Last Monday's Wall Street Journal featured an article that illustrated a trend in investment firms obtaining information through the Freedom of Information Act to make strategic decisions. In particular, the article highlighted SAC Capital Advisors contacting the Food and Drug Administration for information regarding a drug from Vertex Pharmaceuticals. SAC was able to use this information and purchase 13,500 shares of Vertex, whose stock rose by over 60% in a single day when further benign results were announced.
According to the United States Department of Justice, Freedom of Information Act "is a law that gives you the right to access information from the federal government." Signed into law in 1966, the Act "provides individuals with a statutory right of access to certain federal agency records." There are exemptions, and one of which is concerned with "business trade secrets or other confidential commercial or financial information."
While investors typically don't solely rely on the information from the Act, the valuable piece of information "helps them to piece together investment strategies or evaluate a company's prospects." Over 650,000 requests were received in fiscal year 2012, out of which over 93% were released in full or part. Within the different agencies, Department of Homeland Securities overwhelmingly received the most requests.
Sources:
Showing posts with label Government. Show all posts
Showing posts with label Government. Show all posts
Sunday, September 29, 2013
Sunday, July 29, 2012
NBC's Disgraceful Decision to Skip Opening Ceremony Tribute to Terror Victims
Having exclusive rights to broadcast Olympic coverage in the United States is a double-edged sword for NBC. It draws massive viewership, but its decisions are heavily scrutinized, particularly due to the time difference between London and United States, and hence NBC's ability to control what is broadcast to the American audience. Many objected to NBC's decision not to live stream the Opening Ceremony, which happened in the early afternoon hours in the United States. Instead, NBC tape-delayed the show for prime time on both coasts, explaining that the Opening and Closing Ceremonies are "entertainment spectacles best shown at a time when friends and family are able to gather together to watch." Criticized or not, the decision paid off for NBC. The Opening Ceremony Friday drew "the best overnight ratings ever for an Olympics held outside the United States," a 7% increase in ratings from the Beijing Opening Ceremony.
The debates will continue, but one of its decisions Friday night deserves heavy criticism. When a tribute was played during the ceremony for terror victims, NBC instead decided to showcase an interview with Michael Phelps. This was purely a monetary decision aimed to boost its ratings, as the cost of US TV rights fees topped $1.18 billion. Upon being questioned for this particular decision, NBC spokesman Greg Hughes admitted that its "programming is tailored for the US audience." However, the crucial issue is that the tribute was not irrelevant to United States. In fact, the tribute was more relevant to United States than any other countries of the world. Great Britain has been United States' staunchest ally in the War of Terror. In Afghanistan alone, over 400 British troops have sacrificed their lives, more than the toll Britain suffered from its recent Falklands War. The tribute on Friday was widely interpreted as a memorial for the 52 victims of terrorist bombings in 2005, which occurred on July 7, the very next day after London was awarded these 2012 Olympic Games. The 2005 bombings were believed to be al-Qaeda retribution for British involvement in the conflicts in Afghanistan and Iraq.
While it is understandable that NBC has financial incentives to boost its audience with its selection of content exclusively broadcasted to Americans, this particular decision was ignominious. July 7 bombings were the 9/11 attacks for Britain, and occurred while the country was still in jubilation knowing it would host the 2012 Olympics. For any country to purposefully avoid such dedicated tribute at that moment for the marginal financial gain is classless, but in particular for NBC on behalf of the United States to do so was even more disgraceful.
Sources:
The debates will continue, but one of its decisions Friday night deserves heavy criticism. When a tribute was played during the ceremony for terror victims, NBC instead decided to showcase an interview with Michael Phelps. This was purely a monetary decision aimed to boost its ratings, as the cost of US TV rights fees topped $1.18 billion. Upon being questioned for this particular decision, NBC spokesman Greg Hughes admitted that its "programming is tailored for the US audience." However, the crucial issue is that the tribute was not irrelevant to United States. In fact, the tribute was more relevant to United States than any other countries of the world. Great Britain has been United States' staunchest ally in the War of Terror. In Afghanistan alone, over 400 British troops have sacrificed their lives, more than the toll Britain suffered from its recent Falklands War. The tribute on Friday was widely interpreted as a memorial for the 52 victims of terrorist bombings in 2005, which occurred on July 7, the very next day after London was awarded these 2012 Olympic Games. The 2005 bombings were believed to be al-Qaeda retribution for British involvement in the conflicts in Afghanistan and Iraq.
While it is understandable that NBC has financial incentives to boost its audience with its selection of content exclusively broadcasted to Americans, this particular decision was ignominious. July 7 bombings were the 9/11 attacks for Britain, and occurred while the country was still in jubilation knowing it would host the 2012 Olympics. For any country to purposefully avoid such dedicated tribute at that moment for the marginal financial gain is classless, but in particular for NBC on behalf of the United States to do so was even more disgraceful.
Sources:
- http://www.usatoday.com/sports/olympics/london/story/2012-07-28/NBC-tribute-to-victims-Michael-Phelps/56556494/1
- http://sports.yahoo.com/blogs/olympics-fourth-place-medal/tape-delayed-opening-ceremony-turns-ratings-gold-nbc-153513638--oly.html
- http://www.guardian.co.uk/news/datablog/2009/sep/17/afghanistan-casualties-dead-wounded-british-data
Wednesday, January 4, 2012
Europe at the Brink – A WSJ Documentary
The Wall Street Journal recently published a documentary about the origin of debt crisis in Europe, citing imperfect union as the root cause. After World War II, economic ties were sought to prevent future conflicts. 1957 Treaty of Rome established European Economic Community. In the next decades, the idea of a unifying currency was sought, finally leading to the rise use of euro today. People hoped that this would be the start of a united Europe. However, while there was monetary union, there lacked fiscal union. All countries shared same policies regarding the supply and value of euro, but each country differed in its growth and governmental policies, helping to plants the seeds of current situation. Due to low borrowing costs, counties like Greece took on debt to offset its own weak internal growth.
In October 2009, Greek debt projected to be 3% of its GDP was actually 12%. Foreign investors panicked, and costs of borrowing to Greece increased. Given the abundance of countries and governments in the euro-zone, actions were slow to be implemented. In May 2010, Greece needed a bailout for its debt, but anxiety about Greek fiscal soundness continued. Furthermore, the worry began to spread through the continent. Particularly distressing was Italy, the euro-zone’s third largest economy.
The question looms whether to form a tighter fiscal union or let the countries dissolve further apart. The premise of the euro was for the countries to converge their economies, but such has not been observed. What direction Europe would go also remains a mystery; some even speculate one or more members leaving the zone this year. Disciplined approach to national finance is now crucial. The stake of the entire world economy is contingent on the approaches Europeans take.
Source:
Tuesday, November 8, 2011
Berlusconi to Resign
On Tuesday, Italian Prime Minister Silvio Berlusconi announced that he will resign after parliament approves economic reforms. The announcement comes after Parliament passed a budget measure with 308 votes, but saw over half of the 630 lawmakers not taking part in the vote, a vivid indication that Berlusconi no longer has the support of a majority in Parliament.
Italy has the third largest economy in the eurozone and eighth largest in the world. Struggling European countries like Greece, Ireland, and Portugal already had to be bailed out. Although currently solvent, Italy poses a tremendous challenge with its 1.9 trillion euro debt, or about 120% of its economic output, that Europe can't afford to bail out. The Italian bond yield reached 6.77% on Tuesday, dangerously approaching the 7% mark that prompted bailouts for Portugal and Ireland.
In the United States, the news of the impending resignation pushed Dow up 101 points to close at 12,170.18. Stock markets in Italy, Germany, and France also rose slightly.
Sources:
Italy has the third largest economy in the eurozone and eighth largest in the world. Struggling European countries like Greece, Ireland, and Portugal already had to be bailed out. Although currently solvent, Italy poses a tremendous challenge with its 1.9 trillion euro debt, or about 120% of its economic output, that Europe can't afford to bail out. The Italian bond yield reached 6.77% on Tuesday, dangerously approaching the 7% mark that prompted bailouts for Portugal and Ireland.
In the United States, the news of the impending resignation pushed Dow up 101 points to close at 12,170.18. Stock markets in Italy, Germany, and France also rose slightly.
Sources:
- http://finance.yahoo.com/news/Berlusconi-promises-to-resign-apf-3530821317.html?x=0&sec=topStories&pos=2&asset=&ccode=
- http://edition.cnn.com//2011/11/08/world/europe/italy-economy/index.html
- http://finance.yahoo.com/news/Stocks-rise-after-Berlusconi-apf-803223079.html?x=0&sec=topStories&pos=4&asset=&ccode=
Thursday, October 13, 2011
Is China Getting Richer?
People these days often hear about China's economic growth and its enormous impact on the global economy. Yes, China contributed 19% of the world's economic growth in 2010, and that figure is expected to increase to 24% this year. Western companies have invested in China to stay competitive in one of the world's fastest-growing market. This Tuesday, Boeing announced that it officially opened a service center in Beijing. China's travel is expected to grow annually at 7.6% over the next 20 years, and Boeing, which already has 800 of its airplane units in Chinese airlines, hopes to maintain the company's majority share of the market of commercial airlines in China.
But is this really indicative of China getting richer? A recent New York Times article argues that while its economy experiences rapid growth, China sees its households struggling to keep up, as those making more than the average usually save most of their earnings. While the US saves roughly 5% of the disposable income, that figure approaches 40% in China. Various factors, from depressed wages and soaring home prices, impel the Chinese to save. However, the interest rate on saving accounts are artificially low, not able to keep up with the rising inflation rate. As a result, consumption levels are low. Those who benefit from the savings are state institutions, fueling the rise of real-estate developers and government spending on railroad. As for the commoners, they have little choices. Many wish to avoid investing in the volatile stock market, and laws restrict the ability to invest overseas.
The most convenient outlet for many Chinese then, became the real estate market. Compared to the same period a year ago, Chinese investment in real estate was up 32.9% during the first half the year. Real estate prices have overall tripled in the past five years. Many have been concerned about the effects of a housing bubble burst. This is a legitimate concern for the United States, as China's growth is crucial for the multinational companies investing there; United States sold $92 billion in goods and services to China last year. But the focus still hasn't been on domestic consumption. So far, much attention has been focused on cheap land and capital for heavy investing. The soundness of the Chinese economy will need to depend on how the households can spend, not just the state corporations.
So is China getting richer? It depends on from what perspective one looks at. Is the GDP growing? Yes. Are foreign investments increasing? Yes. But are the average household better off? As ambiguous as the question may sound, the answer may just be "not exactly."
Sources:
But is this really indicative of China getting richer? A recent New York Times article argues that while its economy experiences rapid growth, China sees its households struggling to keep up, as those making more than the average usually save most of their earnings. While the US saves roughly 5% of the disposable income, that figure approaches 40% in China. Various factors, from depressed wages and soaring home prices, impel the Chinese to save. However, the interest rate on saving accounts are artificially low, not able to keep up with the rising inflation rate. As a result, consumption levels are low. Those who benefit from the savings are state institutions, fueling the rise of real-estate developers and government spending on railroad. As for the commoners, they have little choices. Many wish to avoid investing in the volatile stock market, and laws restrict the ability to invest overseas.
The most convenient outlet for many Chinese then, became the real estate market. Compared to the same period a year ago, Chinese investment in real estate was up 32.9% during the first half the year. Real estate prices have overall tripled in the past five years. Many have been concerned about the effects of a housing bubble burst. This is a legitimate concern for the United States, as China's growth is crucial for the multinational companies investing there; United States sold $92 billion in goods and services to China last year. But the focus still hasn't been on domestic consumption. So far, much attention has been focused on cheap land and capital for heavy investing. The soundness of the Chinese economy will need to depend on how the households can spend, not just the state corporations.
So is China getting richer? It depends on from what perspective one looks at. Is the GDP growing? Yes. Are foreign investments increasing? Yes. But are the average household better off? As ambiguous as the question may sound, the answer may just be "not exactly."
Sources:
Wednesday, October 5, 2011
Livery Cab Bill Debate
Yellow taxis have become an icon of New York City, but their concentration around central Manhattan and the airports is undeniable. Many have complained that it's nearly impossible to catch a cab elsewhere in the city, and it's not difficult to note the paucity of the yellow cabs in the so-called outer boroughs. Currently, only yellow cabs are authorized to pick up passengers on the street who hail for service. To address this issue, a bill has been sitting at Governor Andrew Cuomo's desk that would authorize livery (black) cabs to pick up street hails in the outer boroughs. Currently, livery cabs pick up passengers on pre-arranged trips.
Aside from the access issue, proponents argue that this would generate millions for the city. Currently, drivers of the traditional yellow cabs spend hundreds of thousands of dollars to buy medallions, their exclusive right to pick up street hails within the city. By extending these medallion permits to livery cabs, "the tax revenues ... would be something like a billion dollars into the city’s budget," Mayor Bloomberg remarks.
Opposition comes from current yellow cab drivers, who argue that by leasing the right to pick up street hails to livery cabs, the value of their own medallions will be vastly diminished. On Tuesday, hundreds of cab drivers protested outside Governor Cuomo's office, urging him to veto the bill that would allow the livery cabs' operations. Furthermore, oppositions argue that "livery drivers in the outer boroughs would ignore prearranged pickups in favor of street hails."
Governor Cuomo has remarked that “the optimum goal is to design a plan that provides taxi access to the outer boroughs, access to the disabled, revenue for the city, and respects the medallion franchise.” The root cause of the problem is the current lack of cabs in outer boroughs. This disproportion is vividly illustrated by the fact that while 80% of the city's population lives outside Manhattan, 97% of the pickups are in central Manhattan or at the city's two airports, according to GPS data collected by taxi commission.
Most yellow cabs drivers stay within the airports and central Manhattan, where the demand for the cabs is the greatest. The situation is a microcosm of game theory practice. Each driver's dominant strategy is to stay in these hot-spots, for they're more likely to earn more revenue. However, if most drivers practice this method, all of them may be worse off, given that government intervention may deal with the lack of cabs in outer boroughs, through measures like authorizing the livery cabs, which would indirectly devalue all cab drivers' medallions. To settle this uneasy dilemma, an equilibrium needs to be sought that balances the desire of cab drivers to serve hot spots for more revenue, and the access for outer boroughs for citizens there. Within outer boroughs, secondary hot spots can be identified, including trains stations, shopping malls, sports venues, and other popular places. Monetarily incentives could be given to yellow cab drivers to pick up passengers from these "secondary hot spots" in the outer boroughs to compensate for their service in these less-profitable regions. This internal solution, if operational, may eradicate the need for external livery cabs and their rights to pick up street hails in the outer boroughs.
Sources:
Aside from the access issue, proponents argue that this would generate millions for the city. Currently, drivers of the traditional yellow cabs spend hundreds of thousands of dollars to buy medallions, their exclusive right to pick up street hails within the city. By extending these medallion permits to livery cabs, "the tax revenues ... would be something like a billion dollars into the city’s budget," Mayor Bloomberg remarks.
Opposition comes from current yellow cab drivers, who argue that by leasing the right to pick up street hails to livery cabs, the value of their own medallions will be vastly diminished. On Tuesday, hundreds of cab drivers protested outside Governor Cuomo's office, urging him to veto the bill that would allow the livery cabs' operations. Furthermore, oppositions argue that "livery drivers in the outer boroughs would ignore prearranged pickups in favor of street hails."
Governor Cuomo has remarked that “the optimum goal is to design a plan that provides taxi access to the outer boroughs, access to the disabled, revenue for the city, and respects the medallion franchise.” The root cause of the problem is the current lack of cabs in outer boroughs. This disproportion is vividly illustrated by the fact that while 80% of the city's population lives outside Manhattan, 97% of the pickups are in central Manhattan or at the city's two airports, according to GPS data collected by taxi commission.
Most yellow cabs drivers stay within the airports and central Manhattan, where the demand for the cabs is the greatest. The situation is a microcosm of game theory practice. Each driver's dominant strategy is to stay in these hot-spots, for they're more likely to earn more revenue. However, if most drivers practice this method, all of them may be worse off, given that government intervention may deal with the lack of cabs in outer boroughs, through measures like authorizing the livery cabs, which would indirectly devalue all cab drivers' medallions. To settle this uneasy dilemma, an equilibrium needs to be sought that balances the desire of cab drivers to serve hot spots for more revenue, and the access for outer boroughs for citizens there. Within outer boroughs, secondary hot spots can be identified, including trains stations, shopping malls, sports venues, and other popular places. Monetarily incentives could be given to yellow cab drivers to pick up passengers from these "secondary hot spots" in the outer boroughs to compensate for their service in these less-profitable regions. This internal solution, if operational, may eradicate the need for external livery cabs and their rights to pick up street hails in the outer boroughs.
Sources:
Friday, July 15, 2011
Light Bulbs Debate: It's not about the Money
Should the government force citizens to purchase something more expensive in the short-run but more cost-saving in the long run? As the nation seeks methods to lower its energy usage, a 2007 legislation passed to eliminate the manufacturing and sale of traditional incandescent light bulbs, starting with the 100-watt bulb in 2012. Natural Resources Defense Council claims that by 2020, the country would save $12.5 billion annually, translating to consumers saving about $85 on their power bills.
It's noteworthy to note that the legislation was signed into law by former President George W. Bush, and now Texas Republicans are at the forefront of opposition against the measure. This year, Governor Rick Perry signed a law that exempted Texas from the new energy standards. Representative Michael Burgess further claims that “the federal government has no right to tell me or any other citizen what type of light bulb to use at home.” Indeed, the traditional light bulb has become "a pear-shaped symbol of personal freedom" to those against government's federal overreach.
It is about the personal choice. Presently, hybrid cars offer more fuel-efficiency, but at a greater initial cost. Consumers weigh the benefits and costs of the vehicle before making a choice on their own. Opposition claims that consumers should have the same right to decide and buy the cheapest option on the market. It's not about the money saved in the long-run; in Texas alone, efficient bulbs are proposed to save $1.1 billion. Rather, it's about the fear of the precedent this may create. Recently, the House voted to save the 100-watt bulb for another year. The debate is far from over. Few would disagree that the nation needs an effective method to save energy usage. But how that is done becomes and remains an intricate debate.
Sources:
It's noteworthy to note that the legislation was signed into law by former President George W. Bush, and now Texas Republicans are at the forefront of opposition against the measure. This year, Governor Rick Perry signed a law that exempted Texas from the new energy standards. Representative Michael Burgess further claims that “the federal government has no right to tell me or any other citizen what type of light bulb to use at home.” Indeed, the traditional light bulb has become "a pear-shaped symbol of personal freedom" to those against government's federal overreach.
It is about the personal choice. Presently, hybrid cars offer more fuel-efficiency, but at a greater initial cost. Consumers weigh the benefits and costs of the vehicle before making a choice on their own. Opposition claims that consumers should have the same right to decide and buy the cheapest option on the market. It's not about the money saved in the long-run; in Texas alone, efficient bulbs are proposed to save $1.1 billion. Rather, it's about the fear of the precedent this may create. Recently, the House voted to save the 100-watt bulb for another year. The debate is far from over. Few would disagree that the nation needs an effective method to save energy usage. But how that is done becomes and remains an intricate debate.
Sources:
Monday, June 27, 2011
Video Games and Freedom
Today, the Supreme Court voted 7-2 to strike down a California law prohibiting the sale of "violent" video games to children. Former governor Arnold Schwarzenegger, who signed the law in 2005, believes that the government has a "responsibility" to protect kids and communities "against the effects of games that depict ultraviolent actions." But writing for the majority today, Justice Antonin Scalia claims that the law "is seriously overinclusive," stripping "the First Amendment rights of young people whose [family members] think violent video games are a harmless pastime."
The video game ban draws parallelism to the movie ratings. Children under the age of 17 require an accompanying adult over the age of 18 to view R-rated movies. There currently also exists the NC-17 rating, which prohibits those under 17 in all circumstances. It is important to note though, that any ban on video games can only prohibit the sale, not the usage. The analogy to movies begins to fall here, since video games are played at home, while movies are played in theaters, where restrictions can be effectively enforced. Government cannot, on practical terms, prohibit children from playing of violent video games at home. The California ban would've been similar to the R rating. It is the parent giving the approval, but in the end, it is the child playing the game, or watching the movie. But is that the effective solution against violent video games?
Studies have shown that violent video games have detrimental effects. The American Academy of Pediatrics concluded in a 2009 study that "exposure to different forms of media ... can contribute to aggressive behavior, desensitization to violence, nightmares and fear of being harmed." However, whether or not there is parental consent does not alter the games' effects. Furthermore, there is no NC-17 equivalent of video games to truly contain the effects. If the government truly wants to mitigate the effects of violent video games on children, it should focus on informing parents and the children about the negative effects. Restricting children's ability to buy them on their own is not effective in reducing the negative effects; they still have legal outlets to play the games, which causes the same negative effects. This isn't battle against drugs or even controlling movie viewing. When it comes down legal domestic activities like playing video games, violent or not, there can be no containment, only education and information.
Sources:
The video game ban draws parallelism to the movie ratings. Children under the age of 17 require an accompanying adult over the age of 18 to view R-rated movies. There currently also exists the NC-17 rating, which prohibits those under 17 in all circumstances. It is important to note though, that any ban on video games can only prohibit the sale, not the usage. The analogy to movies begins to fall here, since video games are played at home, while movies are played in theaters, where restrictions can be effectively enforced. Government cannot, on practical terms, prohibit children from playing of violent video games at home. The California ban would've been similar to the R rating. It is the parent giving the approval, but in the end, it is the child playing the game, or watching the movie. But is that the effective solution against violent video games?
Studies have shown that violent video games have detrimental effects. The American Academy of Pediatrics concluded in a 2009 study that "exposure to different forms of media ... can contribute to aggressive behavior, desensitization to violence, nightmares and fear of being harmed." However, whether or not there is parental consent does not alter the games' effects. Furthermore, there is no NC-17 equivalent of video games to truly contain the effects. If the government truly wants to mitigate the effects of violent video games on children, it should focus on informing parents and the children about the negative effects. Restricting children's ability to buy them on their own is not effective in reducing the negative effects; they still have legal outlets to play the games, which causes the same negative effects. This isn't battle against drugs or even controlling movie viewing. When it comes down legal domestic activities like playing video games, violent or not, there can be no containment, only education and information.
Sources:
- Supreme Court Case 08-1448: Brown v. Entertainment Merchants Association
- http://www.cnn.com/2011/US/06/27/scotus.video.games/index.html?hpt=hp_t2
- http://blogs.wsj.com/health/2011/06/27/video-game-violence-what-the-science-shows/
- http://www.foxnews.com/scitech/2011/06/27/supreme-court-to-rule-on-violent-video-games-for-kids/?test=latestnews
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