Felix Salmon

from Barbara Kiviat:

The less you know about finance the better

October 25, 2010

Everywhere you turn these days, some bigwig policymaker is talking about the importance of financial literacy education. Here's Ben Bernanke doing it. And there's Tim Geithner and Arne Duncan. Even the President. It's easy to understand why we feel like we need this, what with all the bad financial decision-making of recent years. The only problem is, there's a fair amount of evidence that a lot of what we do to teach better financial habits, like courses in high school, doesn't work. Some research has shown that financial education is more likely to stick if it's focused on one topic and comes right before a person makes a related decision—learning about mortgages as you're house shopping, say, or getting a lesson in compounding interest along with your credit card.

from Barbara Kiviat:

The real revolution in microfinance

October 22, 2010

People often talk (and write) about how commercialization is changing the nature of microfinance. Yet increasingly it looks like an even more fundamental shift is afoot. Microfinanciers are finally figuring out what their customers want.

from Justin Fox:

Tim Geithner’s poor imitation of John Maynard Keynes

October 22, 2010

Tim Geithner has proposed to his fellow G-20 finance ministers that trade surpluses and deficits be capped at 4% of GDP. The idea is already running into criticism from countries that run big trade surpluses. German Economy Minister Rainer Brüderle warned against "planned economy thinking," according to Reuters, and  "makroökonomische Feinsteuerung und quantitative Zielsetzungen" (macro-economic fine-tuning and quantitative target-setting), according to Reuters Deutschland. "We doubt whether rigid numerical targets should be set," said Japanese Finance Minister Yoshiko Noda.

Can you ethically invest in unethical companies?

By Felix Salmon
October 22, 2010

I first met my friend David Neubert in the context of a website he co-founded, called The Panelist, devoted to “responsible and ethical investment advice”. Dave’s moved on to other things now, but he still has opinions on the ethical-investment front. If you refuse to buy stock in unethical companies, he says, you lose diversification. Instead, Neubert looks to change the behavior of companies he’s invested in:

from Justin Fox:

Tax incentives: Boeing 707 edition

October 21, 2010

I'm going to a book party at a bar in Newton, Mass. tonight (yes, life here in metropolitan Boston is unspeakably glamorous) for Sam Howe Verhovek's Jet Age: The Comet, the 707, and the Race to Shrink the World. It's a great little book—and I don't think the fact that Verhovek's brother is a friend of one my wife's best friends from high school (the reason I was invited to the book party) invalidates my positive opinion. I brought a galley along on a flight West a couple months ago and, despite being alarmed by Verhovek's accounts of exploding jet airplanes, couldn't stop reading. I had finished it by the time I landed in Reno.

When stocks become manipulable

By Felix Salmon
October 21, 2010

Have you ever wondered how big a stock needs to be before it can be efficiently arbitraged? The Fundometry blog has done an investigation along those lines and the answer would seem to be somewhere around $400 million in market cap.

from Barbara Kiviat:

Why do people care so much about the minimum wage?

October 20, 2010

Over at my old Time.com stomping grounds, Adam Cohen has written a fascinating article about the movement to have the federal minimum wage declared unconstitutional. This goes hand-in-hand with the emergence of the minimum wage as a campaign issue in the midterm elections. My question: Why do people care so much?

from Justin Fox:

Some people really need organizations. Like Marty Peretz, for example

October 19, 2010

The Boston Globe has a Local-Boy-Made-Controversial story about Marty Peretz (it was in yesterday's paper, but I just got around to reading it today). There's nothing much new in it, but it got me thinking about the changing division of labor in journalism and how it hasn't worked out equally well for everybody.