3.26.10 Remaining Irrational and Insolvent

Some light reading for your weekend:

Why a Liberal Arts education can best prepare business leaders. via BizDeans Talk. also, 56% of you are cheating. For Shame.

FIVE BOYS: THE STORY OF A PICTURE. The Economist's Intelligent Life magazine. All about this image:



Africa’s Gift to Silicon Valley: How to Track a Crisis. NYTimes. On the revolution occurring in information because of widespread 3rd world cell phone use.

Gary Gorton Vs. Michael Lewis. Falkenblog. Reviews and comparisons of Lewis's and Gorton's new books on the great Crisis of 09.

Crisis is the Normal State. Crooked Timber. A list of modern financial crises. Oh, you don't know what Penn Central in 1970 is? Neither did I: here is a great paper on the Penn Central Crisis, the Fed Discount Window, and a model of what crises look like. I should also mention that Penn Central was the largest corporate default on commercial paper until, I believe, Lehman Brothers. Lehman Brother's default cause the oldest money market fund to break the buck, which caused a run on money market funds. Interesting to observe how crises spread through different instruments, but in much the same way.

Odds are, its wrong. A critique of statistics in science.

During the past century, though, a mutant form of math has deflected science’s heart from the modes of calculation that had long served so faithfully. Science was seduced by statistics, the math rooted in the same principles that guarantee profits for Las Vegas casinos. Supposedly, the proper use of statistics makes relying on scientific results a safe bet. But in practice, widespread misuse of statistical methods makes science more like a crapshoot.

Would you like some information on default rates of corporations? Of course you would. Moodys.

10 most active VC firms of 2010. PEHub

The case for the fat startup. All Things Digital. a link from A VC.

and now, some pallet cleansers:

The Myth of Fernet. SFWeekely. San Francisco's favorite apertif, a profile.

The Angostura Bitters Shortage calls for creativity. When I was in my favorite LA bar during spring break, I overheard the bartender and a manager talking about the nationwide shortage of Angostura bitters. An article on why.

and into this week in econo papers:

Interest Rates and the Housing Bubble. Brad DeLong.

Measuring the Impact of Health Insurance on Levels and Trends in Inequality. NBER

Which Parts of Globalization Matter for Catch-up Growth? NBER

How Do Firm Financial Conditions Affect Product Quality and Pricing? SSRN

Manufacturing Tail Risk: A Perspective on the Financial Crisis of 2007-09. SSRN

Economists' Hubris - The Case of Risk Management. SSRN

Have a good weekend.