This year’s summer solstice is a momentous one for Greenland, the huge and sparsely-populated Arctic island that has been run by Denmark since the 18th century. (…) The Danish Queen will attend a ceremony at the parliament in Nuuk, the Greenlandic capital, on Sunday June 21st, where she will observe the beginning of self-governance in the territory.

{ The Economist | Continue reading }

So, Greenland is officially self-governing. this is a process that’s being driven by the hopes of oil wealth that will allow Greenland economic, and eventually political, independence from its colonizer, Denmark.

But how much is the oil wealth, really? No one knows, and not a drop of oil has been found yet. Greenland’s government, using US Geological Survey data among others, says that the mean estimates for its oil reserves is about 50 billion barrels. That number is a bit abstract, so I did some math: The island has about 56,000 people, and if things go as they appear to be going, it will be an independent country some time in the next couple of decades. That means each Greenlander will own about 900,000 barrels of oil.

Compare that to some other oil powers. These are the top three countries in terms of oil reserves per capita:

Kuwait: 39,900 barrels per person
UAE: 37,576 barrels per person
Qatar: 18,071 barrels per person

Yes, Greenland could have 50 times more oil per capita than Kuwait.

{ True Slant | Continue reading }

Greenland is, by area, the world’s largest island that is not a continent in its own right, as well as the least densely populated country in the world. However, since the 1950s, scientists have hypothesized that the ice cap covering the country may actually conceal three separate island land masses that have been bridged by glacier.

{ Wikipedia | Continue reading }

July 2007: Online DVD rental outfit Netflix caused a real buzz last October when it announced the competition. If anyone can come up with a recommender system for predicting customer DVD preferences that beats its own algorithm (Cinematch) by a certain amount, Netflix will hand over $1million. The prize got a lot of attention because it exemplifies the idea of crowdsourcing. Not only does Netflix rely on crowdsourcing of DVD ratings (user ratings of DVD titles) but the competition itself is an attempt to use crowdsourcing to develop the algorithms to make the most of those ratings. Instead of doing the work itself, or hiring specialists, Netflix lets whoever anyone enter their competition and pays the winner.

{ Whimsley | Continue reading }

June 26, 2009: Today our team submitted our solution to the Netflix Prize, resulting in a score of .8558, which corresponds to an improvement over Netflix Cinematch algorithm of 10.05%.  This is the first submission in the competition to break the 10% barrier and sets off a 30 day period where all competitors are invited to submit their best and final solutions.

{ BellKor’s Pragmatic Chaos }

After nearly three years and entries from more than 50,000 contestants, a multinational team says that it has met the requirements to win the million-dollar Netflix Prize.

The online movie rental service uses its Cinematch software to analyze each customer’s film-viewing habits and recommends other movies that customer might enjoy. Because accurate recommendations increase Netflix’s appeal to its customers, the movie rental company started a contest in October 2006, offering $1 million to the first contestant that could improve the predictions by at least 10 percent.

{ NY Times | Continue reading }

The worldwide recession may be nearing bottom or lifting, some data suggests. The rate of job losses has slowed. Financial and credit markets have eased. Ambitious stimulus plans seem to be working.

But these metrics hardly provide a qualitative understanding of what the world faces in the short to medium term — the next six to 24 months. What does the end of the recession really look like? And how will we know when we get there?

Foreign Policy surveyed the latest thinking and contacted top economic experts to get a better picture of the shape of things to come. (…) Their consensus? The end of the recession looks much like the recession itself. We are at the end of the beginning of bad times.

{ Foreign Policy | Continue reading }

{ A Picasso musketeer from 1969 fetched $11.5 million at Sotheby’s last Wednesday. }

People will tell you that starting a business is all about taking that first step—that it’s all about sitting down and hashing out the Big Idea. You know what? That’s a load of crap. Sure, the first step is important, but it’s the next 16,000 steps that actually make things happen. The idea is the easy part; turning the idea into a business takes work. Before I sat down to write this, I made myself a sandwich. Even that took five steps.

{ Joseph Ippolito/Good | Continue reading }

The amount of money raised this year is looking like it will be well below half of last year and maybe as low as a third. My guess is that venture capital will do a little better than buyouts, frankly, on a percent basis because I think people are really scared about buyouts. So my guess is that maybe if the buyout industry is down a third, the venture industry will be down a half. This is a tough year to forecast, but it is certainly the way it feels now.

{ Clinton Harris Interview | Red Herring | Continue reading }

photo { Dash Snow }

Major US, Canadian and British life and health insurance companies have billions of dollars invested in tobacco companies, a study published in the New England Journal of Medicine said. (…)

At least $US4.4 billion ($5.5 billion) in insurance company funds are invested in companies whose affiliates produce cigarettes, cigars and chewing tobacco. (…)

Researchers first revealed that health and life insurance companies had major investments in tobacco companies in 1995 in an article in the British medical journal Lancet.

{ AFP/News | Continue reading }

Congress struck the government’s strongest anti-smoking blow in decades Thursday with a Senate vote to give regulators new power to limit nicotine in cigarettes, drastically curtail ads and ban candied tobacco products aimed at young people.

The legislation, one of the most dramatic anti-smoking initiatives since the U.S. surgeon general’s warning 45 years ago that tobacco causes lung cancer, would give the Food and Drug Administration authority to regulate the content, marketing and advertising of cigarettes and other tobacco products.

{ AP/Yahoo | Continue reading }

“Behind every great fortune lies a great crime.” –Balzac

Balzac was on to something 200 years ago, but to be fair to modern day multi-millionaires, the only real way to accumulate wealth prior to the 18th century was to steal it, or tax it, I suppose, as was the case with kings and their royal courts. It was only with the advent of capitalism and annual productivity gains that entrepreneurs, investors, and risk-takers with luck or pinpoint-timing could jump to the head of the pack and accumulate what came to be recognized as a fortune. Still, the negative connotations persist. I remember a cocktail party in the early 80s where a somewhat inebriated guest engaged me in a debate about the merits of capitalism. “You’re filthy rich,” he said, which struck me as most unfair from a number of angles. First of all, he hadn’t seen anything yet, I thought, and second, I wasn’t quite sure where the “filthy” came from. Resentment that he’d missed out on my presumed good deal, I suppose, and in the process using a hackneyed phrase that was bitter and biting, yet had some context of historical sociological relativity. Still, he might have been on to something there - not about me, hopefully, because I’ve always felt that while PIMCO has prospered, it’s only because its clients have benefitted even more so - but about the developing sense of one-sided, perhaps off-sided wealth generation that was to dominate the next several decades. Granted, we had Bill Gates and Steve Jobs and other true capitalistic dynamos who benefitted society immeasurably. But growing percentages of fortunes were being made by those who could borrow or aggregate other people’s money. Because our economy was still in a relatively early stage of leveraging, those who borrowed money and used it to invest in higher-risk yet higher-return financial or real assets didn’t require a lot of skill, they just needed to be able to convince a bank or an insurance company to lend them some money. After that, the secular wave of leverage would be enough to multiply their meager equity many times over and carry them to a beach where a fortune awaited them much like a pirate’s buried treasure.

I remember as a child my parents telling me, perhaps resentfully, that only a doctor, airline pilot, or a car dealer could afford to join a country club. My how things have changed. Now, as I write this overlooking the 16th hole on the Vintage Club near Palm Springs, the only golfers who shank seven irons into the lake are real estate developers, investment bankers, or heads of investment management companies. The rich are different, not only in the manner intoned by F. Scott Fitzgerald, but also in who they are and what they do for a living. Whether some or all of them are filthy is a judgment for society and history to make. Of one thing you can be sure however: over the next several decades, the ability to make a fortune by using other people’s money will be a lot harder. Deleveraging, reregulation, increased taxation, and compensation limits will allow only the most skillful - or the shadiest - into the Balzac or Forbes 400.

Readers who are interested in such things as the Forbes annual list of hoity-toities will have noticed that more and more of them are global, not U.S. citizens. The U.S., in other words, is not producing as much wealth in proportion to the rest of the world. Its fortune-producing capabilities seem to be declining, which might suggest that its relative standard of living is doing so as well.

{ Bill Gross | Continue reading | PDF }

{ First edition of Ulysses sells for record $420,000. Well-preserved copy of James Joyce’s 1922 classic had been unread, except for the racy bits. }

The next time you purchase a monthly Metrocard, which is slated to increase to $89 at the end of June, think about this: Almost one-third of the money you spend — about $29 — will go to service the Metropolitan Transportation Authority’s massive $26.8 billion debt.

This simple fact indicates why the Metropolitan Transportation Authority (MTA) is in perpetual crisis. The MTA will spend nearly $1.5 billion to service debt in 2009, and it projects debt servicing will swallow up an average of more than $2 billion a year from 2010 to 2012. (…)

The MTA breaks down expenditures into operating and capital. The capital budget pays for expanding and building subway lines and stations, purchasing new subway cars and buses, maintaining signals and communications and related activities. The operating budget includes salaries, health and pension benefits, fuel and electricity and cleaning trains and stations.

John Petro, urban policy analyst at the Drum Major Institute for Public Policy, wrote in a recent report that while New York City and State funded 30 percent of the MTA’s capital budget in the mid-1980s, by 2004 that support had declined to just 3 percent.

Petro argues that for more than 20 years, “the city and state abdicated responsibility to fund capital programs, forcing the MTA to borrow huge sums to maintain mass transit service. … as huge debt payments eat up larger portions of the authority’s operating budget, the MTA is facing ever-larger budget deficits.”

{ The Indypendant | Continue reading }

Is it possible that higher education might be the next bubble to burst? Some early warnings suggest that it could be.

With tuitions, fees, and room and board at dozens of colleges now reaching $50,000 a year, the ability to sustain private higher education for all but the very well-heeled is questionable. According to the National Center for Public Policy and Higher Education, over the past 25 years, average college tuition and fees have risen by 440 percent — more than four times the rate of inflation and almost twice the rate of medical care. Patrick M. Callan, the center’s president, has warned that low-income students will find college unaffordable. (…)

Consumers who have questioned whether it is worth spending $1,000 a square foot for a home are now asking whether it is worth spending $1,000 a week to send their kids to college. There is a growing sense among the public that higher education might be overpriced and under-delivering.

{ The Chronicle of Higher Education | Continue reading }

illustration { Vanessa Prager }

If there really are green shoots coming up, one of the early places they should be seen is in the American Trucking Association (ATA) Tonnage Index. If retail sales are going to tick up, if invetories are going to be restocked, it has to be physically delivered.

Only not so much. The ATA Tonnage Index declined a seasonally adjusted 2.2% in April. This is better than the 4.5% contraction in March, but still negative.

{ Barry Ritholtz | Continue reading }

A former Bristol-Myers Squibb Co. executive was sentenced to write a book for giving false information to U.S. regulators about a botched 2006 agreement to delay generic competition for the blood thinner Plavix.

Andrew Bodnar, a former senior executive vice president at Bristol-Myers, was given two years’ probation by U.S. District Judge Ricardo Urbina in Washington and ordered to pay a $5,000 fine. As part of his probation, Bodnar must write the story about how he came to be convicted of the misdemeanor.

{ Bloomberg | Continue reading }