8 Fascinating Reads


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 eight fascinating ones I read this week.

Poor incentives
Municipalities around the country are trying to crack down on plastic-bag usage at grocery stores, many by offering discounts to customers with reusable bags. But Tatiana Homonoff of Princeton found an interesting trend:

I investigate the effect of a five-cent shopping bag tax imposed in the Washington Metropolitan Area. Despite the small size of the incentive, I find that the tax decreased the fraction of customers using a disposable bag by a substantial amount. In contrast, a similar policy that offered customers a five-cent bonus for reusable bags generated virtually no effect on behavior.

Same financial incentive, vastly different outcomes.

Rate of return
According to

On Monday, tiny start-up Contrail Systems was in stealth mode. On Tuesday it officially launched. Today, Juniper Networks bought it for $176 million.

Contrail's founders, employees, and investors are sharing $57.5 million in cash and almost 6 million shares of Juniper stock.

Not bad for two days on the market.

Crystal balls
As analysts publish their stock outlooks for 2013, Barry Ritholtzlooks back at how predictions made in 2007 fared:

Jon Birger, senior writer, Fortune Investors Guide 2008
"Smart investors should buy [Merrill Lynch] stock before everyone else comes to their senses."
Merrill's shares plummeted 77 percent.

Elaine Garzarelli, president of Garzarelli Capital, Business Week's Investment Outlook 2008
Buy some of the most beaten-down stocks, including those of giant financial institutions such as Lehman Brothers, Bear Stearns, and Merrill Lynch.
As of January 1, none of these firms will still exist.

Sarah Ketterer, CEO of Causeway Capital Management, Fortune Investors Guide 2008
"Fannie Mae and Freddie Mac have been pummeled. Our stress-test analysis indicates those stocks are at bargain basement prices."
Fannie and Freddie had lost 90 percent of their value.

James J. Cramer, "Future of Business" New York Magazine
"Goldman Sachs ... finishes the year at $300 a share. Not a prediction -- an inevitability."

Goldman Sachs' share price was $78, and the firm announced its first quarterly loss -- $2.2 billion.

Looking up
Fareed Zakaria analyzes our recovery:

A McKinsey & Co. study of crises in recent decades found that the United States is mirroring the pattern of countries with the strongest recoveries. It noted that "Debt in the financial sector relative to GDP has fallen back to levels last seen in 2000, before the credit bubble. US households have reduced their debt relative to disposable income by 15 percentage points, more than in any other country; at this rate, they could reach sustainable debt levels in two years or so."

Kenneth Rogoff and Carmen Reinhart, the leading experts on financial crises, argue that the United States is performing better than most countries in similar circumstances. U.S. consumer confidence is at its highest levels since September 2007.

The Bureau of Labor Statistics highlights manufacturing wages (link opens PDF) across the industrialized world:


Still got it
The blog Calculated Risk shows real (inflation-adjusted) consumer spending on the rise:


From MS-DOS to this
CNNMoney discusses tomorrow's computer:

IBM researchers are developing technology to analyze odors in people's breath that identify ailments, including liver and kidney disorders, asthma, diabetes and epilepsy. By determining which odors and molecules in a person's breath are associated with each disease, computers of the future will be able to make an instant analysis for problems that today could be misdiagnosed or go undetected by a doctor.

Getting off track
Chamath Palihapitiya, a former Facebook executive, talks about how companies lose it:

Enjoy your weekend.


The article 8 Fascinating Reads originally appeared on Fool.com.

Fool contributor Morgan Housel has no positions in the stocks mentioned above. The Motley Fool owns shares of Facebook and International Business Machines and has the following options: long JAN 2014 $20.00 calls on Facebook. Motley Fool newsletter services recommend Facebook and International Business Machines. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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