The Stingy News Weekly (07/01/2012)
Disrupting the pipeline business
"Perry is quickly discovering the power in cutting out a middleman. In pipelines, heavy oil can only flow if it's diluted. In railcars, it is shipped undiluted - and one shipper observed that undiluted crude is a lot like Bunker C, the sludgy fuel that is used to power ocean-going ships. So now small volumes of heavy crude are being loaded directly into those vessels, skipping refineries altogether. Perry relishes the disruption: 'We don't have to sell this heavy oil to refineries,' he says. Railcars are already 'breaking open the market.'" [Ignore the dumb lifter lead, arbitrage is the important lesson.]
Big Insurance worries about the future
"Life insurance used to be the quintessential safe and boring business in Canada. No more."
Business out of excuses
"As other economies stumble, the Canadian economy looks golden. But any gold is badly tarnished when it comes to productivity. Output per hour worked in the Canadian business sector has grown less than 1% per annum over the past decade. Productivity from labour and capital combined has not grown at all. This is one of the worst records in Canadian history and one of the worst among developed economies."
The great gouge
"In Episode One of The Invisible Hand, we'll see gouging at work everywhere from a Canadian hockey arena, to a busy agricultural market in Mali. We'll even introduce you to a man who was arrested for trying to sell generators at twice their normal price after a storm that left thousands of people homeless. And then we'll show you how to see gouging the way economists like Mike Munger see gouging -- as a force that gets much needed goods where they need to go, when they need to get there fastest."
10 reasons countries fall apart
"Some countries fail spectacularly, with a total collapse of all state institutions, as in Afghanistan after the Soviet withdrawal and the hanging of President Mohammad Najibullah from a lamppost, or during the decade-long civil war in Sierra Leone, where the government ceased to exist altogether. Most countries that fall apart, however, do so not with a bang but with a whimper. They fail not in an explosion of war and violence but by being utterly unable to take advantage of their society's huge potential for growth, condemning their citizens to a lifetime of poverty. This type of slow, grinding failure leaves many countries in sub-Saharan Africa, Asia, and Latin America with living standards far, far below those in the West."
Asness on healthcare
"If we choose to subsidize a portion of the population we should do so openly, using taxation and government spending, which at least shines sunlight on the cost, not through tricky regulation that hides it."
The psychology of discounting
"Consumers often struggle to realise, for example, that a 50% increase in quantity is the same as a 33% discount in price. They overwhelmingly assume the former is better value. In an experiment, the researchers sold 73% more hand lotion when it was offered in a bonus pack than when it carried an equivalent discount (even after all other effects, such as a desire to stockpile, were controlled for)."
Tax amnesty offered to Americans in Canada
"The United States has announced details of a long-promised amnesty program for the millions of Americans living in Canada and offshore - many who haven't filed taxes for years."
Sand in the gears
"Cleaning up this mess is what we mean by 'structural reform.' How to achieve it politically seems like a nightmare to me. Fighting each of ten thousand regulations one by one seems hopeless. Each one sounds good, each one taken alone seems minor, each one has an entrenched interest backing it and an army of bureaucrats whose jobs depend on its enforcement. And the economy dies the death of a thousand cuts. Can you really abolish it all in one fell swoop or grand bargain?"
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