Paul Kedrosky's Infectious Greed

Just back from a week in Europe. Totally exhausted still. Some catch-up.

• Real Men Don’t Miss a Season (Source)
• This Season’s Snowiest Resorts (Source)
• The Wirecutter | A List of the Best Gadgets (Source)
• Euro fix a con trick for the desperate (Source)

For those of you interested in other random things financial, a few of my current positions, whether directly or via options:

• Longs: UUP, GLD, PCY,  RWX
• Shorts: RIMM, SNE, NOK, SPY, EEM, XLI, XLF, XME, XLK

I’m generally of the view that, assuming the Euro wheels don’t come off first, we get a screamer of a bounce higher sometime soon, and then trade off into Q1 2012, by which time we revisit, say, 800-900 on the S&P as the world comes unglued against $0.80 in earnings on the S&P. Sometime in 2012, likely early, we will get the best prices of the current cycle for equities, and then we will tumble cheerfully deeper into depression as austerity bites hard here and in Europe.

Thematically, I’m still big on the idea that a host of consumer electronics companies being clobbered, mostly while people are ignoring them for some bizarre reason. So I remain in my year-long short in RIMM (even if worried that activists are going to mess me up), SNE, NOK, etc. I’m also short EEM in a paired trade against PCY, largely as a crash trade where emerging sovereign debt outperforms emerging equities. I’m also short a host of U.S. sector ETFs as I have been since June-ish, a trade that started terribly and has done much better ever since.  On the long side, the dollar is another crash trade, which I have done via options in a sort of bull strangle, and I’m also long real estate via RWX, mostly because I like the idea that the second derivative is tapering and people hate it more than I do.

Looking forward slightly, I imagine that we will see that bounce very shortly, and it could be very strong indeed, causing me to hedge these holdings fairly dramatically, and even close a few out.

[Update] Well, that was fast. Apparently we are bouncing right now. Who knew I would call the bounce so closely? Monkeys, typewriters, etc.

New paper:

Daily Deals: Prediction, Social Diffusion, and Reputational Ramifications

Daily deal sites have become the latest Internet sensation, providing discounted offers to customers for restaurants, ticketed events, services, and other items. We begin by undertaking a study of the economics of daily deals on the web, based on a dataset we compiled by monitoring Groupon and LivingSocial sales in 20 large cities over several months. We use this dataset to characterize deal purchases; glean insights about operational strategies of these firms; and evaluate customers sensitivity to factors such as price, deal scheduling, and limited inventory. We then marry our daily deals dataset with additional datasets we compiled from Facebook and Yelp users to study the interplay between social networks and daily deal sites. First, by studying user activity on Facebook while a deal is running, we provide evidence that daily deal sites benefit from significant word-of-mouth effects during sales events, consistent with results predicted by cascade models. Second, we consider the effects of daily deals on the longer-term reputation of merchants, based on their Yelp reviews before and after they run a daily deal. Our analysis shows that while the number of reviews increases significantly due to daily deals, average rating scores from reviewers who mention daily deals are 10% lower than scores of their peers on average.

via [1109.1530] Daily Deals: Prediction, Social Diffusion, and Reputational Ramifications.

• Yeah, remember daily deals? RT @nytimesbusiness: Deal Sites Have Fading Allure for Merchants http://t.co/VGjOLKSM ->
• Cool idea: entire blog where people share their tech work rigs – http://t.co/HEZYke6V / via @drewconway ->
• I generally loathe EconTalk, but this on economics from a philosophy of science perspective was non-awful http://t.co/lkQk7bBd ->
• There is a lovely Irish pub across the street from the Spanish Central Bank in Madrid. #EuroCrisisIronies ->
• .@yessmiss Middle-aged, May-December, smoochy, different surnames, and the giveaway: They were happy about our delay on ground in Atlanta. in reply to yessmiss ->

• Microsoft security update removes Google Chrome as malware. Unrelated: Google removes Microsoft from Interweb. http://t.co/dkZWOY4F ->
• Enough small business boosterism, please – http://t.co/JacF9e5H ->
• It's so unsettling to be long all these things I don't like, from the US dollar to the 30-year. Huge cognitive dissonance. ->
• Vaclav Smil: Why Steve Jobs Is No Edison http://t.co/6xRK7aoK /via @revkin ->
• Being short RIMM: The bearish gift that keeps on giving. WSJ story today was good reminder why. http://t.co/wFMdXC89 ->
• 200 countries, 200 years, 4 minutes. http://t.co/rDqo76ij ->

• Michael Lewis goes to California – http://t.co/IreXdaxa ->
• The glib notion that startups do best with no money is up there with the idea that asphyxiophilia is the path to great sex. ->
• Okay, this is political, but it's so surreal that it's non-partisan: Rick Perry, Bad Lip-Reading – http://t.co/yxLHnlG8! ->
• .@shefaly Sadly, not online. A private event here in Madrid, Spain. in reply to shefaly ->
• Gave a talk tonight cleverly combining yoga clothing, Arc'teryx, dirtbag skiers, @Richard_Florida, and Newtonian physics. Do I win? ->

The ever-interesting George Magnus of UBS talks Europe today on Tom Keene’s Bloomberg show. I’d embed it, but I can’t figure out to stop it from auto-starting.

Michael Lewis continues his series on seriously screwed economies around the world with this visit to California (where he lives). It’s better than his Germany installment, if not as much as his fun as his entries on Greece and Iceland.

[Arnold Schwarzenegger has] got to be one of the world’s most recognizable people, but he doesn’t appear to worry that anyone will recognize him, and no one does. It may be that people who get out of bed at dawn to jog and Rollerblade and racewalk are too interested in what they are doing to break their trance. Or it may be that he’s taking them by surprise. He has no entourage, not even a bodyguard. His former economic adviser, David Crane, and his media adviser, Adam Mendelsohn, who came along for the ride just because it sounded fun, are now somewhere far behind him. Anyone paying attention would think, That guy might look like Arnold, but it can’t possibly be Arnold, because Arnold would never be out alone on a bike at seven in the morning, trying to commit suicide. It isn’t until he is forced to stop at a red light that he makes meaningful contact with the public. A woman pushing a baby stroller and talking on a cell phone crosses the street right in front of him and does a double take. “Oh . . . my . . . God,” she gasps into her phone. “It’s Bill Clinton!” She’s not 10 feet away, but she keeps talking to the phone, as if the man were unreal. “I’m here with Bill Clinton.”

“It’s one of those guys who has had a sex scandal,” says Arnold, smiling.

“Wait . . . wait,” says the woman to her phone. “Maybe it’s not Bill Clinton.”

Before she can make a positive identification, the light is green, and we’re off.

via California and Bust | Business | Vanity Fair.

Strange and magnificent stuff:

The Ten Thousand Kims

In the Korean culture the family members are recorded in special family books. This makes it possible to follow the distribution of Korean family names far back in history. It is here shown that these name distributions are well described by a simple null model, the random group formation (RGF) model. This model makes it possible to predict how the name distributions change and these predictions are shown to be borne out. In particular, the RGF model predicts that, for married women entering a collection of family books in a certain year, the occurrence of the most common family name “Kim” should be directly proportional the total number of married women with the same proportionality constant for all the years. This prediction is also borne out to high degree. We speculate that it reflects some inherent social stability in the Korean culture. In addition, we obtain an estimate of the total population of the Korean culture down to year 500 AD, based on the RGF model and find about ten thousand Kims.

via [1109.6221] The Ten Thousand Kims.