Enron's seeds in Houston, big Texas nation, and urban vs. suburban social livesA few minor items of interest tonight. The first is a Wall Street Journal article (nonsubscriber copy) on a new life for former Enron traders among various hedge funds and commodities trading groups. The interesting part is that they seem to be forming in Houston, obviously because many of them started here, but also, evidently, because many of the traders evidently liked it here and long to return.
It would be a big win for Houston if these seeds developed into a robust financial industry cluster here, something I discussed earlier in this blog. Many top world cities are built at least in part around a financial industry cluster (London, Tokyo, NYC, Chicago commodities), so it would be a great one for Houston to cultivate.
Five years after the Texas energy-trading giant collapsed, the traders behind some of Enron Corp.'s brashest efforts to carve out new markets are pushing further into those frontiers.
Enron alumni have joined hedge funds and trading operations capitalizing on fast-growing commodity markets that the company once dominated or helped develop, from its stronghold of natural-gas and power trading to experimental futures markets in pollution-emission credits and weather contracts. A few Enron refugees have even joined industrial or consumer-goods firms, where they negotiate contracts to reduce the risks of volatile energy, food and raw-materials prices.
The growth of commodity markets popularized by Enron, and the ability of its veterans to raise money in budding areas, is to some a validation of at least part of the company's model: trading commodities of all kinds.
Citigroup snapped up Stuart Staley, a successful coal trader at Enron. Mr. Staley, 40 years old, now runs the gas- and power-trading operations of Citigroup from Houston, where traders he sought to hire already resided or wanted to return. Lehman Brothers Holdings Inc. and Bear Stearns Cos. are building energy-trading operations in Houston, among other cities, with former Enron traders.
The next item is a random excerpt from an investing newsletter I read, with a fascinating set of comparative stats.
He makes a solid case in the speech for needing to incorporate more global data into the Fed models, as the global economy is influencing the US economy to an ever greater degree.I would not have guessed we would have a larger economy than those countries with only 22 million or so people here. Finally, and excerpt from a recent report on urban vs. suburban social lives.
What if Texas issued its own currency and had its own central bank? Texas as a nation would not be a small player. In dollar terms, it is larger than Korea or Brazil or Mexico and 25% larger than India. But even given that, a Texas central bank could not discern proper and prudent monetary policy by just looking at Texas data. They would clearly have to take into account the data from the US and the rest of the world in order to maintain price stability and full employment.
All very reasonable and thoughtful, and an explanation why the Dallas Fed is beefing up its economic staff in search or more and better data.
Quite counter-intuitive, eh?
A new study says that people who live in sprawling suburban areas have more friends, better community involvement and more frequent contact with their neighbours than urbanites who are wedged in side-by-side. The results challenge the accepted idea that suburban life is socially alienating a notion that's inspired everything from the Academy Award-winning American Beauty to Harvard professor Robert Putnam's book Bowling Alone.
The study, released by the University of California at Irvine, found that for every 10 per cent decrease in population density, the chances of people talking to their neighbours weekly increases by 10 per cent, and the likelihood they belong to hobby-based clubs jumps by 15 per cent.
"We found that interaction goes down as population density goes up. So, turning it around, it says that interaction is higher where densities are lower," says Jan Brueckner, an economics professor at UC Irvine who led the study. "What that means is suburban living promotes more interaction than living in the central city."
Have a great Thanksgiving. I may or may not be able to post Thursday night.