would probably come up with something like this: Strategy involves discovering and targeting attractive markets and then crafting positions that deliver sustained competitive advantage in them. Companies achieve these positions by configuring and arranging resources and activities to provide either unique value to customers or common value at a uniquely low cost. This view of strategy as position remains central in business school curricula around the globe: Valuable positions, protected from imitation and appropriation, provide sustained profit streams.

Unfortunately, investors don’t reward senior managers for simply occupying and defending positions. Equity markets are full of companies with powerful positions and sluggish stock prices. The retail giant Walmart is a case in point. Few people would dispute that it remains a remarkable firm. Its early focus on building a regionally dense network of stores in small towns delivered a strong positional advantage. Complementary choices regarding advertising, pricing, and information technology all continue to support its low-cost and flexibly merchandised stores. Read more of this post

The Wave of Transient Advantage

Transient Advantage

by Rita Gunther McGrath

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Strategy is stuck. For too long the business world has been obsessed with the notion of building a sustainable competitive advantage. That idea is at the core of most strategy textbooks; it forms the basis of Warren Buffett’s investment strategy; it’s central to the success of companies on the “most admired” lists. I’m not arguing that it’s a bad idea—obviously, it’s marvelous to compete in a way that others can’t imitate. And even today there are companies that create a strong position and defend it for extended periods of time—firms such as GE, IKEA, Unilever, Tsingtao Brewery, and Swiss Re. But it’s now rare for a company to maintain a truly lasting advantage. Competitors and customers have become too unpredictable, and industries too amorphous. The forces at work here are familiar: the digital revolution, a “flat” world, fewer barriers to entry, globalization.

Strategy is still useful in turbulent industries like consumer electronics, fast-moving consumer goods, television, publishing, photography, and…well, you get the idea. Leaders in these businesses can compete effectively—but not by sticking to the same old playbook. In a world where a competitive advantage often evaporates in less than a year, companies can’t afford to spend months at a time crafting a single long-term strategy. To stay ahead, they need to constantly start new strategic initiatives, building and exploiting many transient competitive advantages at once. Though individually temporary, these advantages, as a portfolio, can keep companies in the lead over the long run. Firms that have figured this out—such as Milliken & Company, a U.S.-based textiles and chemicals company; Cognizant, a global IT services company; and Brambles, a logistics company based in Australia—have abandoned the assumption that stability in business is the norm. They don’t even think it should be a goal. Instead, they work to spark continuous change, avoiding dangerous rigidity. They view strategy differently—as more fluid, more customer-centric, less industry-bound. And the ways they formulate it—the lens they use to define the competitive playing field, their methods for evaluating new business opportunities, their approach to innovation—are different as well. Read more of this post

You Make Better Decisions If You “See” Your Senior Self

You Make Better Decisions If You “See” Your Senior Self

by Hal Hershfield

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The finding: Many people feel disconnected from the individuals they’ll be in the future and, as a result, discount rewards that would later benefit them. But brief exposure to aged images of the self can change that behavior. 

The research: Hal Hershfield ran fMRI scans on subjects and found that the neural patterns seen when they described themselves 10 years in the future were markedly different from those seen when they described their current selves (but similar to those seen when they talked about actors). In a later asset allocation task, people whose brain activity changed the most when they began discussing their future selves were the least likely to favor large long-term gains over small immediate ones. However, in follow-up experiments, when subjects were shown aged images of themselves, that tendency disappeared. Read more of this post

The Fractalist: Memoir of a Scientific Maverick

He Conceived the Mathematics of Roughness

MAY 23, 2013 Jim Holt

The Fractalist: Memoir of a Scientific Maverick
by Benoit B. Mandelbrot
Pantheon, 324 pp., $30.00

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Benoit Mandelbrot, the brilliant Polish-French-American mathematician who died in 2010, had a poet’s taste for complexity and strangeness. His genius for noticing deep links among far-flung phenomena led him to create a new branch of geometry, one that has deepened our understanding of both natural forms and patterns of human behavior. The key to it is a simple yet elusive idea, that of self-similarity.

To see what self-similarity means, consider a homely example: the cauliflower. Take a head of this vegetable and observe its form—the way it is composed of florets. Pull off one of those florets. What does it look like? It looks like a little head of cauliflower, with its own subflorets. Now pull off one of those subflorets. What does that look like? A still tinier cauliflower. If you continue this process—and you may soon need a magnifying glass—you’ll find that the smaller and smaller pieces all resemble the head you started with. The cauliflower is thus said to be self-similar. Each of its parts echoes the whole. Read more of this post

TED curator Chris Anderson: How to Give a Killer Presentation

How to Give a Killer Presentation

by Chris Anderson

A little more than a year ago, on a trip to Nairobi, Kenya, some colleagues and I met a 12-year-old Masai boy named Richard Turere, who told us a fascinating story. His family raises livestock on the edge of a vast national park, and one of the biggest challenges is protecting the animals from lions—especially at night. Richard had noticed that placing lamps in a field didn’t deter lion attacks, but when he walked the field with a torch, the lions stayed away. From a young age, he’d been interested in electronics, teaching himself by, for example, taking apart his parents’ radio. He used that experience to devise a system of lights that would turn on and off in sequence—using solar panels, a car battery, and a motorcycle indicator box—and thereby create a sense of movement that he hoped would scare off the lions. He installed the lights, and the lions stopped attacking. Soon villages elsewhere in Kenya began installing Richard’s “lion lights.”

The story was inspiring and worthy of the broader audience that our TED conference could offer, but on the surface, Richard seemed an unlikely candidate to give a TED Talk. He was painfully shy. His English was halting. When he tried to describe his invention, the sentences tumbled out incoherently. And frankly, it was hard to imagine a preteenager standing on a stage in front of 1,400 people accustomed to hearing from polished speakers such as Bill Gates, Sir Ken Robinson, and Jill Bolte Taylor. Read more of this post

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