Author Archives: Felix

Explaining the Absence of Grocery Stores in Poor Neighborhoods

Nathan Berg, of the Center for Urban Economics, has noticed that there are many fewer grocery stores in poor urban neighborhoods than economic theory would suggest. The public-health implications of eating mainly processed food are pretty nasty, to say nothing … Continue reading

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Virtual Deflation

Can you think of an economy where the money supply is increasing but consumer prices are falling dramatically? Eyjólfur Guðmundsson can: it’s called EVE Online. Over the course of the third quarter of 2007 – which is equivalent to about … Continue reading

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Pointless Shareholder Activism, Pardus Edition

The problem with airline mergers is not that people think they’re a bad idea. Not at all: pretty much every airline-industry executive in America thinks that consolidation in the industry is inevitable and a great idea in theory. But the … Continue reading

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The Resurgence of Sculpture

With the sale last night of his "Hanging Heart (Magenta/Gold)" for $23.6 million, Jeff Koons is now the priciest living artist at auction. Now it’s entirely possible that someone will decide to go the auction-house route rather than the private-dealer … Continue reading

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UBS: Waiting for the CDO Shoe to Drop

UBS had over $24 billion in gross CDO exposure at the end of October – much more than any other bank bar Citi. Yet its writedowns to date amount to just $3.1 billion, or 13% of that exposure. By contrast, … Continue reading

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The Limitations of TradeSports

Last week, I wrote about the TradeSports contract on whether Alex Rodriguez would stay at the Yankees. It might be "a screaming buy," I said, but warned that it was very illiquid. So what has happened to the contract now … Continue reading

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The Goldman Sachs Special Sauce

What’s the difference between Goldman Sachs and all the other investment banks? You know, aside from that whole profitability thing. The answer seems to be that where other banks have org charts, Goldman has managers. It’s unthinkable that Goldman would … Continue reading

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Extra Credit, Thursday Edition

Why homeownership may be bad for America The Real Cost of Smoking: "Every pack of cigarettes that an adult male smokes knocks off $222 from the value of that man’s life." Why I Need CNBC: Ken Houghton discovers that CNBC … Continue reading

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The Best Subprime Reporting and Analysis, Cont.

Tanta’s on fire today. First came this, in re a court case in Ohio, where she suspected that Deutsche Bank had gotten sloppy with some paperwork: When Wall Street analysts stand up and demand that companies beef up back rooms, … Continue reading

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Why Advertisers Won’t Desert a Free WSJ.com

In the wake of the latest news about WSJ.com going free, the old arguments against such a move have been emerging from people who think they’re smarter than Rupert Murdoch. They’re not. The main argument is summed up by Barry … Continue reading

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Labor vs Capital in Baseball

Is A-Rod seeking an "insane" amount of money? Not necessarily: In 2001, the first year of the first Rodriguez mega-contract, major-league players were getting 56% of their sport’s $3.5 billion in revenues. Yet this year, Jeff Passan notes on Yahoo … Continue reading

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The John Thain FAQ

Many questions accompany John Thain’s appointment as CEO of Merrill Lynch. Here are just some of them: Will Thain be chairman, too? Almost certainly, yes. Whither BlackRock’s Larry Fink, now he’s been passed over for the job as Merrill CEO? … Continue reading

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Auto Industry Chart of the Day

If the Harvard faculty is remotely representative of anything, then Detroit is doomed. Interestingly, Greg Mankiw’s BMW 330xi gets about 17 MPG, in the city, and emits 9.2 tons of greenhouse-gas emissions per year. Does he not believe that his … Continue reading

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Unsecured Personal Debt: The Next Shoe to Drop?

HSBC has been one of the biggest subprime lenders in the US ever since it bought Household International for $15.5 billion in 2003. It was one of the first major banks to take big subprime-related losses, too, and it doesn’t … Continue reading

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The Fed Gets Its Inflation Target

In the Fed’s latest move towards greater transparency, we will now see three-year forecasts for both core and headline inflation four times a year. Greg Ip notes that this is an inflation target in all but name: The projection for … Continue reading

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Retail Quote of the Day

Joe Wiesenthal reads the WSJ: How about this quote from a retail industry trade group VP: "We don’t anticipate a lot of unplanned markdowns."

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Richard Prince Datapoint of the Day

October 16, London: At Christie’s, the heat was still on for the fashionable Canadian conceptual artist Richard Prince, whose painting Wayward Nurse, bought originally in 2005 from his New York gallery for $75,000, sold for £1 million ($2.1 million). November … Continue reading

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Why Newspapers Should Ignore Stock-Market Volatility

I get very irritated when newspapers splash one-day stock-market movements all over their front page for no good reason. Every time the Dow drops 300 points or more, it seems, there’s some kind of rule saying that big panicky headlines … Continue reading

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Extra Credit, Wednesday Edition

Crooked Timber’s Dani Rodrik seminar. Featuring Thoma, Quiggin, Farrell, Warsh, Knight, Przeworski, Drezner, Davies, and a response from Rodrik. Truly the econoblogosphere is becoming the best economics education money can’t buy. Plus ça change: Amsterdam’s 17th-Century stock market. Kevin Rose … Continue reading

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Wall Street: Still Insanely Profitable

Bloomberg is running a story headlined "A $45 Billion Writedown Won’t Stop Wall Street Profit", saying that Wall Street is poised to have its second-most-profitable year on record, despite those $45 billion in writedowns: Amid the gloom, analysts estimate New … Continue reading

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The Carbon Tax Debate: Why a Cap-and-Trade System is Better

I spent more three hours this morning at a debate hosted by the New York City Bar Association which was narrowly focused on a single issue: whether the US government should implement a carbon tax or whether it should go … Continue reading

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Blackstone vs Goldman, Subprime Edition

November 12: Blackstone President and Chief Operating Officer Hamilton James said on Monday Blackstone is starting to "go long" the subprime market, after a successful bet against the sector that played out over the last 18 months. November 13: Goldman … Continue reading

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Murdoch’s WSJ.com Ambitions

Does Rupert Murdoch think he can double or even treble the number of visitors to WSJ.com if when he makes the site free? Don’t be silly. He’s much more ambitious than that: Rupert Murdoch, the chairman of the News Corporation, … Continue reading

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The Economics of Concert Performances

Last night I went to a truly magnificent show at Carnegie Hall: Sir Simon Rattle conducting the Simón Bolívar Youth Orchestra of Venezuela in Shostakovich’s 10th Symphony. My front-row seats were $44 each. This evening, Sir Simon returns, conducting the … Continue reading

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The Economics of Broken Deadlines

Why were the second and third Matrix films shot at the same time? Why are TV series shot all at once? Simple: economies of scale. You can shoot all your scenes at a given location at the same time, rather … Continue reading

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