Felix Salmon

Teenager-backed bonds — Alphaville

The Problem With Financial Journalism — HuffPo

“Somehow, so far, Apple has gotten away with it, maybe because nobody’s even realized this feature is in there” — NYT

“Vaughn Walker is something special, and the way he has worked this case is simply a work of art” — FDL

Treasuries are risk-free up to 2 years. Bunds are risk-free past 10 years — Alphaville

The UK joining Schengen is a no-brainer, and should have happened years ago. But the Tories’ll never do it — Economist

“The negative TIPS yield is a rational reaction to the lunatic casino that has infested every market in the world” — Self-evident

Beautiful charts: World Population by Latitude/Longitude — Kedrosky

Slater’s tantrum “as the inevitable nadir of a decade-and-a-half-long deterioration in passenger stowage” — Gawker

Gridlock Sam’s great op-ed on the idiocy of NYC bridge tolls — NYDN

Comedy pays better than drama — Yahoo

Six essential questions about the deficit, Wall Street and Washington — Nieman Watchdog

Ryan Avent has a very smart take on the unemployment issue — Economist

Quants: The Alchemists of Wall Street – a good Dutch doc — YouTube

The Economist finds some interesting common ground between Larry Kotlikoff, who thinks that America’s fiscal situation is worse than Greece’s, and Jamie Galbraith, who thinks that it’s really nothing to worry about:

In some ways, these unconventional thinkers resemble each other more than the less striking birds in-between. Neither thinks that official debt figures mean all that much. Neither thinks the government’s balance-sheet can be understood on its own, without reference to what the other spouse is up to.

Messrs Galbraith and Kotlikoff both worry above all about the distributional effects of taxing and spending. Mr Kotlikoff fears that fiscal entitlements allow the elderly to make outsize claims on the young. He denounces “gerontocracy” and “fiscal child abuse”. Mr Galbraith fears that in the name of fiscal restraint, taxpayers will shirk their responsibility to the country’s most vulnerable citizens, who rely on public pensions and health care. For both, then, the chief fiscal danger is inequity not insolvency, as normally understood. The question is not whether the government can pay its bills, but who pays what, when.

I’m inclined to agree with them both, if that’s possible — with the caveat that looking at a lot of historical debt figures, as Reinhart and Rogoff have done, can be helpful (if not very helpful) in terms of working out when countries are likely to run out of fiscal rope.

There’s clearly no urgency to pare back US government finances today, given that the government can borrow for 10 years at just 2.75%, and for 2 years at just 0.55%, and given that the government is still performing an important role as borrower of last resort. On the other hand, if the problems identified by Kotlikoff aren’t considered urgent, they’ll never be addressed.

For the time being, I’m with Galbraith on this one. We’re trying to steer one of the world’s most important economies onto a path of sustainable growth: let’s not get distracted by contentious long-term fiscal arithmetic for the time being.

At some point, when the nation’s interest payments really start to hurt, we’re going to have to start looking at those deficits-as-far-as-the-eye-can-see, and wondering whether addressing them in a structural and strategic manner might be less painful, in the long run, than being forced into drastic measures at an unforeseeable time in the future. But as Kotlikoff and Galbraith would probably agree, the key thing to look at is cashflows between various segments of the population and over time, rather than the simple headline debt or debt-to-GDP figure.

Eli Broad hasn’t given up on his rallying cry, which I first wrote about two years ago:

“If 90% of your work is in storage you need to begin lending it to other institutions. Get art out of the basements,” he said at the conference, which took place in his hometown of Los Angeles at the end of May. He then told The Art Newspaper: “With all the money being spent to store and conserve work, it doesn’t make sense economically or morally not to share it with the largest possible audience.”

Lacma on Fire has a very funny response, explaining that museums have a finite amount of shelf space, but Broad sounds as though he’s running Hilbert’s hotel.

Broad talks as if everything in his 2000-piece collection can and must eventually be on permanent view. The art that’s not in his planned museum will be lent out, notwithstanding the fact that this would require the equivalent of about ten Whitney Museums, sitting empty out in the hinterlands.

The bottom line is that there is more art than museum space to show it. Thus museum installations, particularly of contemporary art, are ever-changing and (to use the fashionable term) “curated.” What’s so bad about that?

This is true, but at the same time I’m sympathetic to Broad’s cause, even in the wake of his rather self-aggrandizing decision to set up his own museum. So where’s the hole in LoF’s argument?

There are two, I think. Firstly, it would be great if museums could carefully curate shows, using the vast quantity of unexhibited work in storage at museums as a glorious resource from which they could pick and choose as they liked. Unfortunately, that’s not how the world works in reality.

In the real world, organizing loans is a huge pain, and museums tend not to do it unless they have to or unless they’re organizing some big blockbuster show. Museum curators at would-be borrowing institutions tend not to be very enthusiastic about navigating the enormous amount of politics and paperwork involved, and administrators at would-be lending institutions are no more excited about trying to put in place all the protections needed for lending out their art. It’s so much easier to just keep it stored in their own basement.

One complicating factor here is the fact that museum funders tend not to give any credit for shows elsewhere which use artworks borrowed from the museum they support. Funders want to see the crowds and the shows at their museums, not someone else’s. And so they have little enthusiasm for using their museum staff’s time to help glorify some other institution. As a result, the system of inter-museum loans is based on all manner of mutual back-scratching, on the idea that the loaner is doing the borrower a favor, which should at some point be repaid.

The sad consequence is a very large number of shows culled only from a single museum’s permanent collection. Such shows are nearly always pretty thin gruel, unless they’re at a one of a handful of super-high-end museums. Smaller museums, in particular, simply don’t have the permanent collections needed to be able to curate great shows.

So having foundations dedicated to lending out art is a really great idea, I think. Such foundations could and should work proactively with museums who might benefit from borrowing their art, and make it as easy as possible for them to do so; the result would be much better shows at small and medium-sized museums around the country.

What’s more, while there might indeed be “more art than museum space to show it”, the situation is slightly different in Broad’s field of very expensive contemporary art, where museums simply can’t afford to acquire works by today’s biggest artists. (Nor might they want to, at these prices, given how uncertain it is that the works will turn out to be particularly important.) At the same time, many museums would love to be able to put on shows of such artists, without necessarily wanting them in their permanent collections. They can get a fair amount of cooperation from the artists’ galleries, but entities like the Broad Foundation would surely make life a lot easier still.

Meanwhile, there’s no harm, and potentially quite a lot of good, when large-scale museum benefactors like Broad encourage museums to start lending out their collections more. Philanthropists with their eye on the health of art museums as a whole, rather than individual institutions, are a good thing. Even when, as in Broad’s case, they retain a certain degree of fallibility and ego.

Social Workout has photos from inside Goldman’s spanking-new 54,000-square-foot gym, but leaves the most interesting factoid in the comments. It turns out that being a Goldman employee might be necessary to gain entrance to the gym, but it’s not sufficient: you also need to cough up a monthly membership fee in order to gain access to those standard-issue Russell Athletic t-shirts and gray shorts. If you’re a managing director or higher, the fee is $132 a month; vice-presidents pay $75 a month; and everybody else pays $51 per month.

I’m wondering what the logic is here — is it a Pigovian tax aimed at minimizing the number of healthy employees? Is it an attempt to stop the unfit from complaining about having to cross-subsidize those who work out? Is 54,000 square feet not enough for the whole company, and the charge an attempt to keep numbers down? Or is it some misguided attempt at saving corporate cash, from a company which spent $2 billion on the shiny new building, including $5 million for a Julie Mehretu mural? All very odd.

David Streitfeld’s NYT piece on home-equity defaults is so aggressively anecdotal, rather than quantitative, that he even says at one point that “the amount of bad home equity loan business during the boom is incalculable”. I really don’t think that’s true: a lot of very smart analysts have done a lot of pretty accurate work on that front. And Streitfeld himself belies the statement by including a pretty illuminating chart with his story.

The key thing in this chart isn’t the drop from 2009 to 2010, which is a function of the fact that the 2010 data covers only the first quarter. Rather, it’s the fact that first mortgages actually account for a minority of home-loan write-offs, and that home equity lines have accounted for significantly more, in the way of write-offs, than second mortgages.

Which brings me to the first of three op-eds that the NYT has published today on the subject of Frannie and the FHA. Here’s Katherine Stone:

Until recently, most Americans paid for their homes through 30-year self-amortizing mortgages, in which interest and principal are paid at the same time. These work well as long as homeowners have stable, long-term jobs that enable them to regularly make their monthly payments.

But these days such careers are increasingly scarce. Therefore, any effort to recover from the crisis must include more flexible mortgages that take today’s employment landscape, with its frequent job-hopping and episodic unemployment, into account.

The problem here is, as a glance at Streitfeld’s chart will show, that “more flexible mortgages” are also more dangerous mortgages. Home equity loans had all the flexibility you could possibly want — and they failed disastrously.

What’s more, Stone doesn’t actually want to get rid of the 30-year fixed-rate mortgage. She just wants to layer gimmicks on top of it: an option to pay only interest if you’re laid off here, an escrow account available in the event of unemployment there. These things don’t really make the mortgage more flexible, they just make it more expensive for the borrower, who has to pay either for the option (which he might not want or need) or else has to pay directly into the escrow account, which would be a sure-fire money loser due to paying an interest rate lower than the rate being charged on the mortgage.

Bill Poole, meanwhile, has a plan which would make mortgage rates rise much further still, assuming that mortgages were available at all:

Fannie and Freddie could not be shuttered immediately; they are too large. A sensible transition plan would have them stop buying new mortgages, and their portfolios would decline as the mortgages they own are paid down. Within 10 years, the portfolios would shrink to insignificance…

In 10 or 15 years, the companies would be gone, closing a chapter in American financial history that enjoyed considerable success but ended very badly and at great taxpayer cost.

The fact is, as John Carney says in his own op-ed (the most sensible, but also the narrowest, of the three), that the FHA and Frannie now back more than 95 percent of new mortgages. If they simply stopped buying new mortgages, the entire housing-finance business in the US would come to a screeching halt. No one could buy, no one could sell, and home values would be entirely hypothetical for years.

Yes, it’s possible to slowly build an entirely private system of mortgage lending. But you can’t do that overnight, as Poole seems to think. And he’s completely wrong, too, when he says that “if the home finance market were fully private, then it would bear the losses from its own mistakes in pricing and insurance”. Not true: when there’s a major housing crash, the government ends up bailing out the lenders whether they’re public or private. Look at Ireland.

So let’s embrace Carney’s idea of forcing lenders to retain 5% of whatever they originate, even when they sell their loans to the FHA or Frannie. And let’s try to get these state-owned behmoths out of the mortgage business in a controlled and non-chaotic manner. But let’s not do anything drastic. The last thing we need is another housing crisis, before the current one has even finished playing out.

Jeff Skilling’s legal fees might reach $150m, while Lehman execs are racking up fees at a rate of $5m/month — NYT

Wells Fargo Must Pay Consumers $203 Million in Overdraft Case — Bloomberg

Today’s Market Action As Predicted By Jim Cramer — ZH (forward to 3:10)

$220 Million London Penthouse Now World’s Most Expensive — Luxist

The endangered terraced verandas of Kashgar — Flickr

Prisoners of Debt: an hour-long documentary on the 1982 debt crisis — NFB

“Hedge funds now account for 20% of trading volume in the Treasury bond market, up from just 3% in 2009″ — FT

“Every sommelier has a pet wine & wishes more guests would drink it. These wines are intentionally well-priced” — Atlantic

Now THIS is how to sell newspapers — Twitpic

“Greek Statistics” makes Schott’s Vocab — NYT

The deterioration in CMBS numbers here prolly says more about MBIA than about CMBS — NYT

Murakami at Versailles — Dezeen

I did my best to ignore the stock market fall today, but it was certainly important enough to grab the attention of Mohamed El-Erian, who has an interesting theory of why it happened:

As Rich Clarida and I recently argued in the FT, sharp risk-on/risk-off swings in markets are to be expected given the reality of today’s macro context.

A couple of weeks, Fed chairman Ben Bernanke called the outlook “unusually uncertain“. We went further, arguing that expectations of outcomes have evolved in an interesting manner – from the more familiar bell curve (a dominant mean and thin tails) to a much flatter distribution with fatter tails. In such an expectation world, short-term news can have a disproportionate impact on market valuations.

Essentially, El-Erian is saying here that the markets have gone from driving a boring family sedan to driving a twitchy, ultra-responsive sports car. And that’s nothing to do with high-frequency algorithmic trading, or anything like that — such things only serve to exacerbate the underlying fundamentals.

Think about it this way: In the 1950s, or even in the 1980s, the range of possible outcomes was (or was perceived to be) pretty narrow. As the macroeconomic situation evolved in a relatively simple and continuous manner, markets evolved to reflect the new realities. Even the bout of high interest rates and inflation in the 1970s was something that equity markets, in particular, could take in their stride — stocks are, after all, one of the world’s better inflation hedges.

Today, however, we live in a much more discontinuous and uncertain world. If stocks are pricing in a 10% chance of a devastating bout of deflation and that perceived probability rises to 20%, the risk-adjusted present value of those stocks can plunge dramatically — much more than 3% — even if everything else remains the same. We don’t really have a model of how the economy works (or doesn’t) — but insofar as we do, it’s one of those models where small changes in initial assumptions can and do result in very large changes to outputs.

As a result, the long-term volatility of equities is going to continue to rise, I think, as it has been rising of late. (Does anybody have a dataset here? I’d love to see a chart of at-the-money implied 10-year or 15-year volatility for the S&P 500, and not just because it has important implications for Warren Buffett’s equity puts.) The implication of that is that the “long run”, in the concept of “stocks rise over the long run”, is going to continue to get longer and longer. It’s clearly not 10 years, any more, or even 15. But how long is it? 35 years? 50? And at what point is that long run so long that it’s of practical purpose to pretty much no one?

One of the interesting things about the fall-out from Mark Hurd’s ouster at HP is that no one is happy with HP’s board. On the one hand, critics like Nell Minow, saying that Hurd “falsified his expense accounts in a tawdry series of incidents”, say the board should have fired Hurd for cause, rather than allowing him to resign. On the other side of the argument, Hurd defenders like James Stewart and Henry Blodget point out that Hurd was cleared of the sexual-harassment charges against him, and didn’t do his own expenses, which makes the claimed violation of HP’s Standards of Business Conduct hard to find.

Both sides, it seems, would agree with Michael Schrage that the board itself bungled the whole affair horribly, largely on the advice of panicked PR advisers at APCO.

And indeed there’s a case to be made that Hurd paid the price, not for his own sins with Jodie Fisher, but for the board’s own prior sins. Here’s Minow:

in order to do any business with the government (including eligibility for certain licenses to do business abroad), companies need to be able to demonstrate that they have “tone at the top” ethics and compliance in place. It says a good deal about our system of corporate governance — and our media and ourselves — that the announcement a few days ago that HP was settling a false claims charge with the government for $50 million did not result in either disciplinary action against the CEO or headlines in the financial press or mainstream media.

When the government investigates companies in these cases, the authorities have to decide whether to prosecute criminally or settle for a civil fine. They also have to decide whether to target the company as a whole or just some lone, unauthorized employee. To make such decisions, the government has said it will look to see whether the top management — starting with the CEO — has sent unambiguous messages that noncompliance will not be tolerated. Has misconduct been punished in the past? Have people been fired for violations? Or does management turn a blind eye for the sake of business expediency? If it’s the latter, the government says the whole company will be penalized…

The HP board has been a serial corporate governance offender, so we should not be surprised that they have bungled this one… This is the board that mis-handled the hiring, direction, and firing of Carly Fiorina and then mis-managed the “pretexting” scandal following the investigation of a leak from the boardroom. This is the board that TCL has rated as high-risk for its inability to manage incentive compensation.

And this is the board which, now, decides to roll out the cool and trendy board member as its official spokesperson, in a failed attempt to make its latest fiasco marginally more palatable to the investing public.

It seems to me that the board’s first duty is to shareholders, and that one look at the HP share price will show that on that front it bungled matters atrociously. I can understand that the board might want to set a zero-tolerance precedent when it comes to CEO shenanigans, especially in the wake of the other recent scandals. I can also understand that it doesn’t want to get into a public fight with the Hurd camp, especially now that the decision has been made and can’t be undone. But it’s hard to see, at this point, why shareholders should have any faith at all in the HP board. Marc Andreessen is a good guy, but while he’s searching for a new CEO, maybe he should search for a new chairman at the same time. Who ideally won’t be the same person, and who will be able to bring a bit more credibility to a tattered board.

Financial services companies can take advantage of the cognitively weak in general, and the elderly in particular — especially elderly people suffering from Alzheimer’s disease. More generally, people who want to be in full control of their finances today might well want to put in place protections which remove them from full control of their finances in future, if they know that they’re going to get Alzheimer’s.

So now that a test looks likely which will predict with high accuracy whether you’re going to get Alzheimer’s or not, will we find people lining up to find out if they’re going to get the disease, and creating structures for other people to take control of their funds before symptoms appear? It seems reasonable to me. And will we find hedge fund managers, especially once they get to be a certain age, publicly releasing the results of their spinal-tap tests?

This is all very murky, in bioethical terms, but in financial terms it’s crystal clear: no investor wants someone with Alzheimer’s running their money, and few of us even want to be control of our own money once we come down with the disease. Whether that’s enough to make us find out whether we’re going to get it, of course, is another question entirely.

Paul Krugman notes today that 5-year TIPS are trading with a negative real yield, which prompted me — with the help of the great Frank Tantillo — to navigate the Fed’s data download program to generate this. (Bigger version here.)

Both 5-year and 10-year TIPS yields are trading at or near their all-time lows right now (the chart only goes up to the close of business yesterday, and yields have fallen again today).

I’m a bit stumped, however, on what exactly this means. The last time that TIPS yields dropped below zero, the cited reason was “investor speculation that inflation will quicken as the U.S. economy slows”. But that doesn’t seem to be the case right now, with the 5-year Treasury at 1.44% and the 10-year at 2.71%.

So what’s going on? Scott Grannis has his own ideas, which don’t bode well for the medium-term future of the economy as a whole:

You can think of real yields on 5-yr TIPS as a good proxy for the market’s expectation for real GDP growth, mainly because there should be some reasonable connection between the risk-free real yield an investor can earn on TIPS over the next 5 years and the real yield on cash flows tied to the economy’s performance via generic equity exposure. For example, if expectations for economic growth were healthy (e.g., 4-5% real GDP for the next several years), then an investor would be foolish to put his money in 5-yr TIPS that promised a zero real return. Cheerfully buying 5-yr TIPS with a guaranteed real yield of zero only makes sense if one has very grave doubts about whether the economy can generate any real growth at all in the coming years.

I don’t think that the TIPS market is pricing in zero real GDP growth over the next 5 years. But I do think it reflects worries over stock-market valuations. A stock-market investor only gets exposure to the economy’s performance via investing in equities if p/e ratios don’t fall, after all, and I can easily imagine a scenario where the economy grows modestly, or enters a shallow recession, while stocks fall significantly.

So my feeling is that this is the “there’s nothing else to buy” trade: a desperate lunge for safety in a world where everything else — including stocks and property — looks decidedly risky. Although with yields this low, even these long-dated TIPS stand to drop quite a lot in value if they revert to their mean yields.

SoBi, short for social bicycles, is a gutsy startup trying to make bike-sharing more accessible by reducing the up-front infrastructure costs. Don’t create dedicated parking spaces: allow bikes to be parked anywhere. Don’t commission custom bicycles: design a gizmo which attaches easily to any bike instead. And store information in the cloud, allowing what I think is the smartest new idea of all: rather than paying contractors to move hundreds of bicycles every night from where they’re not wanted to where they are wanted, simply pay the bike riders themselves a bonus of a buck or two if they leave the bike in an area where they’re in high demand.

But I still don’t think this’ll work, and not just because SoBi was silly enough to demonstrate their first real-life prototype on a fixed-gear bike with no rear brake. Something less suitable for sharing can hardly be imagined. People come in a large range of shapes and sizes, and need to be able to adjust their bikes easily when they find them: that’s easier said than done. Standardized bikes also make repairs a great deal easier and cheaper: being able to install this system on any old bike is not much of an advantage, really. And more generally, it’s pretty hard to find suitable bike parking if your only option for locking the bike is to find a rack which you can attach the bike to from one position over the real wheel.

The big problem, however, is in the ongoing costs of running the system — finding broken bikes, repairing those bikes, maintaining the information infrastructure, etc etc. Where bike sharing exists already, in cities like Paris, Munich, and now London, it’s institutionalized with a lot of corporate sponsorship and advertising: a very large chunk of money in those cities, for instance, has come from JCDecaux, Deutsche Bahn, and Barclays, respectively. Big corporations like that want standardization and predictability and on-message branding: they don’t want to be associated with users locking their bikes illegally to any old railing or pole, irritating merchants and pedestrians.

Bike sharing is something best done city-wide, at large expense, by a big corporation risking its reputation to at least some extent, with a lot of public money and support as well. Small local schemes are likely to start with great enthusiasm and then run out of steam or money pretty quickly, no matter how clever they seem. I look forward to a big public scheme paying its users for returning bikes to high-demand areas. But beyond that I’m not very optimistic about SoBi.

Update: SoBi’s founder, Ryan Rzepecki, responds in the comments:

1. We have no intention of launching a SoBi system using fixed gear bicycles. That pic is of a foam model attached to our industrial designer’s bike with a clothes hanger. It wasn’t meant to be representative of the actual bike or mount.

2. We intend to launch city-wide systems with government support and major sponsorship. This isn’t a peer-to-peer or grass-roots solution. I think sponsors will particularly appreciate the ability to connect to users with opt-in real-time promotions and advertising.

3. We are developing advanced fleet management tools for tracking not only the position of the bikes, but their repair schedule and other information to help system administrators.

4. Users must lock to approved racks – parking that is illegal or offensive will be flagged and the most recent user can be held accountable.

5. The idea is not to create a mismatched fleet of old beater bikes, but to allow each city to choose a bike that is right for their needs given the local conditions and budget.

6. Yes, suitable bike parking is a problem in most American cities. By choosing the SoBi system, a city can expand parking opportunities for all cyclists by installing new racks. These racks benefit not only bike share bikes, but private bikes as well.

Paul Graham, one of the visionaries of the Internet’s early years, has a decidedly dystopian view of its future, and that of society itself:

Increasing numbers of things we like will be transformed into things we like too much… At the extreme end of the spectrum are crack and meth… Checkers and solitaire have been replaced by World of Warcraft and FarmVille. TV has become much more engaging, and even so it can’t compete with Facebook…

The world is more addictive than it was 40 years ago… and it will get more addictive in the next 40 years than it did in the last 40…

You can probably take it as a rule of thumb from now on that if people don’t think you’re weird, you’re living badly… we’ll be increasingly unable to rely on customs to protect us… It will actually become a reasonable strategy (or a more reasonable strategy) to suspect everything new…

I’ve avoided most addictions, but the Internet got me because it became addictive while I was using it. Most people I know have problems with Internet addiction.

I think this is exactly wrong. For one thing, it’s trite and far too easy to blithely compare “Internet addiction” (whatever that might be) to real physical addictions like those to heroin or cocaine. Graham would surely consider me an Internet addict, but I can testify from the past two weeks, when I went on a largely off-the-grid vacation, that the withdrawal symptoms don’t last for more than 24 hours. After that, going offline is easy, and lots of fun, and any necessary email checking feels like a chore: it triggers no rush of immediate pleasure.

And I’m far from convinced that the rate of adoption of highly-addictive things is increasing. Graham mentions that cigarette use is down; he doesn’t mention that crack cocaine use is down too. He does suggest that “the recent resurgence of evangelical Christianity in the U.S. is partly a reaction to drugs” — but I doubt it would be possible to find any correlation at all between the rise of evangelical Christianity and the prevalence of addictive drugs in those communities. And even television is, I think, much less addictive than it used to be: when I do watch it, I generally want to turn it off, rather than keep it on.

What’s more, the Internet is in many ways anti-addictive: there’s always something else, something better, to move on to. It’s not some monolithic entity to which one can become addicted; it’s a vast range of sites and usages which wax and wane in our days. Google replaces Yahoo, Facebook replaces MySpace, Twitter replaces RSS, and ever onwards. It’s a great tool for living life fully — especially for young people in, say, small evangelical communities, who find friends and peers they could never have been in touch with pre-Internet.

“Addiction” is a term which gets bandied about far too loosely. I daresay that Graham is right that when he wants to think deeply about one specific thing, it’s good for him to take a long hike rather than sit in front of his Internet-connected computer. But that doesn’t mean he’s addicted to the Internet, it just means that the Internet isn’t particularly conducive to helping people think deeply about one specific thing. (On the other hand, it’s excellent at helping people make connections between ostensibly different things.)

And for all of Graham’s anecdotes, he provides no quantitative data backing up his claim that the world is becoming increasingly addictive, at an accelerating rate. I suspect what we’re seeing here is much closer to curmudgeonliness than it is to accurate diagnosis. And that Tyler Cowen is right: the Internet, even at the margin, is something to be embraced, rather than something to be feared, suspected, and best avoided.

(via Jelveh)

Every point the VIX 10-yr implied volatility rises, Berkshire Hathaway loses another $280 million — Clavell

Meet the Prankster Brothers Behind “Jenny”, the Whiteboard-Using, Farmville-Exposing HPOA Girl — Kafka

“The theory of relativity is a mathematical system that allows no exceptions. It is heavily promoted by liberals” — TPM

Ted Olson vs Chris Wallace — YouTube

Cameraphones make you ugly — OK Cupid

The beer popsicle — Urban Daddy

Airfares are now the highest they have been since the start of 2008 — NYT

Broke Britannia! The Musical — Broke Brittania

Liquid pencil — Sharpie

Add water to your wine — NYT

The Riedel wine glass which holds over 1 liter of wine — Wine Enthusiast

In Basel, Eternal Work In Progress — NYT

David Leonhardt’s latest column is full of interesting employment datapoints. Among them:

• In 2008, only 13.2% of the labor force was unemployed at some point. That compares to 18.1% in 1980, and 22% in 1982.
• Real wages, which normally fall during recessions, have risen in this one. Even nominal wages are up.
• The mancession is over: “male employment has risen by almost one million this year, while female employment has fallen by 300,000″.

The overriding impression is of most Americans actually doing OK, with an unemployable underclass bearing the brunt of the recession. Maybe we really are all middle class now: there’s the unemployed at the bottom of the pile, and the plutocratic elite at the top, with the overwhelming majority sitting in between, doing OK but hardly great.

The problem is that persistent unemployment at or around 10% is unacceptable in the U.S., especially with the social safety net being much weaker here than it is in Europe. Leonhardt is right that Euro-style safety nets aren’t particularly innovative, but they do at least keep people housed and clothed and fed and living outside poverty — reasonable expectations for anybody to have, I think, in the richest country in the world. If David Leonhardt can’t think of any bright ideas for solving the persistent-unemployment problem, then the chances are such solutions aren’t going to magically appear. Which means we need to help the long-term unemployed, rather than simply ignore and forget about them.

I’m very excited that San Francisco has finally launched its new SFpark system. And I love their video introduction to it:

The only thing I have to complain about here is that the parking-meter pricing isn’t nearly as dynamic as I’d like: rates can only change once per month, and never by more than 50 cents. I’d love to see rates change much more dynamically than that, especially on big days where some kind of special event means much higher parking demand than usual.

But the central idea is brilliant, and should be adopted everywhere: reduce traffic congestion by pricing parking according to demand — including pricing garages lower than street parking — so that there’s nearly always at least one free parking space on every block. No more crawling around interminably looking for a spot! Congestion should drop immediately, since a huge proportion of city traffic is people looking for somewhere to park.

The proof of the pudding, of course, will come now that the SFpark system is up and running: I hope that the city planners have been taking detailed congestion and vehicle-speed measurements, so that they can quantify exactly how those things change in the wake of SFpark’s introduction. It’ll take a little while for the rates to stabilize at the right levels, of course, so don’t expect immediate results. But come back in a year’s time, and I’d love to see some numbers on how and whether this scheme works.