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Weekly Cartoon (via Stingy Investor)
The Running Of The Stock Brokers!!!
Weekly Joke (Via Accounting Courses Online)
A mugger stops a guy on the street at gunpoint. “Give me all your money”, he says. The muggee is indignant. “You can’t do this,” he yells. “I’m an IRS agent. “In that case,” says the mugger, “give me all MYmoney.”
Must Reads For All Visitors
Matt Ridley: Humans: Why They Triumphed (Creativity, Evolution, & More) - via WSJ – How did one ape 45,000 years ago happen to turn into a planet dominator? The answer lies in an epochal collision of creativity. Human evolution presents a puzzle. Nothing seems to explain the sudden takeoff of the last 45,000 years—the conversion of just another rare predatory ape into a planet dominator with rapidly progressing technologies. Once “progress” started to produce new tools, different ways of life and burgeoning populations, it accelerated all over the world, culminating in agriculture, cities, literacy and all the rest. Yet all the ingredients of human success—tool making, big brains, culture, fire, even language—seem to have been in place half a million years before and nothing happened. Tools were made to the same monotonous design for hundreds of thousands of years and the ecological impact of people was minimal. Then suddenly—bang!—culture exploded, starting in Africa. Why then, why there?
The US & Europe: Economic Inequality, Rage, & A Potential Revolution - via Naked Capitalism – Unequal societies, in other words, will remain unhealthy societies – and also unhappy societies – no matter how wealthy they become. Their advocates – those who see no reason whatever to curb ever-widening income differentials – have a lot of explaining to do.
The Brain Why Athletes Are Geniuses – via Discover – The qualities that set a great athlete apart from the rest of us lie not just in the muscles and the lungs but also between the ears. That’s because athletes need to make complicated decisions in a flash. One of the most spectacular examples of the athletic brain operating at top speed came in 2001, when the Yankees were in an American League playoff game with the Oakland Athletics. Shortstop Derek Jeter managed to grab an errant throw coming in from right field and then gently tossed the ball to catcher Jorge Posada, who tagged the base runner at home plate. Jeter’s quick decision saved the game—and the series—for the Yankees. To make the play, Jeter had to master both conscious decisions, such as whether to intercept the throw, and unconscious ones. These are the kinds of unthinking thoughts he must make in every second of every game: how much weight to put on a foot, how fast to rotate his wrist as he releases a ball, and so on.
Video: Ted Talk – Craig Venter unveils “synthetic life” - Craig Venter and team make a historic announcement: they’ve created the first fully functioning, reproducing cell controlled by synthetic DNA. He explains how they did it and why the achievement marks the beginning of a new era for science.
The truth about global warming is right under our nose - via Intelligent Life – Inside the vessel a white cockatoo is about to expire. The participants in the scene needed quite a lot of kit (quite apart from the cockatoo) to demonstrate that animals require oxygen to survive. But if a modern-day Joseph Wright wanted to capture an experiment showing how the increasing level of carbon dioxide warms the planet, he could buy the equipment in his local high street. All he would need are two water bottles, two lamps, two thermometers, tissues, vinegar and bicarbonate of soda. You can do it in your own kitchen.
Cap and Trade Is a Gigantic Scam - via Naked Capitalism – cap and trade not only won’t reduce emissions, it may actually increase them: The problem is that the emissions just go someplace else. That’s what happened after Kyoto, and that’s what would happen again, if—as long as fossil fuels are the cheapest energy, they will be burned someplace. You know, the Europeans thought they actually reduced their emissions after Kyoto, but what happened was the products that had been made in their countries began to be made in other countries, which were burning the cheapest form of fossil fuel, so the total emissions actually increased
Dan Ariely: On Human habits – via Wired – Slashed work hours, a laid-off spouse, Bernie Madoff scampering off with the family funds — for one reason or another, the recession has forced most consumers to take a long, hard look at their budget and give their spending habits an overhaul.And so we’ve seen such changes as higher savings rates, an end to “sleep shopping” and hyper-preoccupation with getting more bang for one’s buck. This, of course, has made it that much harder for marketers, as the advertising methods that worked on last year’s shoppers are no longer good enough. And the million-dollar question: how long will current consumer behaviour last?
The Price of Clarity: Getting Rid of Nonsense, Fine Print, & PC Language - via Project Syndicate – “Through the contrivance and cunning of stock jobbers there hath been brought in such a complication of knavery and cozenage, such a mystery of iniquity, and such an unintelligible jargon of terms to involve it in, as were never known in any other age or country.” Jonathan Swift’s eighteenth-century barb resonates in today’s world of financial “intermediation”: now, as then, finance shrouds its “complication of knavery and cozenage” in “unintelligible jargon.” As US President Barack Obama explained in a speech in April: “Many practices were so opaque and complex that few within these companies – let alone those charged with oversight – were fully aware of the massive wagers being made.
Chimps prefer to copy others with prestige - via Discover – There is no action so stupid that you can’t persuade someone to do it by getting celebrity endorsement. Even the barmiest advice on everything from medical decisions to diets will have happy idiots queuing up to listen, if it comes from the mouth of someone who was once on TV. Such recommendations can be disastrous, but they can be beneficial if the people in question are wise and knowledgeable, from village elders to community leaders. This is all part of the same trend – the human penchant for apeing individuals with high status. And now, it seems that we aren’t the only species that does this. Chimpanzees have the same inclination for apeing those with prestige.
Should We Still Use Gdp Figures - via NYT – Whatever you may think progress looks like — a rebounding stock market, a new house, a good raise — the governments of the world have long held the view that only one statistic, the measure of gross domestic product, can really show whether things seem to be getting better or getting worse. G.D.P. is an index of a country’s entire economic output — a tally of, among many other things, manufacturers’ shipments, farmers’ harvests, retail sales and construction spending. It’s a figure that compresses the immensity of a national economy into a single data point of surpassing density. The conventional feeling about G.D.P. is that the more it grows, the better a country and its citizens are doing. In the U.S., economic activity plummeted at the start of 2009 and only started moving up during the second half of the year. Apparently things are moving in that direction still. In the first quarter of this year, the economy again expanded, this time by an annual rate of about 3.2 percent.
Do Mistakes explain ‘cooperative’ behaviour? - via Phys Org – How people behave in economic games, where they can choose to be selfish or cooperative, can be explained more easily by ‘mistakes’ than wanting others to succeed, Oxford researchers find.
Anatomy of an ecological catastrophe: what to expect in the deep Gulf of Mexico – via Deep Sea News – The oil spill in the Gulf of Mexico is now over a month in duration and continues to worsen. Estimates of the total oil flowing from the damage were estimated initially at 5,000 barrels per day. Now the 26,000 estimate by FSU professor Ian MacDonald looks more plausible. Moreover, the greatest impact of the current spill may occur below, not above, the ocean surface. But the impacts of oil drilling to the deep sea began long before the first oil leaked from the damaged well.
Failed Real Estate: Nine Ghost Towns of the Recession - via Good – From Tampa to Dublin to Alicante and Dubai empty condos and villas that were never home to anyone, litter the landscape as a sterile reminder of a party that never was. But perhaps the biggest housing bubble of them all has just been popped – deliberately by the Chinese government who saw that Shanghai and Beijing real estate increases were unsustainable. Over the last month, Beijing housing prices have fallen at a unbelievable 377% annualized rate, possibly heralding part III of the Great recession following the US banking collapse and European sovereign debt crisis.
Padded Pensions Add to New York Fiscal Woes - via NYT – In Yonkers, more than 100 retired police officers and firefighters are collecting pensions greater than their pay when they were working. One of the youngest, Hugo Tassone, retired at 44 with a base pay of about $74,000 a year. His pension is now $101,333 a year.
Video: Bill Gates Holds Office Hours; Talks about Giving Back – via Open Culture – The Bill Gates college tour rolled through Stanford University in late April. And Gates brought with him a message for students: Philanthropy counts. No matter how young you are, you can start thinking about giving back.
Can We Spot an Asset Bubble - via FT – So how hard are housing price bubbles to identify? Looking at US housing prices over the past few decades, it’s not immediately obvious why a bubble would be difficult to identify. Housing prices may stray from rental prices, but in the long run, they return to the rental levels. (And why wouldn’t they? If houses were actually becoming more valuable in a given city, both housing and rental prices would rise).
20 Worst Drinks in America 2010: Comparing Drinks with Junk Food- via Mens Health – We stopped making our own iced teas and lemonades (recipe: water, lemon, sugar) and started buying them in bottles or mixes, with ingredients like “high-fructose corn syrup” and “ascorbic acid” on the labels. We stopped thinking of a soda as a treat – akin to an ice cream or a candy bar – and started seeing it as the equivalent of a glass of water, drinking two, three, four, or more a day. (The average American now drinks about a gallon of soda a week!) Then we stopped drinking water out of the tap and started demanding that it be artificially flavored and put into bottled with the words “vitamin” or “energy” stamped on their labels. And, in just the last decade or so, many of us stopped brewing our own coffee and started buying things with vaguely European names, like “mocha latte,” or swapped out coffee altogether for something called “energy drinks,” which taste exactly like what would happen if a crazed pastry chef hijacked a truckload of Smarties and drove it into a battery acid factory. And the result of all this beverage evolution is that, today, walking into a convenience store or a beverage distributorship has become dangerous to our health.
Politicians, Banks, & Shell Games: How we elected corrupt people to rule our markets and then oversee regulation - via Skeptical CPA – One of the great ironies of our times is that the two strongest defenders of the Fannie-Freddie shell game, Chris Dodd and Barney Frank, are now in charge of reforming banking regulation. .
Miguel’s Weekly Favorites
When Ideas Have Sex - via Scientific American – f we pull back and take a long-horizon perspective, however, the free exchange between people of goods, services and especially ideas leads to trust between strangers and prosperity for more people. Think of it as ideas having sex. That is what zoologist and science writer Matt Ridley calls it in his book The Rational Optimist: How Prosperity Evolves (HarperCollins, 2010). Ridley is optimistic that “the world will pull out of the current crisis because of the way that markets in goods, services and ideas allow human beings to exchange and specialize honestly for the betterment of all.”
Are women more risk-averse than men? If so, why? – via Bakadesuyo – We use a Colombian TV game show to test gender differences in competitive behavior where there is no opportunity for discrimination and females face no gender specific external constraints. Each game started with six contestants who had to answer general knowledge questions in private. There were five rounds of questions and, at the end of each, one participant was eliminated. Despite equality in starting numbers, women earn less than men and exit the game at a faster rate. In particular, there are more voluntary withdrawals by women than men. We draw an analogy between the game and the process by which employees rise through the levels of a corporation. As such, we note that “glass ceilings” may result, in part, from women’s own behavior and this raises the issue of how women are socialized to behave. At the same time, our results illustrate that maintaining and promoting gender diversity at the lower/middle ranks of organizations is necessary to obtain gender diversity at the top
What Are Your Odds of Dating a Supermodel - via Book of Odds – Many of us may have dreamed about dating a supermodel, but only a lucky few get to fulfill that dream. Supermodels are a rare breed—they are beautiful, hard-working, and very well-off—and there’s no reason to expect them to date just anyone. But if you’re not just anyone, maybe you have a chance.
The wisdom of herds: How social mood moves the world – via Leadon Young -DURING an international conference in Switzerland in 2006 I told an audience that if I were to take a 20-year nap, one thing I would certainly not expect to see when I awoke would be a European Union, or at least not one that bore more than a passing resemblance to today’s model. This followed an earlier claim of mine that the phenomenon popularly known as globalisation was in the process of rolling over, and that it will be replaced in the coming years by its opposite, localisation. This was probably the least popular talk at the meeting, and a leading candidate for the talk that provoked the most hostile audience reaction of any I have ever given. (I should mention that this was a conference of futurists.)
The Dark Side of Creativity: Stressful situations and bad moods can spur creativity. - via Columbia – Creativity is vital. It can generate new products, invigorate old ones, launch or enhance a brand and introduce efficiencies that increase the bottom line. But where does creativity come from, and how can it be harnessed?
Can you tell the difference between real and ‘fake’ stock prices? New study says that most people can – via Mind Your Decisions – There’s a neat online video game that tests whether you can identify real stock data from randomized, generated data. The game is called ARORA, an abbreviation for “a random or real array” of prices.
The 4 Stages of Fear, Attacked-by-a-Mountain-Lion Edition - via Discover H/T MindHacks - In the throes of intense fear, we suddenly find ourselves operating in a different and unexpected way. The psychological tools that we normally use to navigate the world—reasoning and planning before we act—get progressively shut down. In the grip of the brain’s subconscious fear centers, we behave in ways that to our rational mind seem nonsensical or worse. We might respond automatically, with preprogrammed motor routines, or simply melt down. We lose control.
How Our Networks Can Predict Our Behaviour - via School Of Life – We often find ourselves wondering what people will do next. Will partners still love us? Our employers keep us in work? Will that old lady jump the bus queue? Or, even, who will form the next government with whom? Elections turn prediction into a national obsession and the coalition may make that state permanent.
Being Bad at Relationships Is Good for Survival - via Live Science – Feeling happy and secure in our relationships is a goal many people strive for, but in times of need the emotionally insecure partners may be doing us a favor by being more alert to possible danger. Evolution may have shaped us to consist of groups of emotionally secure and insecure individuals, researchers write in the March issue of the journal Perspectives on Psychological Science.
Men are bigger liars than women, says poll - via BBC – Men are more likely to tell lies than women and feel less guilty about it, says a survey.In a poll of 3,000 people, researchers found that the average British man tells three lies every day, that’s equivalent to 1,092 a year.
Capitalism Rising: The Lessons of Lepanto - via PsyFi Blog – Arguably the eventual triumph of capitalism was inevitable anyway, but history doesn’t run on tramlines. Had the nascent capitalist powers of the West lost that battle there may never have been the full flourishing of the Enlightenment. An all-powerful and mighty empire took on a fragmented and vaguely farcical alliance of emerging semi-states and lost, because the other side had the best financiers.
Creativity & The Internet – Via Guardian – Proust said original books were the offspring of ‘darkness and silence’, but there’s not so much secret inspiration today. Can creativity flourish in the age of the internet where all is exposed?
138 Years of Inventions that Time Forgot - via PopSci – A dog-powered car, a plastic bike sail, and a merry-go-round rowing machine are just a few of the quirkier inventions documented in PopSci’s archives
The Effects of Forecasting on Creative Problem-Solving - via CRJ – Prior research suggests that forecasting may play a critical role in both the evaluation of new ideas and planning for idea implementation. In the present study, 141 undergraduates were asked to formulate advertising campaigns for a new product. These campaign proposals were evaluated for quality, originality, and elegance. Prior to formulating these campaigns, participants were asked to forecast the implication of their ideas and forecast the effects of a plan for implementing their best idea. It was found that the extensiveness of forecasting the implication of ideas and the extensiveness of forecasting the implications of plans were related to the quality, originality, and elegance of the advertising campaigns proposed. The effectiveness of these forecasts was influenced by analysis of causes and goals and the use of case models. The implications of these findings for understanding the role of forecasting in creative thought are discussed.
Who Makes the Hypothesis in a Hypothesis Testing? – via Iterative Path – Most of my works on pricing and consumer behavior studies rely on hypothesis testing. Be it finding difference in means between two groups, non-parametric test or making a causation claim, explicitly or implicitly I apply hypothesis testing. I make overarching claims about customer willingness to pay and what factors influence it based on hypothesis testing. The same is true for the most popular topic, these days, for anyone with a web page – AB split testing. Nothing wrong with these methods and I bet I will continue to use these methods in all my other works.
Opportunity Cost of $0 Price - via Iterative Path – The most talked about EverNote numbers on freemium conversion shows, 3% paying customers and 97% free users (freeloaders and hopefully some Do-Gooders).
Video: Charlie Rose Interviews Gillian Tett: Analysis of Goldman Hearings – Gillian Tett is US managing editor and an assistant editor of the Financial Times
Get Rhythm: Why the Key to Finding Music You Like Is Rhythm, Not Genre - via Science Daily – So close and yet so wrong — you might love heavy metal like Metallica but your music platform suggests you should also like the Sixties sound of The Doors, simply because both bands are classified as rock.
Shyness Negatively Affects Marital Quality - via ScienceDaily — Shyness can influence the quality of an ongoing relationship — even one as important as marriage — according to a study in Personality and Social Psychology Bulletin
Exclusive Picks + Financial Topics
The Bullshit of Government Statistics – via Brad Feld - Let’s parse this. The first clause says “U.S. Economy Adds 290,000 Jobs in April.” This means to me that a bunch of people found new jobs in April. A bunch. Yay! Good economy. The second clause says “Jobless Rate Rises to 9.9%.” This means to me that the number of people in the U.S. that don’t have jobs went up in April.” A quick search showed that the March “jobless rate” (actually the unemployment rate) was 9.7%. That’s a big relative jump, especially given that it was 9.7% for the first three months of 2010 according to the Bureau of Labor Statistics Economic News Release titled Employment Situation Summary that came out a few minutes ago. Boo! Bad economy.
What the Heck Is Going on in Thailand? – via FP – The idea of Bangkok spiraling into total chaos — as it has over the past week, with 40 people killed so far in street battles between anti-government protesters and the military — is shocking to foreigners. Thailand is not Iraq, or Yemen, or Pakistan; as portrayed in endless books, tourism advertisements, and films, it’s a lush and peaceful place, the type of country where’d you take a honeymoon rather than a hostage. And until recently, that image was mostly accurate — for nearly 20 years, Thailand had avoided serious political violence.
Riding Financial Bubbles - via SSRN – We empirically analyze rational investors’ optimal response to asset price bubbles. We define bubbles as a sudden acceleration of price growth beyond the growth in fundamental value given by an asset pricing model. Our new bubble detection method requires only a limited time-series of historical returns. We apply our method to US industries and find strong statistical and economic support for the riding bubbles hypothesis: when an investor detects a bubble, her optimal portfolio weight increases significantly. A dynamic riding bubble strategy that uses only real-time information earns abnormal annual returns of 3% to 8%
The ROI Payback of Tossing Incandescents For CFLs – via True Cost – After moving into my current home, I discovered that the previous owners had left dozens of light bulbs for the various fixtures in the house. I was happy to know that I wouldn’t have to restock for a while. In the interim, compact fluorescent light bulbs have become inexpensive, and LED bulbs have begun to become economical as well. While I have realized for some time that CFLs are a good investment with a short payback period, I have yet to replace my bulbs. At some level, it feels wrong to throw out all those light bulbs. What is the real return on throwing out a working bulb and replacing it with a CFL?
How the Internet Porn Business Works - via MT Tech Review – A first-of-its-kind analysis of the online porn industry reveals the economics, and the vulnerabilities, of the shady world of online adult media. If you want to know how the online adult industry works, you must become a part of that industry. That’s what five security researchers from The Technical University of Vienna, Eurecom and UC Santa Barbara did in an attempt to get a handle on how the adult industry makes money online. And they found that it’s exposing everyone who consumes its wares to previously unsuspected levels of malware.
CMBS Delinquency Rate Tops 7%, Led by Hotels at 13% - via Research Recap – The delinquency rate on loans included in US Commercial Mortgage Backed Securities (CMBS) increased 60 basis points in April to 7.02%, according to Moody’s Investors Service’s Delinquency Tracker (DQT).
How are software Patents Screwing With Innovation -via A VC – I found this on Brad Feld’s blog this morning. It shows why software patents and business method patents are a problem for the innovation economy.
Tom Barrack of Colony Capital: Thoughts On Recent Financial Scenarios - The European reordering and the natural impact on global growth projections will cause a retrenchment and reconsideration of “risk premiums” everywhere, including the USA. All currencies will feel the “resetting” pressure and real assets will gain prominence as a capital preservation bookmark. Credit spreads, earnings projections, and Wall Street multiples will continue to be erratic as markets search for integration or fiscal alignment of the European Community. Real estate values everywhere will continue to be stimulated by “residual value” rather than current cash flow, as a proxy to “hold” without the fear of “folding”. NOIs will take longer to re-emerge but capital flows and the continued unavailability of acquisition debt will keep cap rates dear. Banks and Special Servicers will start bringing bad loans to market and “risk premiums” on debt will re-emerge and put an end to the amateur flood of liquidity into these markets. As a consequence, more community and small regional banks will likely be ceased and the Japan-esque “extend and pretend” and “pray and delay” tactics will come under real pressure.
A Simple Equation for Finance- via Columbia – New research shows why preventing another mortgage crisis might come down to cultivating better basic math skills.
Why recent tax rebates did not work - via Economic Logic – There used to be a time, not long ago, where tax rebates were popular. The idea was that putting money in people’s pockets would drive them to spend it all and by multiplier magic the economy would grow sufficiently to recoup the lost taxes. And it did not work, as the Ricardian Equivalence would state, people mostly saved it all up for the looming tax increases. The only real impact came from those households where the Ricardian Equivalence would not hold, the cash constrained ones.
Naked Truth on Default Swaps - via NYT -Should people be able to bet on your death? How about your financial failure? In the United States Senate, Wall Street won one this week when the Senate voted down a proposal to bar the so-called naked buying of credit-default swaps. If that were the law, you could not use swaps to bet a company would fail. The exception would be if you already had a stake in the company succeeding, such as owning a bond issued by the company.
Less competition is good for insurance - via Economic Logic – Competition is best, economists often claim. Except when it is not, for example in the case of natural monopolies, where the duplication of infrastructure is wasteful. THe case can also be made that competition is not as good as one would think in the insurance industry
Groupon’s Biggest Threat? Local Publishers. - via SAI – Groupon has spent a vast fortune building two important barriers to entry in the group-buying space: brand authority and distribution. that investment may hold off competition from newer daily deal services, there are existing media properties in each local market that have spent decades building their brand and distribution: local newspapers and magazines.
Why do women leave science and engineering? - via Voxeu – American women leave science and engineering at a higher frequency than men. This column suggests that the gender gap is explained by women’s relative dissatisfaction with pay and promotion opportunities. This gap is correlated with a high share of men in the industry. Remedies should therefore focus on such fields with a high share of male workers.
Pricing Baseball Tickets - via Michael Roberto – Business Week has an interesting article this week about a young economics PhD, Barry Kahn, from the University of Texas. Kahn has devised software that enables baseball teams to dynamically price their tickets, much like the airlines price seats. According to the article, “The software helps the Giants set prices based on past ticket sales, the day and time of the game, the teams’ records, the pitching match-up, the weather, the going rate on resale Web sites like StubHub, and other data.” The software holds the promise that teams can not only fill more seats, but generate more revenue overall.
Consumer Reports vs. QVC - via NYT – Consumer-product testing is down to a science, but then again, so is shopping-network pitchmanship. Your call which prevails.
The Capitalist & The Entrepreneur: Essays on Organizations and Markets - via Truth On Market – I purchased my copy of Peter Klein’s latest — The Capitalist & The Entrepreneur: Essays on Organizations and Markets — today. It is available for purchase here and here. And if you wont to sneak a peak, you can see the full version here. The role of the entrepreneur is one of the more under-theorized subjects in economics and, in turn, law and economics. Peter is an insightful and thoughtful economist with the right toolkit to bring to bear on this project. He is one of my favorite thinkers about these subjects (he is also my second favorite Klein, no small compliment in these quarters). I’m greatly looking forward to the book.
Third Avenue Value Q2 2010 - via Stingy Investor – “It is difficult to function as a value investor unless the value analyst has a firm grasp of economic reality. It is equally difficult to promulgate intelligent financial regulations unless the sponsors of the regulation have a firm grasp of economic reality. Neither the general public, nor legislators and Obama administration officials, seem to have much of a grasp of economic reality, at least when it comes to dealing with troubled financial institutions.”
A royal invitation to raise the debate on finance - via John Kay – We do need to increase the scope for structured and independent inquiry outside government, but with the kind of authority that only official status can confer.
Few Americans are Pursuing Green Jobs - via Good – Thanks to the American Recovery and Reinvestment Act, green jobs training opportunities can be found in communities across the nation. Training programs for energy auditors, energy efficiency retrofit experts, renewable energy installers, and much more are in progress across the nation. Some programs are tailored to provide training for underserved populations, women and unemployed individuals while others are open to anyone. Despite the surge in funding for green jobs training programs, only 1 percent of Americans recently surveyed currently has a green job or is considering one.
Academic Research Worth Reading
WHAT “TRIGGERS” MORTGAGE DEFAULT? - via Phily Reserve – This paper assesses the relative importance of two key drivers of mortgage default: negative equity and illiquidity. To do so, we combine loan-level mortgage data with detailed credit bureau information about the borrower’s broader balance sheet. This gives us a direct way to measure illiquid borrowers: those with high credit card utilization rates. We find that both negative equity and illiquidity are significantly associated with mortgage default, with comparably sized marginal effects. Moreover, these two factors interact with each other: The effect of illiquidity on default generally increases with high combined loan-to-value ratios (CLTV), though is significant even for low CLTV. County-level unemployment shocks are also associated with higher default risk (though less so than high utilization) and strongly interact with CLTV. In addition, having a second mortgage implies significantly higher default risk, particularly for borrowers who have a first-mortgage LTV approaching 100 percent.
READING THE RECENT MONETARY HISTORY OF THE U.S., 1959-2007- Philly Fed – In this paper we report the results of the estimation of a rich dynamic stochastic general equilibrium (DSGE) model of the U.S. economy with both stochastic volatility and parameter drifting in the Taylor rule. We use the results of this estimation to examine the recent monetary history of the U.S. and to interpret, through this lens, the sources of the rise and fall of the great American inflation from the late 1960s to the early 1980s and of the great moderation of business cycle fluctuations between 1984 and 2007. Our main findings are that while there is strong evidence of changes in monetary policy during Volcker’s tenure at the Fed, those changes contributed little to the great moderation. Instead, changes in the volatility of structural shocks account for most of it. Also, while we find that monetary policy was different under Volcker, we do not find much evidence of a big difference in monetary policy among Burns, Miller, and Greenspan. The difference in aggregate outcomes across these periods is attributed to the time-varying volatility of shocks.
Red Diffuse Light Suppresses the Accelerated Perception of Fear - via APS – Prioritization of affective events may occur via two parallel pathways originating from the retina—a parvocellular (P) pathway projecting to ventral-stream structures responsible for object recognition or a faster and phylogenetically older magnocellular (M) pathway projecting to dorsal-stream structures responsible for localization and action. It has previously been demonstrated that retinal exposure to red diffuse light suppresses M-cell neural activity. We tested whether the fast propagation along the dorsal-action pathway drives an accelerated conduction of fear-based content. Using a visual prior-entry procedure, we assessed accelerated stimulus perception while either suppressing the M pathway with red diffuse light or leaving it unaffected with green diffuse light. We show that the encoding of fearful faces is accelerated, but not when M-channel activity is suppressed, revealing a dissociation that implicates a privileged neural link between emotion and action that begins at the retina.
Click On Images For Larger Version
Underfunded State Pensions – via Chart Porn – (interactive so I can’t Link)
Household Debt 1980-2009 - via Chart Porn – News coverage has focused on the derivative markets, sub-prime mortgage debt and increasing regulation that the Federal Government plans to impose on derivative securities and financial institutions. But, the recent financial troubles were really caused by excessive household borrowing. I decided to pull some data from the Federal Reserve to see how families are managing their household debt.
Everything You Need To Know About The Oil Fiasco In The Gulf!!! Infographic Word -