July 24 (Bloomberg) -- It’s getting close to that time of year when you parents of college-bound kids get started on shopping for the mini-fridge and other dorm-room necessities, or drafting the instructions again on how to do laundry.
Those of you with first-year students took the college tours a few months ago. After calculating the odds, hiring tutors for the SATs and the entrance-exam essays, and engineering the summer “enrichment” experiences that look good as extracurricular activities on a transcript, you succeeded in achieving your dream for the kid. Perhaps the kid’s also.
Your child is going to Harvard. Or Yale. Or, sadly, Penn.
Be careful what you wish for.
A former Yale English professor with bachelor’s degree, master’s degree and doctorate from Columbia has written a scalding indictment of the Ivy League and the mentality surrounding their role in higher education and society in the U.S.
Something happens to Ivy Leaguers, William Deresiewicz writes in the New Republic, something bad for them and bad for the rest of us. They go in among the best and brightest and come out “timid, and lost, with little intellectual curiosity and a stunted sense of purpose: trapped in a bubble of privilege, heading meekly in the same direction, great at what they’re doing but with no idea why they’re doing it.”
They’re cogs in the wheel, unsure of who they really are, certain only of what’s expected of them, for what they are predestined, but lacking a soul, he writes.
We’ll note separately that unless they got a free ride, they’re going to emerge into an absurd amount of debt that could lead them to financial ruin before their adult lives got much traction, as Kasia Klimasinska and Janet Lorin write today.
Of the cliché “Harvard is for leaders,” Deresiewicz writes that “what these institutions mean by leadership is nothing more than getting to the top. Making partner at a major law firm or becoming a chief executive, climbing the greasy pole of whatever hierarchy you decide to attach yourself to.”
In the process, the Ivies have become factories, mostly for your line of work.
“As of 2010, about a third of graduates went into financing or consulting at a number of top schools, including Harvard, Princeton, and Cornell. Whole fields have disappeared from view: the clergy, the military, electoral politics, even academia itself, for the most part, including basic science,” according to the article.
He quotes Bloomberg View’s Ezra Klein: “What Wall Street figured out is that colleges are producing a large number of very smart, completely confused graduates. Kids who have ample mental horsepower, an incredible work ethic and no idea what to do next.”
We used to visit a stepbrother at West Virginia University. Man, what a fun place that was.
Never let schooling interfere with your education.
Economic indicators begin today with initial jobless claims at 8:30 a.m. EDT, followed by Markit’s U.S. PMI and Bloomberg consumer comfort at 9:45 a.m., and new home sales at 10 a.m.
There are 74 U.S. companies reporting today, according to the corporate calendar at EVTS <GO>, too many to list more than the biggest names, which include Union Pacific, T. Rowe Price, KKR, General Motors, Ford, Eli Lilly, Bristol-Myers, Starbucks, Amazon.com, Visa and American Airlines.
Overnight, HSBC/Markit said China’s PMI rose to an 18-month high in July, and Japan said an unexpected decline in exports increased the trade deficit more than forecast.
A short time ago, Markit’s PMI for the euro area showed manufacturing and services returned to a three-year high in July.
- Sanctions that include blocking Russia’s access to capital markets and an arms embargo will be considered today by EU officials in Brussels. - Pro-Russian separatists had possession of missiles capable of downing MH17 and they could have been removed to Russia, a Ukrainian rebel leader tells Reuters. - Norway’s wealth fund is reassessing its holdings in Russia. - Arizona’s execution of a murderer took almost two hours while he gasped for breath. - Forty-eight are dead after a twin-engine turboprop crashed during an emergency landing on an island off Taiwan. Some survivors sought help from residents nearby. - The FAA ended its ban on flights to Tel Aviv. - The IMF updates its world economic outlook at 11 a.m. EDT. - Standard & Poor’s ratings on some CMBS may draw SEC enforcement action. - The trial has begun for Leopoldo Lopez, the Venezuelan opposition leader charged with inciting violence against the government. He’s been in custody since Feb. 18. - Venezuelan markets are closed for Simon Bolivar’s birthday. - Meriam Ibrahim, the Sudanese woman condemned for apostasy, is now in Rome. - Complaints of racial discrimination in Newark, New Jersey’s, school reorganization are being investigated by the U.S. - A 17-year-old attempting to pilot a single-engine aircraft around the globe has died after crashing in the Pacific, and the search is on for his father. - Senator John Walsh, the Montana Democrat, is accused of plagiarism in his master’s thesis, jeopardizing his re-election in midterm elections critical to Senate Democrats. - This is why we don’t write a lot about Israel-Palestinian conflict. - The UN Human Rights Council approved an investigation into abuses during Israel’s Gaza offensive, raising the specter of war crimes. The U.S. voted against it. - Gaza Muslims take refuge in Christian church. - Comic-Con International opens to the public in San Diego. - Dogs get jealous.
So the guy at Blaque Technology probably wasn’t being exactly honest.
We hate getting lied to. Whomever we spoke to at Blaque Technology, which is where the phone number for Cynk Technology took us a couple weeks ago, swore like a sailor that this was a wrong number, no connection, no nothing.
But when we read the rest of the story Zeke Faux and Dune Lawrence wrote for Bloomberg Businessweek today about trying to track down Cynk, including Faux’s field trip to its registered address in Belize, we weren’t surprised to find Blaque, whatever it or he is, had some connection to this scam.
Seriously, how is this all legal at all? If you can’t sell snake oil or Spanish Fly, why can you sell shares in Cynk or anything that’s clearly fraud?
“Why do these markets keep going?,” Faux and Lawrence write, anticipating the question. “Some legitimate small companies do use them to grow. But many investors are lured by the jackpot appeal of a stock they bought for a cent or two doubling or quadrupling in value overnight. And some think they can spot scams in the making and dart in and out at a profit.”
We’ve read about one of them, and he makes a return appearance in today’s fantastic scavenger hunt for the truth behind this year’s silly season story. Along the way it reveals that the question we asked, that the story asks, that the burned trader asked, is a fair one: This is legal?
The halt on Cynk lifts tonight at midnight. Good luck with it.
Asset-backed bonds are not just for automakers and heavy industry anymore. Can we interest you in a security backed by chicken wings?
The hot-wings-and-hot-pants restaurant chain Hooters of America is among a wave of new debut issuers in the asset-backed market, eager to tap into cheap financing and willing to pay a little more for it. It’s finding ready buyers chasing yield, Sarah Mulholland reports.
So far this year the amount of bonds linked to consumer and business borrowing has risen to about $110 billion from $89.5 billion a year ago, she reports, citing data from Wells Fargo. Analysts there recently raised their issuance forecast by $30 billion to $195 billion.
It’s still well below the peak of $282.7 billion in 2006, and the lack of supply is helping demand.
There have been more inventive ABS over the years, though.
It’s pretty bad when you’re the head of a $500 million high-speed trading firm and Bloomberg News has to call your mom to get anything in the way of a live quote for a profile of the company.
Maybe if high-speed trading weren’t so opaque they wouldn’t be getting so much scrutiny. Instead of talking to Paul Gurinas’s mother, Paul Gurinas himself or his partner at Chicago-based Jump Trading, Bill DiSomma, would willingly grant an interview to deflate the boogeyman factor and rising suspicions about the industry. Just decline to answer what you don’t want to answer, guys. Who’s giving you the P.R. advice?
Instead they’re closing the blinds, locking the doors, refusing all calls and e-mails, instructing employees not to talk to the reporters, canceling prearranged meetings, and we’re left with mom.
“He doesn’t like stories about him, and so wouldn’t want any of his friends to talk about him,” Nola Gurinas said in a phone interview for our story by Saijel Kishan and Matthew Leising.
Mrs. Gurinas, your son owns a $1.7 million home in Chicago, a ranch in Montana and a NATO microwave tower in Belgium. You think his friends aren’t talking about him already?
ESPN got a look at all the bids entered for the Los Angeles Clippers and reports that the $2 billion former Microsoft Chief Executive Steve Ballmer agreed to pay for the team is, unofficially, nuts.
Ballmer’s price equals 12.1 times the team’s estimated 2014 revenue, according to the bid book compiled by Bank of America, which conducted the sale. An unidentified banker quoted in the story said “no team in the history of sports” had sold for more that six times revenue.
The bank had put the value of the team at $1 billion to $1.3 billion, and the two highest bids after Ballmer’s were in that range, at $1.2 billion and $1.6 billion, ESPN says.
A BofA executive is quoted as testifying that “none of us even believed we’d get” $1.8 billion, let alone $2 billion. The bids were entered as an exhibit in a California court deciding whether team owner Donald Sterling’s wife Shelly had or has the right to sell the team without her husband’s cooperation.
If this sale falls through and the NBA is forced to sell the team itself, it’s unlikely to fetch the same price, interim CEO Dick Parsons said in court testimony, according to ESPN.
Donald Sterling, whom neurologists have deemed mentally incapacitated, said earlier this month he thought the team could have sold for $2.5 billion. So there you go.
To: Tim Finchem, PGA commissioner
From: Opening Line, Bloomberg News
Subject: PGA Championship skills competition
Just hearing from Mike Buteau about the long-drive contest that you’re resurrecting at the PGA this year. Wow, has it really been 30 years?
This is a great idea, but it needs help. Hear us out.
Tim, designing this event as one guy taking one cut at one ball is not going to sell advertising, unless it’s written into the comet tail graphics that TV puts on the ball now, having not learned its lesson from the NHL.
Remember that Tiger Woods ad, when he’s hitting balls with pinpoint accuracy through a pattern of windows in a building? Start with that. Or remember that ad when Tiger is just bouncing the ball on the blade of an iron? Try that, too. Or just hire Tiger to put on a show.
But golf-cart racing is a must. Figure out a modest track around the back nine at Valhalla -- get Nicklaus to come up with something, maybe with a water hazard -- and get some of the southern guys with the Nascar names to get their Dukes of Hazzard on -- Bubba Watson, Boo Weekley, some of those boys.
Just some ideas, Tim. Jazz this thing up enough and people will forget all about the PGA Championship tournament itself.
Which they do anyway.
Poland’s Rafal Majka won yesterday’s 17th stage of the Tour de France, emerging from a chase group to coast home alone in the final 2.4 kilometers, or 1.5 miles. It’s his second stage win of the race for the Tinkoff-Saxo team, which has won three stages this year, the third being Tuesday’s stage win by Michael Rogers.
Italy’s Vincenzo Nibali of the Astana team remains in the race leader’s yellow jersey and now holds a commanding lead of 5 minutes, 26 seconds over his closest competitor, Alejandro Valverde, the Spaniard on the Movistar team. All Nibali has to do pretty much is stay upright and unbroken and he’ll be sipping Champagne on the ride into Paris on Sunday.
Today’s 18th stage, however, is in the way and it’s no breeze. Running 145.5 kilometers from Pau to Hautacam, the mighty Col du Tourmalet arrives at about the halfway point, the first of two mountain climbs so steep that they’re labeled “hors categorie,” or beyond categorization, or off the charts.
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