Ants have algorithms (Via Iain Couzin in Edge 240)

Vapourware: The tech that never was – Crave at CNET.co.uk

CNet has published an incredibly detailed look at the most critical examples of vaporware ever seen in the tech sector. ... this decades-long retrospective look at the most promising of all technologies that never saw the light of day

Bears get rich and Bulls get rich, but pigs always get slaughtered

Via Felix Salmon: The Bear Facts – Portfolio.com

Quote: Hope is not a plan

Anagrams for Bear Stearns……is Barren Asset, Rent Bare Ass, Stab Earners, Bears AsternBear Stearns = BS = Bull $hit

Via Finance Blog – Felix Salmon – Market Movers – Portfolio.com

We still don’t understand (i.e. the media haven’t informed us) how exactly they came unstuck. It’s not like they take deposits, right?

They don’t take retail deposits from individuals: there’s no such thing as a Bear Stearns checking account, as far as I know. But that doesn’t mean they can’t suffer from a bank run. Except in this case it wasn’t individuals withdrawing money, but hedge funds and other banks.

Bear had a large balance sheet, full of highly-rated bonds. If it ever needed cash, it could go to the repo markets and essentially borrow money against its own balance sheet: it would sell the bonds to a counterparty, and promise to buy them back at a slightly higher price the following day or the following week.

But then, last week, the repo window slammed shut for Bear. Other banks would no longer accept Bear Stearns as a counterparty, which meant that Bear couldn’t use its balance sheet to raise cash.

Then, to make matters worse, the hedge funds all started deserting Bear as well. Bear has a large prime brokerage operation: it looks after hedge funds’ assets, basically, and will lend them money against those assets as needed. But the hedge funds, worried that Bear didn’t have the money to lend, started moving their assets elsewhere, and Bear’s highly profitable prime-brokerage franchise started spiralling downwards.

Without the trust of other banks or hedge funds, Bear was toast. And the famously sharp-elbowed Bear was never much loved on Wall Street to begin with. Maybe it’s true that the rest of the Street was simply waiting for an opportunity to get back at Bear for real and imagined slights, including the refusal to play ball in 1998. But I don’t think the Fed was bearing any grudges; its job was simply to mop up in the aftermath.