The 8 Most Fascinating Things I Read This Week
Happy Friday! There are more good news articles, commentaries, and analyst reports on the Web every week than anyone could read in a month. Here are the eight most fascinating ones I read this week.
Eichenwald's conversations reveal that a management system known as "stack ranking" -- a program that forces every unit to declare a certain percentage of employees as top performers, good performers, average, and poor -- effectively crippled Microsoft's ability to innovate. "Every current and former Microsoft employee I interviewed -- every one -- cited stack ranking as the most destructive process inside of Microsoft, something that drove out untold numbers of employees," Eichenwald writes. "If you were on a team of 10 people, you walked in the first day knowing that, no matter how good everyone was, 2 people were going to get a great review, 7 were going to get mediocre reviews, and 1 was going to get a terrible review," says a former software developer. "It leads to employees focusing on competing with each other rather than competing with other companies."
2. Timeless wisdom
Nobel-winning psychologist Daniel Kahneman offers a long list of things he's learned over the years to Guardian UK. Some examples:
Human beings cannot comprehend very large or very small numbers. It would be useful for us to acknowledge that fact.
Investment bankers believe in what they do. They don't want to hear that their decisions are no better than chance. The rest of us pay for their delusions.
There is a powerful idea that we should want to be richer. I went to a financial advisor in the States and said: "I don't really want to get richer, but I would like to continue to live like I do." She said: "I can't work with you."
3. Grains of salt
Floyd Norris of TheNew York Timestalks about an important quirk of jobs statistics affecting employment reports:
The reason that few doubt that the jobs picture is getting worse is that they look at the Labor Department's seasonally adjusted figures. But those adjustments most likely overstate reality these days. Employers are acting more cautiously than they did in previous cycles. They add fewer seasonal jobs than they used to, and they therefore get rid of fewer seasonal workers when the season is over.
The result is that the seasonal adjustments make things look better than they are in the winter, when fewer workers are being let go than the government expects, and worse in the spring and summer, when the workers who were not let go cannot be rehired. There is, of course, more than seasonal adjustment going on, but I suspect that the underlying swings are far more modest than the monthly figures seem to indicate.
4. Housing's return, at long last
Homebuilding stocks such as KB Home (NYS: KBH) , Lennar (NYS: LEN) , and NVR (NYS: NVR) have been on a tear this year. Why? Likely because it's really starting to look like housing has bottomed. David Wessel of TheWall Street Journalwrites:
Nearly 10% more existing homes were sold in May than in the same month a year earlier, many purchased by investors who plan to rent them for now and sell them later, an important sign of an inflection point. In something of a surprise, the inventory of existing homes for sale has fallen close to the normal level of six months' worth despite all the foreclosed homes that lenders own. The fraction of homes that are vacant is at its lowest level since 2006.
5. Turning point
Matt O'Brien of the Atlanticpoints out that older workers (age 55+, red line) are about to overtake young workers (age 25-34, blue line) for the first time:
6. Tax cheats
Greece's budget is a mess and has effectively bankrupted the nation. TheWall Street Journalpoints out one reason why: "The economists' conservatively estimate that in 2009 some 28 billion euros in income went unreported. Taxed at 40%, that equates to 11.2 billion euros -- nearly a third of Greece's budget deficit."
Analyst Horace Dediu of Asymco has been following the Mac-PC war for years and recently crunched the numbers to show that, in 2011, Microsoft's PC desktops and laptops outsold Apple's Macs by a less-than 20-to-1 ratio.
Which, sure, is still lopsided. But it's the lowest margin since 1996 and is roughly the same as 1985, shortly after the Mac was first released. And it's significantly tighter than in 2004, the PC's high-water mark, when it was outselling Macs by a ratio approaching 60-to-1.
8. Paying for talent
Brent Schutte of Harris Private Bank shows (link opens PDF file) that income distribution across the U.S. is darn similar to Major League Baseball's payroll:
Percent of income captured by top 1%
Major League Baseball
The article The 8 Most Fascinating Things I Read This Week originally appeared on Fool.com.
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