What we’re reading (10/21)
“Google’s Exclusive Search Deals With Apple At Heart Of U.S. Lawsuit” (Wall Street Journal). “Inside Google, they called the scenario “Code Red,” so stark was the prospect of losing the search engine’s lucrative pipeline from Apple Inc.’s iPhone. Now that possibility is officially on the table. Google’s partnership with Apple is at the heart of the U.S. Department of Justice antitrust lawsuit claiming that the Alphabet Inc. unit misused its power in an anticompetitive manner, potentially threatening a major revenue stream for both tech giants.”
“When Start-Ups Go Into The Garage (Or Sometimes The Living Room)” (New York Times). “It is the folksiest of Silicon Valley origin stories: Tech start-up makes it big after a wide-eyed entrepreneur builds a prototype in his garage. But Colin Wessells could never have imagined that a pandemic would force him back into the garage just to keep his company going. Dr. Wessells, 34, is one of the founders and the chief executive of Natron Energy, a start-up building a new kind of battery. In March, when social distancing orders shuttered his company’s offices in Santa Clara, Calif., he and his engineers could no longer use the lab where they tested the batteries. So he packed as much of the equipment as he could into a sport utility vehicle, drove it home and recreated part of the lab in his garage.”
“Complacency Warning? ‘Election Premium’ In Currency Markets Collapses Much Like It Did In 2016” (MarketWatch). “Poll-watching currency traders are growing more relaxed about the prospect for market volatility in the aftermath of the Nov. 3 presidential election, according to the options market. Are they getting too relaxed? The ‘election premium,’ derived from measures of implied volatility via the FX options market, has largely collapsed as Democratic challenger Joe Biden holds a wide lead over President Donald Trump which is seen reducing the chances of a muddled or contested election outcome that could spark market turmoil, said Olivier Korber, a currency strategist at Société Générale, in a Tuesday note. But a similar collapse in the ‘election premium’ in the runup to the 2016 election…means traders could be getting ‘complacent,’ he warned.”
“Mortgage Demand From Homebuyers Falls For The Fourth Straight Week” (CNBC). “Homebuyer demand is incredibly strong compared with last year, but there appears to be a slight pullback this month. A drop in buyer demand caused total mortgage application volume to fall 0.6% last week compared with the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index.”
“Are Inventors Or Firms The Engines Of Innovation?” (Management Science). “In this study, we empirically assess the contributions of inventors and firms for innovation using a 37-year panel of U.S. patenting activity. We estimate that inventors’ human capital is 5–10 times more important than firm capabilities for explaining the variance in inventor output. We then examine matching between inventors and firms and find highly talented inventors are attracted to firms that (i) have weak firm-specific invention capabilities and (ii) employ other talented inventors. A theoretical model that incorporates worker preferences for inventive output rationalizes our empirical findings of negative assortative matching between inventors and firms and positive assortative matching among inventors.”
