Weekly Roundup 36: A Curated Linkfest For The Smartest People On The Web

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-Miguel Barbosa
Founder Of Simoleon Sense

Special Feature – How to Buy Loans from the FDIC – Via PE Hub – While the FDIC is well known for providing deposit insurance, another of its principal roles is that of receiver for failed depository institutions (i.e., banks and thrifts). In connection with this activity, the FDIC engages in the post-failure sale of the assets of these institutions in order to recover the maximum amount possible to settle the claims of the institution’s creditors, including the FDIC.

Feature: Why are the Chinese such legendary savers? The answers shed light on why that habit is about to ­change. – Via Wilson Quarterly – In the annals of thrift, few feats rival the accomplishments of China, Japan, and other East Asian nations during the past 30 years. China’s workers and institutions now bank some $2.5 trillion a year, just over half their total income, while their Asian counterparts put away nearly as much, creating a vast pool of savings that has transformed the global economy. While the sons and daughters of the middle class and the rich throng China’s many malls to window-shop, their poorer peers, as well as their parents and grandparents, still salt away a large share of their weekly ­paychecks.

Feature: Megan Mc Ardle  Responds To Taibbi Article On Goldman Sachs As A Bubble Machine Taibbi is a gifted narrative journalist, whose verbal talents I greatly admire.  But financial meltdowns don’t offer villains, for the simple reason that no one person or even one group is powerful enough to take down a whole system.  Confronted with this, Taibbi doesn’t back away from the narrative form, or apply it to smaller questions where it is more appropriate, as William Cohan did in House of Cards.  Instead, he grabs whoever’s nearest to hand and builds them up into a gigantic straw villian, which he proceeds to bash with a handful of recently acquired technical terms that he clearly doesn’t quite understand.  It’s not that everything he says is wrong, but the bits that are true aren’t interesting, and the bits that are interesting aren’t true.  The whole thing dissolves into the kind of conspiracy theory he so ably lampooned in The Great Derangement.  The result is something that’s not even wrong.  It’s just incoherent.

Feature: Average Consumer Spending Where Does The Money Go – Via Chart Porn

Feature: Student Debt By State – Via Data Viz – Average Debt Levels Of College Graduates –

Feature: Identifying and Deflating Asset Bubbles Via Harvard Law – Despite its ostensible focus on stability, the Obama administration’s financial reform proposal offers no plan to prevent asset bubbles like the one in subprime loan securities that triggered the current crisis. Although expected, this outcome is disappointing because it appears to be based on an exaggerated fear that a policy against bubbles would fail.

Feature: The Fall of the Toxic-Assets Plan – Via Finance Professor & WSJ – The plan for buying troubled assets — which was earlier announced as the central element of the administration’s financial stability plan — has been recently curtailed drastically. The Treasury and the FDIC have attributed this development to banks’ new ability to raise capital through stock sales without having to sell toxic assets. But the program’s inability to take off is in large part due to decisions by banking regulators and accounting officials to allow banks to pretend that toxic assets haven’t declined in value as long as they avoid selling them.

0. Is Borrowing a Substitute for Getting Paid?? – Via Credit Slips – Henry Ford had a good idea. In January, 1914 he announced to the world that his workers would be paid five dollars a day. The five-dollar day doubled the average wage for auto workers, produced long lines outside of the factory gates, and helped to create a mass market for the Model T and other consumer durables.

1. Video: Charlie Rose interviews Quincy Jones In Appreciation Of Michael Jackson – Via Charlie Rose – An appreciation of Michael Jackson with Kelefa Sanneh of “The New Yorker” and producers Quincy Jones & L.A. Reid

2. Is less always more? – Via Cognitive Daily –  Some researchers have found similar effects with buying decisions: shoppers with just a few flavors of jam to choose from are more likely to buy than those given dozens of options (including the original choices). It’s as if we’re paralyzed when we have a large number of options to choose from, and so we end up getting nothing. But is less always more? Most of the studies on number of choices have either given participants a very small or a very large number of options. Does this mean just one choice is the best? Or is there some larger number of choices that is optimal?

3. Audio: Mc Alvany Weekly Interview: With Marc Faber – Via Mc Alvany Weekly

4. One War We Shouldn’t Avoid: A New Approach to Reducing the Cost of Future Catastrophes – Via Wharton – In 2005, three major hurricanes — Katrina, Rita and Wilma — struck the U.S. Gulf Coast area, causing not just death and destruction, but also leading to insurance payments and federal disaster relief of more than $180 billion. Today, say the authors of a new book titled, At War with the Weather: Managing Large-Scale Risks in a New Era of Catastrophes, the U.S. is even more vulnerable to catastrophic losses because of the increasing concentration of population in high-risk coastal regions. The coming months could bring devastation on a large scale.

5. A “Dow Jones” for the Ocean – Via Good – Between the gyres of trash, overfishing, and climate change, our oceans are in a fragile state. But how bad is it? It’s hard for regular folks to keep track. So a team made up of scientists from the New England Aquarium, Conservation International, and the National Geographic Society are developing an Ocean Health Index, a single number that’ll represent the health of our oceans.

6. Video: Law Schools Mull Whether They Are Churning Out Too Many Lawyers – Via Fora.Tv – As traditional media passes into the great beyond, how will the landscape change? Experts weigh in. Newspapers are dying and everything is about to change in the world of journalism. But don’t mistake the decline of newspapers with the decline of journalism. The power is shifting and consumer’s appetite for news has become insatiable. Who’s going to be making money and how? Industry experts discuss what to expect next in the changing world of journalism.

7. Broadband Hype -Via Wilson Quarterly –  It seemed intuitively obvious: If you made ­high-­speed access to the Internet available in sparsely populated areas, rural America would enjoy the same sort of economic boost that urban America did when broadband largely replaced slower ­dial-­up Internet access during the last 10 years. Notably, it seemed obvious to President Barack Obama, whose $789 billion economic stimulus bill enacted by Congress in February included up to $7.2 billion in grants and loans to expand high-speed access in remote corners of the country. A strong economy, Obama said, “means expanding broadband lines across America, so that a small business in a rural town can connect and compete with their counter­parts anywhere in the world.”

8. Human-Computer Psychology – Via Psych Central – David Kieras on human-computer interaction and usability, in a course lecture at CHI2008.

9. How tools become part of the body – Via BPS – When admiring a brilliant sportsman or woman, commentators often describe a wielded tennis racquet, cricket bat or other sporting appendage, as having become like an extension of the athlete’s own body, so fluid and deft is their control of the lump of metal or wood. It’s a metaphor we should be able to relate to, since all of us, champion athlete or not, absorb tools into our inner representation of our own bodies – what cognitive psychologists call our “body schema”.

10. Unemployment and Socioeconomic Status – Via Everyday Sociology Blog – Being unemployed can be an incredibly stressful experience. Difficulty paying bills is the most obvious stressor, but there are others: the threat of losing a home, feeling rejected while looking for a new job, and declining self-esteem are others. How do you now answer the question, “what do you do?”

11. Do you want to improve your memory? Run a marathon!! – Via Strenuas World – Do you want to improve your memory? Having trouble remembering how to do things that you once could do without thinking? Then maybe you should run a marathon. Researchers have recently tested the idea that in highly strenuous exercise, such as marathon running, extreme physical demands are placed on an athlete that may result in neurohormonal changes, which alters the functioning of their memory.

12. Why fear mongering is so successful – Via Biotunes –  No one would try to defend politics as a rational process, although some like to agonize over phenomena such as the conundrum of people who do not vote for their economic self-interest (e.g. What’s the Matter with Kansas?: How Conservatives Won the Heart of America). People from both extreme ends of the political spectrum claim to have logically thought through their positions, but that process always carries bias along with it. The root of our social biases is in-group vs. out-group mentality – how we distinguish those ‘with’ us from those ‘against.’

13. The Gendered Situation of Chess – Via The Situationist – “Normally knowing your enemy is an advantage. Not so in chess games between the sexes. In a study published in the European Journal of Social Psychology, Volume 38, Issue 2 (March/April 2008) (pdf here), Anne Maass, Claudio D’Ettole, Mara Cadinu, Dr Anne Maass (et al.) pitted male and female players against each other via the Internet. Women showed a 50% performance decline when they were aware that they were playing a male opponent.”

14. The most effective teachers are in a class of their own Via PhysOrg – These are the latest findings of research funded in primary and secondary schools by the Economic and Social Research Council (ESRC) into what makes good teachers even better.

15. If Cash In< Cash Out  = Your A Consultant – Via Blog Maverick – Business is a very simple concept.  You have to pay your bills.  If you have anything left over, you get to smile and spend it as the principals of your business see fit. If you don’t have enough to pay your bills, you either have to raise money to cover the deficit, file bankruptcy and try it again, or go out of business.Simple.

16.Richer People Feel Younger – Via Economix – Light in the wallet? You’re probably not feeling young at heart. The Pew Research Center recently released fascinating results from its survey on aging Americans, entitled “Growing Old in America: Expectations vs. Reality” (also written up here). The news release is full of interesting charts on perceived versus actual living conditions of the elderly, as well as the relationship between older adults and their children, but my favorite graph is the one below: how old people are versus how old they feel.

17. “Half of the World’s Emissions Came from Just 700 Million People” – Via Economists View – New Princeton method may help allocate carbon emissions responsibility among nations, EurekAlert: Just months before world leaders are scheduled to meet to devise a new international treaty on climate change, a research team led by Princeton University scientists has developed a new way of dividing responsibility for carbon emissions among countries.

18. France, Unlike U.S., Is Deep Into Stimulus Projects – Via NY Times – FONTAINEBLEAU, France — French workers normally take off much of the summer, but this month, there is something of a revolution going on here at this former royal chateau roughly 30 miles southeast of Paris. The throngs of tourists will be jostling alongside stonemasons, restoration experts and other artisans paid by the French government’s $37 billion economic stimulus program.

19. Are Depressions Necessary? – Via American Prospect – Economists, particularly those of the ascendant Chicago school of free market enthusiasts, were in a triumphant mood at the beginning of this decade. Speaking at the annual meeting of the American Economic Association in 2003, Nobel Laureate Robert Lucas went so far as to say that macro-economics — with its focus on the stable maintenance of national economies — could safely be retired. “The central problem of depression prevention,” he said, “has been solved for all practical purposes.”

20. On Falling In Love Online – Via NYT – I’m starting to think that Internet romances, including Mark Sanford’s, are not romances between people at all. They’re affairs with the Internet. Watch people who are newly in love, especially any kind of love that requires that the participants keep stealthy and apart, and they’re all over their iPhones and Palm Pres. It’s P.D.A. with P.D.A.’s. Romance seems to have become an online multiplayer fantasy-adventure game, no less thrilling than World of Warcraft, and open to all ages. Apparently you’re never too old to relish using special screen names to send cryptic messages on secret decoder devices.

21. Understanding The Relationship Between Fear & Power – Via P,S,W – Our lives are often subject to a pattern of movement that is set in motion at birth. The human animal spends an inordinate amount of time in the mother’s womb. When we are suddenly thrust out of that zone of comfort–where all our needs have been met–we enter an unfamiliar world of noise and light. We cannot help but desire a return to the womb. The mother serves as a substitute for this desire and we cling to her. We experience her absence for any extended period of time as a kind of terror.

22. Feeling the Heat: The Effects of Performance Pressure on Teams’ Knowledge Use and Performance – Via HBS – Why do teams often fail to use their knowledge resources effectively even after they have correctly identified the experts among them? Project teams are a prominent feature of the knowledge-based economy, and member expertise has long been recognized as an important resource that can greatly affect team performance, but only to the extent that it is accurately recognized and used to accomplish the objective. The step between recognizing others’ expertise and then actually applying it to achieve a collective outcome, however, is highly problematic: Even when individuals know who holds relevant task expertise, they are often unwilling or unable to give the experts appropriate influence over the group process and outcomes. HBS professor Heidi K. Gardner takes a multidisciplinary approach to develop theory explaining how interpersonal dynamics in teams affect members’ use of each other’s distinct knowledge, ultimately leading to differential performance outcomes.

23. FDIC Proposal May Inhibit Private Equity Investments in Failed Banks Via Harvard Law – The FDIC recently issued a proposed policy statement laying down stringent new ground rules for private equity investments in failed banks. Currently, private equity firms face significant regulatory challenges in structuring investments in banks and thrifts. The Federal Reserve (in the case of bank acquisitions) and the OTS (in the case of thrift acquisitions) remain the principal regulators determining capital, governance and control considerations relating to permissible bank/thrift acquisition structures. However, the FDIC’s proposed policy statement would impose meaningful additional capital and related qualifying considerations in order for a private equity sponsored vehicle to acquire a failed bank being sold by the FDIC.

24. How a Reduction of Standard Working Hours Affects Employment Dynamics – Via policy Pointers – A 20-page Dutch discussion paper analysing the employment effects of a reduction in standard working hours in Portugal

25. The Impacts of Foreclosures on Families and Communities: A PrimerVia Policy Pointers – his 54-page US brief summarizes what is known about how foreclosures adversely affect households and their neighborhoods — from children and the elderly to public safety and local property tax revenues. It also looks at policies, programs, and response strategies to prevent or mitigate the fallout.

26. ‘Big Pharma’ may lose ad tax breaks – Via NPR – To help pay for the health care overhaul bill, the Obama administration may cut a tax deduction drug companies get for television advertising. Sally Herships reports.

27. High Hopes for Chinese Real Estate – Via Wharton – According to a Bloomberg report, car sales in China rose 48% last month. And there are other signs that, at least in some sectors, China’s economy is doing well. One of them is real estate. During a panel discussion at the recent Wharton Global Alumni Forum in Beijing, several Chinese developers were upbeat about the prospects for China’s residential real estate industry during the next decade. Counter-intuitive though it may seem, the impact of the global financial crisis on China’s real estate market has been positive, some panelists said.

28. WSJ Economist Survey – Via Chart Porn – Interactive results of a survey of 54 economists, on a number of indicators and issues. Updated Monthly.

29. Fed Balance Sheet Updated To 7/9/09 – Via CP –

About Miguel Barbosa

I run this site.

12. July 2003 by Miguel Barbosa
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