Felix Salmon

Unemployment: Strucs vs Cycs

August 25, 2010

Brad DeLong places himself squarely in the camp of the Cycs rather than the Strucs when it comes to Jim Ledbetter’s distinction between economic unemployment theorists. The Cycs think that unemployment is cyclical and will fall as demand grows; the Strucs think it’s structural, and the result of a mismatch between the jobs available and the unemployed workers looking for employment.

Why the housing report presages lower prices

August 24, 2010

Stephen Gandel finds an interesting theory for why home sales plunged so much last month, even as prices remained steady:

Urban traffic datapoint of the day

August 24, 2010

Beijing has a 62-mile traffic jam which is currently moving at one third of a mile per hour, and which is likely to last until mid-September. And that’s not even the really scary bit:

America stops buying homes

August 24, 2010

Earlier this month, talking about a housing market unsupported by Uncle Sam’s billions, I said that “the entire housing-finance business in the U.S. would come to a screeching halt. No one could buy, no one could sell, and home values would be entirely hypothetical.” What I didn’t realize was that we were plunging towards that state of affairs even with the vigorous and active involvement of Fannie Mae and Freddie Mac.

Vine talk: Not all wines get better with age

August 24, 2010

You probably know, or think you know, that fine wine gets better with age. But how do you know that? It is probably not by tasting a large number of fine wines of various vintages.


August 24, 2010

Will IndyMac unnecessarily foreclose on a church? Looks like it — Shame the Banks

Replacing Frannie with a new bond guarantee

August 24, 2010

Donna Borak has found an upcoming paper from Fed economists Wayne Passmore and Diana Hancock proposing a government backstop for asset-backed securities. This sounds very much like Gary Gorton’s paper back in May, which was a very bad idea back then, and is just as bad of an idea now.

China eyes the Black Swan Protection Protocol

August 24, 2010

Jenny Strasburg misses the point of the Black Swan Protection Protocol:

Clients don’t hand over their entire account for the firm directly to manage. Instead, clients designate a certain pool of assets, a notional value, that they seek to hedge, or protect against extreme losses.

Lies, damned lies, and equity mutual fund statistics

August 23, 2010

The lead story in Sunday’s NYT was by Graham Bowley, and it was quite alarming: