Popular business social networking site LinkedIn saw a 120% rise in revenue in the first report it has released as a publicly traded company. Despite this its shares have fallen in value from $100 a share at launch to about $95 now. Analysts still think that that there is a potential social networking bubble in the stock markets. Read more about why, despite this success, LinkedIn still won’t be making a profit over here.

Source: BBC News

It has become popular since the financial crisis to criticize the big 3 credit rating agencies out there: Standard & Poor’s, Moody’s, and Fitch. Yet, no one seems to be doing anything to change the reliance that investors have on them. If they’re really so bad, why do we even keep them around? In an article on Slate, that very question is asked. These three credit rating agencies have become so important since federal regulations on investments often require funds to only purchase bonds and securities above a certain rating to limit their risk. There is now a movement to get rid of all references to these ratings in the regulations. However, many oppose this by pointing out that while these agencies have made mistakes, they at least provide some measure of a bond’s risk. If the agencies were gone, how would investors know whether a bond was any good or not? Everyone would essentially have to do their own research. This seems to be an issue with little consensus, as there seems to be good reasons for both relying on the agencies and ignoring them. In the end, it appears that investors will continue to rely on them as they seem to be the best option in providing a necessary service.

Source: Slate

As the article states, ranking presidents purely by GDP is unfair for many reasons. The president, after all, has limited control over both the economy as a whole and over the government’s policy toward the economy. In addition, every president does much more than simply make decisions on economic policy. Nonetheless, looking at the rankings is rather interesting. These rankings cover all presidents who have entered office after WWII. As you can see, Presidents Kennedy (5.4%) and Johnson (5%) are numbers 1 and 2 on the list, respectively, while Presidents Obama (1.2%) and George W. Bush (1.6%) have posted the lowest GDP growth numbers.

Source: Economix Blog

In this article, the increased safety risk to drivers due to heavier vehicles is assessed. They found that the average weight of vehicles has increased by about 1,000 lbs. since 1980; this increase can largely be attributed to the popularity enjoyed by SUVs. It was found that this extra weight increased the risk of fatality from a car crash by 47%.

Source: Freakonomics Blog

David Cay Johnston at Reuters recently took a look at the economics behind state lotteries in the United States. Some of the findings include:

• Lotteries pay out about 62% of their revenue in winnings. That means lottery tickets are taxed at a rate of 38%.
• Americans spent $50.4 billion on lottery tickets in 2009
• Lottery winnings are taxed…further increasing the tax burden placed upon lottery tickets
• In 11 states the lottery provides more revenue than the state’s income tax

You can read more over here.

Source: Reuters

Via: Gerry Canavan

The latest US census has shown a dramatic drop in the percentage of children who make up the population of the United States. At the same time the percentage of senior citizens in the population has risen dramatically. While there might be a percentage decrease, in the United States as a whole there has been a 1.9 million increase in the number of children. But the number of old people are rising even faster. And in certain states such as Vermont, the absolute number of children has actually fallen. Read more about the consequences that this could have over here.

Source: Time

Foreign Policy featured an article that took a look at “how food explains the world.” Some of the interesting points include:

• China keeps a strategic pork reserve in case there’s ever a shortage.
• Investor Anthony Ward is sometimes called “Willy Wonka” because he controls 7% of the world’s production of cocoa beans. He believes that continued problems in Africa will drive up the price of the key ingredient behind chocolate.
• Israel and Lebanon are locked in a battle that has raged for several years with no end in sight. The battle is for the record for the biggest batch of hummus.
• In South Korea the prime minister was forced to intervene as a threatening financial crisis loomed. Did the government have to bail out the banks? The insurance companies? The auto manufacturers? Nope, in South Korea the government had to bail out the cabbage industry. A dish made with those cabbages is so important that the South Korean space agency thought it was worth their time to launch it into space.

Click here to read more about the role that mobile phones play in the distribution of food aid, the newest diet recommended by the U.N.’s Food and Agriculture Organization, and the (alleged) role that KFC played in the Egyptian uprisings.

Source: Foreign Policy

Via: World’s Strangest

Renny McPherson was part of a team that analysed Al Qaeda documents to understand the financial underpinnings of the shadowy terror network. In an article posted in Boston, he wrote about some of his findings:

• Al Qaeda is run as a “well-organized franchise structure” where existing local terror groups from around the world take on the Al Qaeda name (with Al Qaeda’s permission), and are given the flexibility to adapt Al Qaeda’s goals to local conditions. Unlike a traditional franchise though, there were no payment transfers between the ‘parent’ organization and its subsidiary.
• Al Qaeda in Iraq was not reliant on international donors. In fact, its local fund raising infrastructure was so strong that they were able to send funds to other terrorist organizations.
• Launching a terrorist attack has several costs associated with it including: salaries, safe houses, transportation, weapons, and even life insurance for those who would be carrying out the attack.

There are several other fascinating points of information from a man who has had a long career studying this issue. Read more over here.

Source: Boston

Via: Marginal Revolution

This is an interesting chart that tracks the average college GPA by year. It also gives a breakdown of the differences between the average GPA at private and public colleges. The average GPA, as you can see, is much higher at private colleges than at public ones. So, why have GPAs been rising, and why does it seem easier to earn an A at a private college than at a public one?

Source: FlowingData

Via: Freakonomics Blog

Borders recently announced that it would be shutting down as no potential buyers were willing to take over the company and keep the bookselling chain afloat. So what caused one of the largest booksellers to close? An article on Slate gave a good summary of the major causes. It cited four major problems:

1. It did not adapt well to the internet or properly adopt it into its business strategy.

2. Borders did not cash in on e-books, which have become increasingly popular.

3. Borders lacked diversification – sales of books declined as DVD and CD sales declined, which also made up a large portion of Borders sales. Barnes & Noble diversified by bringing Starbucks to its stores, while Borders eventually brought in Seattle’s Best.

4. Borders opened too many stores, many of which were unprofitable. Many of these stores were too large leading to high overhead costs and they also locked themselves into many long-term leases making it impossible for them to shut-down specific, unprofitable locations.

Will Barnes & Noble be next, or will they be able to compete against Amazon in the future? Only time will tell.

Source: Slate