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What We’re Reading

Selectivity:

“I brought [Michael Jordan] a deal three years ago for $100 million,” Falk said. “And all he had to do was, other than giving his name and likeness, make one two-hour appearance to announce the deal and he turned it down. And God bless him. He’s been so successful, it gives him an opportunity to do whatever the hell he wants or not to do things he doesn’t want. And I really admire that. He’s very, very selective in the things that he wants to be involved in.”

Moving:

Three percent of U.S. adults have moved either temporarily or permanently and six percent say that someone has moved into their home because of Covid-19, according to new Pew Research Center data. In total, more than one in five adults either moved themselves, had someone move into their home, or knew someone who did due to the virus.

Hotel occupancy:

HotelJuly162020.png

Real estate:

You can borrow at two-and-change percent to buy a house as you flee the city for the suburbs, now that your current or future job probably doesn’t care where you do it from. RIP Manhattan apartment prices. Basically money is free and you can buy a McMansion on the internet right now. Almost nothing down, almost zero cost, if your credit isn’t bad.

Houses for between one and two million dollars in my town are being snapped up over the phone on the day they list. Bidding wars are common and in some cases the buyers haven’t even visited the property.

General Electric:

GE’s established divisions were expected to meet earnings goals far removed from reality. “Under Immelt, the company believed that the will to hit a target could supersede the math,” Gryta and Mann report.

It was a recipe for a disaster. Up-and-coming middle managers knew that a missed goal could stymie their climb up GE’s ladder; division heads “didn’t necessarily know how his underlings got to the finish line and it didn’t really matter,” the authors write.

Those toxic incentives drove the debacle that Flannery uncovered at GE Power. The division made its money not on the generators and turbines it built, but on the service contracts it sold to maintain the machines.

All a manager had to do was tweak the future cost estimates on those decades-long contracts to jack up profits as needed — and to paper over real losses from unsold inventory and declining demand.

Post-Covid Office:

“You should never be thinking about full time or zero time,” said Nicholas Bloom, an economics professor at Stanford whose research has identified causal links between remote work and employee performance. “I’m a firm believer in post-Covid half time in the office.”

Have a good weekend, stay safe.


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