Economics Roundtable

What is the value of a wolf? What is the value of a crane? What is the value of a praire chicken? What is the value of a marine mammal?

The meme of the day, as admirably summed up by Paul Murphy, is the question of why exactly insider trading is illegal, and whether it should be. I seem to recall a trenchant column by Holman Jenkins in the WSJ around the time of the Martha Stewart case arguing ...

Apparently Citigroup is considering selling off as much as $400 billion in "non-core assets", including its retail banking operations in Germany.

Is Citibank Germany really non-core? It would seem so. I bank with Citi in the US, and on Wednesday I used my ATM card to withdraw some euros ...

Readers can infer the NYT's approval based on the "Homeowner Rescue Plan Passed Despite Veto Threat." article's headline Supporters of the plan undoubtedly like to call it a "homeowner" rescue plan, but that does not make it an accurate description of the plan.

This bill, the central feature of ...

Now the mortgage company is warning that it may not be able to pay its bills, and has set out to force those who lent money to it to agree to accept only a fraction of what they are owed. It appears that its lenders ...

Apparently Citigroup is considering selling off as much as $400 billion in "non-core assets", including its retail banking operations in Germany.

Is Citibank Germany really non-core? It would seem so. I bank with Citi in the US, and on Wednesday I used my ATM card to withdraw some euros ...

The meme of the day, as admirably summed up by Paul Murphy, is the question of why exactly insider trading is illegal, and whether it should be. I seem to recall a trenchant column by Holman Jenkins in the WSJ around the time of the Martha Stewart case arguing ...

A new global study from The Global Entrepreneurship Monitor (GEM) reports that women entrepreneurs are a key contributor to economic growth in low/middle income countries, particularly in Latin America and the Caribbean.

Among the findings:

- There is no gender difference in the survival rate ...

“Trying to buy a mortgage bank in the midst of the subprime crisis was the equivalent of being a noodle salesman in Nagasaki when the atomic bomb went off. Not a lot of noodles left, or even a person, and that’s what happened to us on this deal.”

Zubin Jelveh reports:

If you're a married woman living in the New York City area, there's a better than 50 percent chance that you don't work, according to a recent analysis of Census data by economists affiliated with the St. Louis Federal Reserve Bank.

More specifically, only 49 percent of ...

The issue of off-label prescribing is heating up again.� A recent article in the New England Journal of Medicine by Randall Stafford made the case for greater regulation.� I am concerned that the benefits of off-label prescribing are not fully appreciated.� Dan Klein and I wrote a letter to ...

Going back to the tax rates of the 1990s doesn't mean that households will pay 1990s taxes. Because the tax brackets haven't risen along with incomes, average taxes would be significantly higher, and grow each year.

If the [Bush] tax cuts expire, income-tax revenues ...

You thought New York City landlords were notoriously greedy and aggressive? Wait till you see what private-equity companies get up to when they enter the space. Gretchen Morgenson reports:

In the last four years, developers backed by private equity firms have acquired almost 75,000 rent-regulated apartments, Mr. ...

Warner Brothers is closing down its two art-house production companies, Picturehouse and Warner Independent Pictures, with the loss of about 70 jobs. The idea, according to Warner's Alan Horn, is that "between both New Line and main Warner's, we had the pieces in place to release any movie we ...

Or at least reporters are. What on earth would any reader learn about the budget from this AP story on the farm bill that ran in the NYT? The article just reports every item in billions of dollars -- it never gives shares of the budget or per person ...

That is an implication of the claim in a Washington Post article that a $7,500 first-time home buyer tax credit is intended to keep house prices from falling. In large parts of the country the housing bubble pushed prices out of the reach of most moderate and middle income ...

How did medieval manufacturing guilds solve the "twin afflictions of adverse selection and counterfeit goods" that made long-distance trade difficult? :

Brand Names Before the Industrial Revolution, by Gary Richardson, NBER WP 13930, April 2008: Abstract In medieval Europe, manufacturers sold durable goods to anonymous consumers in distant markets, this ...

High fuel prices are causing the value of used SUVs to plummet, often below what's listed in the buying guides many shoppers use to negotiate with dealers.

As a result, some new-car buyers think they're getting cheated ...

You thought New York City landlords were notoriously greedy and aggressive? Wait till you see what private-equity companies get up to when they enter the space. Gretchen Morgenson reports:

In the last four years, developers backed by private equity firms have acquired almost 75,000 rent-regulated apartments, Mr. ...

Warner Brothers is closing down its two art-house production companies, Picturehouse and Warner Independent Pictures, with the loss of about 70 jobs. The idea, according to Warner's Alan Horn, is that "between both New Line and main Warner's, we had the pieces in place to release any movie we ...

Everyone’s slagging off Scotchmen called Gordon. So I’ll join in. That Gordon Ramsey talks some rubbish, doesn’t he?:

"Fruit and veg should be seasonal," he said. "Chefs should be fined if they haven't got ingredients in season on their menu.
"I don't want to see asparagus on in the ...

Some of you have argued that insider trading is morally wrong because insiders have a duty to report material information to their employers, shareholders. But is this possible? The problem is that material information doesn't come in simple, identifiable, bite-sized pieces. It often consists in hunches, suspicions and gut ...

V Anantha Nageswaran

A table of inflation rates in many countries around the world is beginning to reveal a disturbing picture. The lowest rate is found in Germany – at 3.0%. Many emerging countries that seem to be doing a truthful job are reporting inflation rates in excess of 10% and ...

Do you remember David Neeleman's ouster from JetBlue last year? He seemed happy to put a positive spin on it then:

Neeleman, JetBlue's largest individual investor, will be non-executive chairman. "I'm not a day-to-day operator," Neeleman, 47, said today in an interview. "It's not something I enjoyed."

Time Out New York declared last year that the Kalahari, in Harlem, was the ugliest condo in the city (no mean feat that). "This is reminiscent of the Kalahari Desert," they said. "Municipal buildings in the Kalahari Desert, that is."

But if it's nasty on the outside, it does redeem ...

Greg Clark on whether we can preserve prosperity as world growth increases demand for limited resources:

How we can preserve prosperity, by Gregory Clark: ...Thomas Malthus warned in 1798 that population pressures would forever keep food and energy scarce and incomes low. In the 200 ...

Do you remember David Neeleman's ouster from JetBlue last year? He seemed happy to put a positive spin on it then:

Neeleman, JetBlue's largest individual investor, will be non-executive chairman. "I'm not a day-to-day operator," Neeleman, 47, said today in an interview. "It's not something I enjoyed."

Time Out New York declared last year that the Kalahari, in Harlem, was the ugliest condo in the city (no mean feat that). "This is reminiscent of the Kalahari Desert," they said. "Municipal buildings in the Kalahari Desert, that is."

But if it's nasty on the outside, it does redeem ...

It has come to my attention that Canada Customs and Revenue Agency has approached an ...

Jeff Frankel reacts to Bryan Caplan's op-ed on the gas-tax holiday:

How Far the NYT had to go to Find an Economist to Support the Gas Tax Holiday, by Jeff Frankel: Economists frequently complain that even when 98% of the profession agrees on something (say ...

Democrats need to reunite. Will they?:

Thinking About November, by Paul Krugman, Commentary, NY Times: The fight for the Democratic nomination seems to be winding down. It’s not completely over, but the odds now overwhelmingly favor Barack Obama. ...

Mr. Obama..., judging by the usual ...

The RBA’s quarterly Statement on Monetary Policy contained an inflation forecast consistent with the 2-3% medium-term target range, assuming you don’t mind waiting until Christmas 2010 to get it.� This was achieved largely by way of a dramatically lower economic growth forecast.� Non-farm GDP is ...

Bristol Myers Squibb sells off wound care division

Drugmaker Bristol Myers Squibb (BMS) announced it has sold off its ConvaTec division to a private equity consortium for $4.1 billion. The buyers were Avista Capital Partners (US -based) and Nordic Capital (European). These two companies own Denmark-based pharmaceutical ...

Yesterday I wrote a post on the NFL's Buffalo Bills playing in Toronto over the next few seasons.� Responding to an earlier post by Skip, I wrote:

It's anecdotal, I realize, but there seems to be high demand for NFL football in Toronto.� That may simply be due to ...

I'm with Megan Barnett on this one: the time to announce a 10% increase in your dividend is not when you're simultaneously annoucing a $7.8 billion loss in a single quarter. Yes, $7.8 billion. I know we're all getting inured to large numbers these days, but that's a loss ...

Raiders of the Lost Arc Elasticity, Part I, Part II, Part III: Robert Jensen finds the elusive Giffen good, with important results. "When we subsidized the price of rice and wheat, people consumed less of them, not more. And in a follow-up paper, we show that when ...

I'm with Megan Barnett on this one: the time to announce a 10% increase in your dividend is not when you're simultaneously annoucing a $7.8 billion loss in a single quarter. Yes, $7.8 billion. I know we're all getting inured to large numbers these days, but that's a loss ...

Raiders of the Lost Arc Elasticity, Part I, Part II, Part III: Robert Jensen finds the elusive Giffen good, with important results. "When we subsidized the price of rice and wheat, people consumed less of them, not more. And in a follow-up paper, we show that when ...

Residents of the Constitution State celebrate Tax Freedom Day today, after a very long wait. Connecticut's Tax Freedom Day is the latest in the nation, and significantly later than the notional Tax Freedom Day of April 23. The�earliest state Tax Freedom Day this year, back on March 29, was celebrated ...

A follow-up on infrastructure. This is from the CBO Director's blog. The main point seems to be that yes, we need more infrastructure investment, and there are ways the federal government can help, but it's mostly a state and local level problem:

In a 266-154 vote ... lawmakers approved a proposal ... to let the Federal Housing Administration (FHA) insure up to $300 billion in new loans over four years if lenders agree to reduce the mortgage principal.

To qualify, the lender would ...

Yesterday, the President signed into law H.R. 5715, the “Ensuring Continued Access to Student Loans Act of 2008.”� The law responds to a perceived liquidity crisis in student lending by allowing government purchases of privately-issued student loan portfolios, so that the lenders will have funds to re-lend. ...

Dean Rotbart is full of bright ideas. Here's the latest, in a comment on this blog:

Let's establish a non-profit, volunteer board of people to recommend standards for financial bloggers, dealing with issues such as conflicts-of-interest, disclosure, and accountability.
Second, let's establish a annual ...

Yes, that is the Citi's Official everything-old-is-new-again slogan. Here's a real ad (you'll have to watch a short ad in order to watch the longer ad for Citi, because, um, this is the internet) followed by a fake ad from the folks at Dealbreaker. I know which one ...

Landon Thomas has a wonderful piece, full of color, on the spat between Jimmy Cayne and Ace Greenberg. Boy can these multimillionaires get petty:

Told that Mr. Cayne, with whom he worked for four decades, had lost much of his net worth and was suffering personally, Mr. Greenberg's ...

Spreads and paradoxical liquidity: More from Steve Waldman.

Pain and inequality: "The average pain rating is twice as high for those in households with annual incomes below $30,000 as for those in households with incomes above $100,000."

Tropicana files for bankruptcy: Casinos hurting.

Take-Two's 'Grand Theft' has $500 ...

Most of the time I have relatively little sympathy for troubled companies. But sometimes they just seem to run into so many body blows simultaneously that you've just got to wince a little. And ExpressJet is one of those cases.

Yes, ExpressJet is suffering from high oil prices, as all ...

Apologies for the late start today, that normallly shouldn't be a problem for someone six hours ahead of New York. But you've never really understood what tariff barriers are until you've stood in a German customs office for five hours trying to retrieve a parcel you mailed ...

Michael de la Merced got a timely interview with BlackRock's Laurence Fink this week, and the resulting story is well worth reading. But one question is not cleared up: what does this mean, exactly, on the subject of the $15 billion of subprime paper that BlackRock is buying ...

Malcom Gladwell's piece in the latest New Yorker, on Nathan Myhrvold and his company, Intellectual Ventures, is a rollicking good read. But once you've read it, it's worth sobering yourself down a bit with John Gapper. For while Myhrvold and his merry crew of idea merchants ...

Yes, there really is a company called Charming Shoppes, and it's in the middle of a full-blown proxy war right now; it's even managed to delay its annual meeting at the very last second because (ahem) it was having difficulty getting "tabulations in place," according to the ...

I'm enjoying this conversation with Dean Rotbart far too much to stop now, even though I suspect it's of interest only to a handful of my readers. But I'm a blogger! So on I go; you're more than welcome to stop reading now if you have no more interest in ...

David Leonhardt took advantage of the fact that I was busy to slip in a column assessing the claims that the CPI is seriously understating inflation. Actually he does a pretty good job, but he does glaze over part of the story.

Leonhardt makes reference to the infamous "Boskin ...

I've been meaning to write about this topic, why risk models break down when we need them the most, but this saves me the trouble since it covers most of the points I wanted to make:

Blame the models, by Jon Danielsson, Vox EU: A well-known American ...

Almost half of the economists in the latest Wall Street Journal forecasting survey decided against answering a question on which presidential candidate offers the most responsible fiscal policies. However, Sen. John McCain was the clear favorite of those who answered the question. Twenty-one economists of 75% of ...

Dean Rotbart is full of bright ideas. Here's the latest, in a comment on this blog:

Let's establish a non-profit, volunteer board of people to recommend standards for financial bloggers, dealing with issues such as conflicts-of-interest, disclosure, and accountability.
Second, let's establish a annual ...

Yes, that is the Citi's Official everything-old-is-new-again slogan. Here's a real ad (you'll have to watch a short ad in order to watch the longer ad for Citi, because, um, this is the internet) followed by a fake ad from the folks at Dealbreaker. I know which one ...

Spreads and paradoxical liquidity: More from Steve Waldman.

Pain and inequality: "The average pain rating is twice as high for those in households with annual incomes below $30,000 as for those in households with incomes above $100,000."

Tropicana files for bankruptcy: Casinos hurting.

Take-Two's 'Grand Theft' has $500 ...

Landon Thomas has a wonderful piece, full of color, on the spat between Jimmy Cayne and Ace Greenberg. Boy can these multimillionaires get petty:

Told that Mr. Cayne, with whom he worked for four decades, had lost much of his net worth and was suffering personally, Mr. Greenberg's ...

Most of the time I have relatively little sympathy for troubled companies. But sometimes they just seem to run into so many body blows simultaneously that you've just got to wince a little. And ExpressJet is one of those cases.

Yes, ExpressJet is suffering from high oil prices, as all ...

Apologies for the late start today, that normallly shouldn't be a problem for someone six hours ahead of New York. But you've never really understood what tariff barriers are until you've stood in a German customs office for five hours trying to retrieve a parcel you mailed ...

Malcom Gladwell's piece in the latest New Yorker, on Nathan Myhrvold and his company, Intellectual Ventures, is a rollicking good read. But once you've read it, it's worth sobering yourself down a bit with John Gapper. For while Myhrvold and his merry crew of idea merchants ...

Yes, there really is a company called Charming Shoppes, and it's in the middle of a full-blown proxy war right now; it's even managed to delay its annual meeting at the very last second because (ahem) it was having difficulty getting "tabulations in place," according to the ...

Michael de la Merced got a timely interview with BlackRock's Laurence Fink this week, and the resulting story is well worth reading. But one question is not cleared up: what does this mean, exactly, on the subject of the $15 billion of subprime paper that BlackRock is buying ...

I'm enjoying this conversation with Dean Rotbart far too much to stop now, even though I suspect it's of interest only to a handful of my readers. But I'm a blogger! So on I go; you're more than welcome to stop reading now if you have no more interest in ...

So, I don't go to bed worrying about inflation, or that we've been in an especially protracted recession for years and apparently don't know it (an implication of claims you can find out there that CPI and like measures understate "true" inflation by very ...

Yes, there really is a company called Charming Shoppes, and it's in the middle of a full-blown proxy war right now; it's even managed to delay its annual meeting at the very last second because (ahem) it was having difficulty getting "tabulations in place," according to the ...