Felix Salmon

Institutions exit the muni market

Jenn Ablan takes a look at the muni market today, and although inflows have been strong this year, the smart money seems to be moving out of the market, positioning itself for a gruesome second half of the year.

Are basketball economics broken?

Amy Shipley has an odd piece today on the economics of signing basketball stars. I know absolutely nothing about basketball, but I do know that Shipley’s story doesn’t convince me that the NBA is suffering the “economic woes” of her headline because “a broken economic system” has resulted in teams spending too much money on players.

Zirp and the double dip

Greg Ip has an interesting argument: if we were really headed for a recession, he says, the yield curve would be inverted. But you can’t have an inverted yield curve when the Fed sets short rates at zero. Therefore, we won’t have a double dip.


Tal Yarkoni on Dunning-Kruger; he goes on to debate Dunning in the comments — Yarkoni

Why do we invest in cap-weighted indices?

Felix Goltz and Véronique Le Sourd have an interesting paper (PDF) revisiting the question of why so many of us invest in capitalization-weighted stock indices. It turns out that the theory behind our behavior is pretty weak: first of all, you have to believe in the capital asset pricing model, or CAPM. The CAPM includes lots of assumptions which don’t hold in the real world: that all investors have the same risk appetite, for instance; that they all have the same investment horizon; that they can short securities freely; that they pay no taxes or transaction costs; and that all assets can easily be traded, including assets such as human capital and real estate.

Why munis don’t pose a systemic risk

David Goldman has reacted with a curious mixture of alarm and reassurance to Dakin Campbell’s story about U.S. bank holdings of municipal debt:

Time’s weird web strategy

Josh Tyrangiel became arguably the most sought-after editor of his generation by boosting Time.com’s pageviews from 400 million to 1.8 billion within three years, and by successfully transforming a bunch of grizzled old magazine journalists into web-speed multimedia content producers:

Can America improve its bad jobs?

The problem of falling wages for people without a high-school diploma is well presented by Richard Florida, in an op-ed headlined “America needs to make its bad jobs better”:

Income inequality chart of the day


Catherine Rampell features this chart today, showing how wage inequality has increased over the past 30 years, especially for men. But in fact what we’re seeing here understates how bad things have been for most men over the past generation. If you go to the source, this chart only shows data for people working full time. And, at least when it comes to men, that’s much less common now than it was in 1979.