Uber Cab App Threatens Death of Taxi Dinosaurs

Uber Cab App Threatens Death of Taxi Dinosaurs

People can run into two problems when they need to find a taxi. The first is that they don’t know whether a taxi will be available. The second is that they don’t know when a taxi will be available.

Uber Technologies Inc., a San Francisco-based company, was set up to solve both problems. You can download its application, and it will find out where you are and come pick you up. It will also tell you when it is coming.

In fact, the app comes with a screen that shows exactly where the vehicle is, so you can watch as it makes its way toward you. Once a credit card is in the system, the customer doesn’t have to pay with cash or decide on a tip; everything is automatic. Read more of this post

CIA Chooses: Amazon or IBM? $600 million contract to set up a cloud-computing system shows the growing importance of intelligence-agency business for technology companies

Updated June 11, 2013, 9:47 p.m. ET

CIA Chooses: Amazon or IBM?

By SPENCER E. ANTE

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The battle between International Business Machines Corp. IBM -0.51% andAmazon.com Inc. AMZN -2.24% over a $600 million contract to set up a cloud-computing system for the Central Intelligence Agency shows the growing importance of intelligence-agency business for technology companies.

The competition comes amid extraordinary disclosures of secret government-surveillance programs and shows that even in the rarified world of intelligence agencies, companies selling Internet-based cloud-computing services—like Amazon—are challenging the position of traditional technology vendors.

Companies like IBM have long supplied the U.S. military and intelligence services with computers, software and the know-how to operate them. Now, new contenders like Amazon are getting into the act, drawn by a fresh source of revenue as business spending on technology remains sluggish and by the imprimatur of providing services to clients that have the highest security standards. Read more of this post

An astounding 54% of online display ads weren’t seen by anyone

June 11, 2013, 10:51 a.m. ET

Web Display Ads Often Not Visible

By SUZANNE VRANICA

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The old adage in advertising—that half the money is wasted but no one knows which half—turns out to be as true for the digital world as it ever was for traditional media.

An astounding 54% of online display ads shown in “thousands” of campaigns measured by comScore Inc.SCOR -0.22% between May of 2012 and February of this year weren’t seen by anyone, according to a study completed last month.

Don’t confuse “weren’t seen” with “ignored.” These ads simply weren’t seen, the result of technical glitches, user habits and fraud.

The finding implies that billions of marketing dollars are being poured down a digital drain. Last year, $14 billion was spent on online display advertising, estimates eMarketer, 40% of all online ad spending. Read more of this post

VF Corp, whose portfolio of clothing brands includes North Face, Wrangler, Timberland, laid out an ambitious new five-year target that would be the envy of almost anyone in the apparel industry

June 11, 2013, 5:43 p.m. ET

VF Lays Out Ambitious Growth Plan

By ANDRIA CHENG

VF Corp., VFC +0.57% whose portfolio of clothing brands includes North Face, Wrangler, Timberland and others, on Tuesday laid out an ambitious new five-year target that would be the envy of almost anyone in the apparel industry. The Greensboro, N.C., company, projects that sales will increase almost 60% to $17.3 billion over the next five years. The company already has a track record for strong growth: Last year sales hit $10.9 billion, up 42% over the five-year period from 2008, when sales totaled $7.64 billion. Given its strategy of buying labels to spur growth, acquisitions will continue to play a role as it aims for a five-year compounded annual sales target of 10%, with 8% “organic” growth and 2% growth anticipated from acquisitions. Read more of this post

Ferrari repositions for a one-horse race in ultra-luxury stakes; By creating a cult of exclusivity for their most expensive products, consumers will often shop for items lower down its retail chain in order to buy into brand exclusivity

June 11, 2013 4:32 pm

Ferrari repositions for a one-horse race in ultra-luxury stakes

By Rachel Sanderson in Maranello

At its headquarters amid the cherry orchards and Lambrusco vineyards of Emilia Romagna, Ferrari has built a reputation as haven of prosperity in recession-wrackedItaly. This year, while much of Italian business splutters, Ferrari is adding 250 jobs and handing out bonuses of at least €8,500 to its workers. But Luca di Montezemolo, 65, aristocratic chairman of the flame-red sports car maker, wants to pull even further away from the crowd. After a record €350m in trading profits in 2012 and on the cusp of the launch of its $1.3m LaFerrari, Ferrari plans to ensure its future success not by increasing output but by cutting back production this year by 400 cars to around 6,900 vehicles. Sitting at his red-leather topped desk at Ferrari HQ in Maranello, Mr Montezemolo sweeps back his signature floppy hair as he argues that after a record year for the business it is the ideal time to switch gear on strategy. “I’m talking about fewer cars but this does not mean fewer revenues or profits,” he says. “We want to increase the exclusivity of Ferrari. We want to maintain the value of the used car market. We want to develop the rest of the business like licensing and products.” Read more of this post

Hedge funds battered in quant arms race; Trend-following strategies sputter in volatile markets

June 11, 2013 5:53 pm

Hedge funds battered in quant arms race

By Sam Jones, Hedge Fund Correspondent

At the end of this month, a team of Cantabrigian hedge fund quants will attempt to wipe out rivals from Switzerland – in a computer game. Cantab Capital (assets under management: $6bn) will fight Zug’s Amplitude Capital in Battlefield 3. The gaming shoot out, part of an online league, is the smaller scale and lesser known version of two wars being fought between the biggest names in the quant hedge fund world. The other is more high stakes. A “quant” arms race, involving tens of billions of dollars, is on for big managers to find new markets and new models in which, and with which, to make money and outshine their rivals. Quant hedge funds have always been motivated to stay ahead of their peers, but in the past few years the struggle has intensified for good reason. So-called “trend-following” strategies – which have historically been at the core of what firms such as Man, Winton Capital, Cantab or BlueCrest Capital do – have sputtered since 2010, wrongfooted by range-bound, volatile prices in the futures contracts they trade linked to bonds and equities. Trend following does as it says: funds’ computers look for consistent moves in futures instruments and then follow them, up or down, until the trend reverses. Read more of this post

Australia’s covered bond boom is waning less than two years after the market started as yield-hungry buyers more than double purchases of RMBS

Australian Covered Bond Boom Wanes as RMBS Sales Double

Australia’s covered bond boom is waning less than two years after the market started as yield-hungry buyers more than double purchases of residential mortgage-backed securities.

Issuance of the debt, backed by the borrower and mortgages that stay on its balance sheet, fell 64 percent to $9.9 billion this year, data compiled by Bloomberg show. The decline in Australian offerings outpaced a 41 percent slump from banks worldwide, according to the data.

Renewed appetite for RMBS, as the market recovers after being decimated by the 2008 U.S. subprime collapse, has seen sales surge while banks reserve covered-bond allowances for when market conditions worsen. Commonwealth Bank of Australia (CBA)’s 2017 covered securities offered just 33 basis points more than swaps last month, compared with a 47 basis-point premium on shorter-dated unsecured notes sold by Westpac Banking Corp., Bloomberg-compiled data show. Global financial debt pays a 141 basis-point spread, Bank of America Merrill Lynch data show. Read more of this post

Swedish Credit Drives Frenzy in Dragon Tattoo Quarter

Swedish Credit Drives Frenzy in Dragon Tattoo Quarter

One of Stockholm’s most popular attractions is a guided tour of the Soedermalm district streets featured in Stieg Larsson’s bestselling book “The Girl With The Dragon Tattoo.” Buying a home in the former working-class neighborhood is far less accessible.

A one-bedroom, 55-square meter (592-square feet) apartment in Hoegalidsgatan, in the neighborhood where Larsson’s troubled heroine Lisbeth Salander grew up, sold last month for 3.75 million kronor ($569,000), 17 percent above the listing price, after a bidding war involving nine parties.

That level of demand is typical in the Swedish capital, where a shortage of construction, a population boom and mortgage rates below 3 percent have pushed prices in central Stockholm up 35 percent since early 2009. Borrowing for home purchases has in turn fueled record household debt across the country. That’s sparking concern among policymakers over potential damage to the economy and preventing the central bank from cutting rates, even as Sweden’s exporters say action must be taken to weaken the currency to protect thousands of jobs. Read more of this post

Nestle’s Nespresso to Face New Mondelez Copycat Capsule

Nestle’s Nespresso to Face New Mondelez Copycat Capsule

Mondelez International Inc., (MDLZ) the world’s second-biggest coffee maker, will start selling Nespresso-compatible capsules across Europe this fall, posing the sternest competitive challenge yet to the Nestle SA (NESN) brand. Mondelez, based in Deerfield, Illinois, will sell the knock-off capsules under its Jacobs and Carte Noire brands in Germany, France, Austria and Switzerland in the second half of 2013, Roland Weening, vice president of strategy, marketing and innovation, said in an interview in London yesterday. The move brings a deep-pocketed entrant to the fastest-growing part of the $80 billion global coffee market at a time when Nespresso’s growth has slowed. Nestle, of Vevey, Switzerland, has filed patent-infringement lawsuits against some rivals that introduced capsules compatible with Nespresso machines, yet to date has not been able to stem the flow of copycat capsules from producers including D.E Master Blenders 1753. (DE) That comes as Nestle has said sales growth this year may be at the low end of its long-term target. Read more of this post

The Rise and Fall of Economic History at MIT

The Rise and Fall of Economic History at MIT

Peter Temin Massachusetts Institute of Technology (MIT) – Department of Economics; National Bureau of Economic Research (NBER)

June 5, 2013
MIT Department of Economics Working Paper No. 13-11

Abstract: 
This paper recalls the unity of economics and economics at MIT before the Second World War, and their divergence thereafter. Economic history at MIT reached its peak in the 1970s with three teachers of the subject to graduates and undergraduates alike. It declined until economic history vanished both from the faculty and the graduate program around 2010. The cost of this decline to current education and scholarship is suggested at the end of the narrative. This paper was written for a conference on the history of the MIT economics department held at Duke University in early 2013.

Expectation Gap and Corporate Fraud: Is Public Opinion Reconcilable with Auditors’ Duties? Expectation gap is unlikely to disappear given that auditor is unable or unwilling to assess the subjective components of fraudulent behavior

Expectation Gap and Corporate Fraud: Is Public Opinion Reconcilable with Auditors’ Duties?

Jeffrey R. Cohen Boston College – Department of Accounting

Yuan Ding China Europe International Business School (CEIBS)

Cédric Lesage HEC School of Management, Paris

Hervé Stolowy HEC Paris – Accounting and Management Control Department

January 15, 2013
CAAA Annual Conference 2013 

Abstract:      
The objective of this paper is to answer the key question of whether auditors’ view of their fraud detection duties is reconcilable with the public’s view. We perform a content analysis of press articles covering 37 U.S. corporate fraud cases discovered during the period 1992-2005. We compare the auditors’ duties (as described by the auditing standards) with the public opinion represented by these press articles. Consistent with Porter (1993), we identify three types of divergence between public expectations and auditing standards: deficient performance (that we label “Type 1”), deficient standards (“Type 2”) and unreasonable expectations (“Type 3”). The Type 1 gap can be reduced by strengthening auditors’ willingness and ability to apply existing auditing standards on fraud detection. The Type 2 gap can be narrowed by improving the existing auditing standards. The Type 3 gap, however, concerns highly subjective criteria beyond the auditors’ usual sphere of control. The results of our analysis confirm that the expectation gap is unlikely to disappear given that the rational auditor is unable or unwilling to assess the subjective components of fraudulent behavior, and that value judgments, as demonstrated in the media, retain their popularity.

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