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Weekend Briefing No. 237
Welcome to the Weekend.
3,453 – At the close of trading on Wednesday, Wall Street set the record for the longest Bull Market in history – 3,453 days in a row.
6 – A study shows that legalization of weed in Colorado led to a 6% increase in house prices.
Corporate profits are booming, but average wages haven’t budged over the past year. The U.S. economy has run this way for decades, partly because of a fundamental change in business practices dating back to the 1980s. American corporations exist only because the American people grant them charters. Those charters confer valuable privileges—such as limited legal liability for their owners—that enable businesses to turn a profit. What do Americans get in return? Last week Elizabeth Warren introduced legislation to fix it - the Accountable Capitalism Act – which requires all corporations with more than $1 billion in revenue to become federally chartered and adopt a new model of corporate governance. The charter tells company directors to consider the interests of all relevant stakeholders — shareholders, but also customers, employees, and the communities in which the company operates — when making decisions. CEO’s who want to do right for their stakeholders frequently fall back on the idea that their first obligation is to do what’s right for shareholders. Warren’s new charter would remove that crutch, and leave executives accountable as human beings for the rights and wrongs of their own decisions. This concept is based on the benefit corporation model already in use in 34 states. I think this will be an interesting top down approach to encouraging business to do good. But if you’re a startup you can build your company from the ground up with these values in the benefit corporation. Feel free to shoot me an email if you want some help on that. Forbes (5 minutes)
The World Bank has priced the world’s first public bond created and managed using only blockchain in a A$100 million ($73.16 million) deal designed to test how the technology might improve decades-old bond sales practices. Commonwealth Bank of Australia, the sole manager of the deal, said in a statement that the two-year bonds had priced to yield 2.251 percent and would settle Aug. 28. The prototype deal, dubbed a “Bondi” bond - standing for Blockchain Operated New Debt Instrument as well as a reference to Australia’s most famous beach - is being viewed as an initial step in moving bond sales away from manual processes towards faster and cheaper automation. Reuters (5 minutes)
Africa, Ownership & Blockchain
The themes for SOCAP, the premier impact investing conference, this year were just announced. Some that caught my attention are: 1) Africa. A robust discussion of the gaps and opportunities in social capital markets across the continent. 2) Alternative Ownership Models. Exploring how investors and entrepreneurs can think about implementing alternative ownership structures: multi-stakeholder, multi-generational, non-permanent. 3) Blockchain for Impact. Experts exploring the world-changing potential of blockchain will explain and share insights around opportunities for financial inclusion, supply chain transparency, human rights, digital identity for vulnerable populations, and more. SOCAP (Sponsored)
Hacking the Market
Over a period of at least five years, three US newswires were hacked. Stock traders who were active on US stock exchanges drew up shopping lists of company press releases and told the hackers when to expect them to hit the newswires. The hackers would then upload the stolen press releases to foreign servers for the traders to access in exchange for 40 percent of their profits, paid to various offshore bank accounts. The case exemplifies the way insider trading has been quietly revolutionized by the internet. Traders no longer need someone inside a company to obtain inside information. Instead, they can turn to hackers, who can take their pick of security weaknesses: a large corporation or bank may have good in-house security, but the entities it works with — such as financial institutions, law firms, brokerages, smaller investment advisories, or, in this case, newswires — might not. The Verge (7 minutes)
The New York Public Library partnered with the design firm Mother in New York to create and upload a digital version of Lewis Carroll’s Alice’s Adventure in Wonderland to its Instagram story, and there’s more to come. Over the next few months, the NYPL will also upload Charlotte Perkins Gilman’s classic short story “The Yellow Wallpaper.” It’s a clever use of technology, bringing literature to a digital platform that 400 million people are looking at every day. While, yes, it’s nice to see Instagram Stories of cute puppy pics or vacation sunsets, why not demand more from your social media platform? Why not turn it into a tool for greater public access to literature? Fast Company (4 minutes)
A flute player breaks into a British museum and makes off with a million dollars worth of dead birds. He was only 20 when he stole the birds, 299 of them. And not just any dead birds, they were from one of the most important collections in scientific history. And also, their feathers would fetch about a million dollars if he took them apart and sold them to salmon fly tyers-- which he did, some of them. And he was caught. The police arrested him. And yet, somehow, he was now walking around free auditioning for orchestras in Europe. And a huge number of the birds were still unaccounted for. How did a 20-year-old flutist with no particular experience in museum larceny make off with some of the most precious specimens in the world? And where are the missing birds? This episode of This American Life is one of the most bizarre and surprisingly interesting podcasts I’ve ever heard. I’d love to hear your thoughts on the #featherunderground. This American Life (60 minutes)
Marshmallows & Success
You’ve probably heard of the marshmallow experiment. The researcher offered a deal to a child. If the child did not eat the marshmallow while he left the room, then they would be rewarded with a second marshmallow. So, the choice was simple: one treat right now or two treats later. The children who were willing to delay gratification and waited to receive the second marshmallow ended up having higher SAT scores, lower levels of substance abuse, lower likelihood of obesity, better responses to stress, better social skills as reported by their parents, and generally better scores in a range of other life measures. The researchers followed each child for more than 40 years and over and over again, the group who waited patiently for the second marshmallow succeed in whatever capacity they were measuring. In other words, this series of experiments proved that the ability to delay gratification was critical for success in life. James Clear (8 minutes)
From the Community
Global microfinance pioneer FINCA International has announced the launch of FINCA Ventures, an impact investing platform that provides patient capital to help early-stage social enterprises in energy, WASH, education, health, agriculture and fintech, with a geographic focus on sub-Saharan Africa.
The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design. - Friedrich August von Hayek
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