John At The Center

But even as the chains compete to come up with the best deal, some of the analysts who follow them are worried. They fear that, as was the case with merchandise retailers that sold luxury goods for 80 percent off, the restaurants are hurting their long-term prospects by training customers to eat out only when they are offered a bargain.

“The problem with that is once you start dealing, you’ve got to deal forever,” said Harry Balzer, the chief food industry analyst for the NPD Group, a consumer marketing research company.

via Discounts Force Restaurants to Eat Their Own Lunch – NYTimes.com.

Investors looking to snap up stakes in venture capital funds on the cheap in the secondary market may want to think twice after hearing one limited partner’s cautionary tale.

Like many LPs in the wake of the tech bust in 2001, AXA Private Equity snapped up interests in some of the more “acceptable” venture funds on the secondary market, according to Managing Director Vincent Gombault, who helps oversee the fund-of-funds group.

via One PE Firm’s Secondary Deal Not All It Was Cracked Up To Be – Venture Capital Dispatch – WSJ.

The U.S. stock market has switched to automatic from manual transmission, forcing investors to relearn how to drive.

Increasingly, investors and pundits are clutching at straws to explain big moves in the stock market. The difficulty in divining a fundamental explanation stems from a structural change in the U.S. stock market: The majority of stock trades now originate with fully automated “high frequency” funds, a phenomenon that has accelerated during the market turbulence of recent years because of the relative success of the strategy.

Major hedge funds have put other strategies on ice are now opening new funds devoted to high-frequency strategies and hiring the mathematicians and computer programmers that run them. Some of the fastest-growing market makers, such as Global Electronic Trading Company, or Getco, also use the automated strategies.

via Rise of the (Market) Machines – MarketBeat – WSJ.

1 1.07 128.57 Harvard University, Cambridge, Massachusetts (United States)

2 2.6 79.12 University of Chicago, Chicago, Illinois (United States)

3 3.2 295.64 University of London, London, United Kingdom

4 3.9 86.19 University of California-Berkeley, Berkeley, California (United States)

5 5.46 50.13 Princeton University, Princeton, New Jersey (United States)

6 6.72 76.58 New York University, New York City, New York (United States)

7 7.29 73.77 Stanford University, Palo Alto, California (United States)

via Rankings at IDEAS: Best top level institutions.

Mr. Gross, 65, has long been celebrated for his eccentricities. He learned some of his lucrative investing strategies by gambling in Las Vegas. Many of his most inspired ideas arrived while he was standing on his head doing yoga. He knows he has to be well dressed for client meetings or television — but instead of keeping his Hermès ties neatly knotted, he drapes them around his neck like scarves so he can labor with his collar open.

via Bill Gross of Pimco Is on Treasury’s Speed Dial – NYTimes.com.

There are benefits to CMOs:

Hence, securitised mortgage debt is an important aspect of financial globalisation that makes people’s consumption considerably more resilient to the ups and downs of the business cycle. One possible reason why securitising mortgage debt has such a strong effect on international risk sharing may be that markets for residential mortgages used to be some of the most internationally segmented parts of the financial system. Once banks were allowed to repackage and sell parts of their mortgage portfolio (often to foreign investors), they were able to continue to provide credit to consumers even in downturns, thus effectively providing consumption risk sharing to private households.

via The macroeconomic benefits of mortgage-backed securities | vox – Research-based policy analysis and commentary from leading economists.

The things aren’t mentioned are Fed’s other options to tightening without removing support for the credit markets and also the Fed’s longstanding reputation on fighting inflation.  This should temper inflation expectations.

In abnormal times like these, however, providing frightened banks with the reserves they demand will fuel neither money nor credit growth — and is therefore not inflationary.

Rather, it’s more like a grand version of what the Fed does every Christmas season. The Fed always puts more currency into circulation during this prime shopping period because people demand it, and then withdraws the “excess” currency in January.

True inflation hawks worry about that last step. (Did someone say, “Bah, humbug”?) Will the Fed really withdraw all those reserves fast enough as the financial storm abates? If not, we could indeed experience inflation. Although the Fed is not infallible, I’d make three important points:

via Economic View – Cross Inflation Off the Long List of Worries – NYTimes.com.

Attorneys general from Connecticut, Kentucky, Missouri, Nebraska, Maryland, Vermont, Minnesota, North Dakota, Ohio and West Virginia objected to the sale, saying it would circumvent state laws that protect GM dealers’ contracts and consumers with product liability claims.

via GM’s Sale Opposed by 10 States, Union Retirees and Chrysler – Bloomberg.com.

. This discount possesses ‘q’ ratios that are less than 1.0. Conversely, when ‘q’ exceeds 1.0, the market trades at a premium to its replacement cost. The run-up from 1996-2000 had ‘q’ approaching the unthinkable value of 2.0. Encouragingly, the most recent (QI 09) level of 0.64 is the lowest since QII 91 – quite discounted. The long-term average (since 1952) for Tobin’s ‘q’ is 0.75.

via CHART OF THE DAY: TOBIN’S Q | THE PRAGMATIC CAPITALIST.

when we saw the big increase in ‘household’ debt in past years, we were partly picking up an increase in hedge fund leverage

via Tracking Hedge Funds (Where’s Waldo?) – BusinessWeek.