By Daniel Costello

So here I am looking to buy a car at the end of this month and what do I come across? Very informative news-I-can-use that the best day of the year to buy a car is just around the corner.

It seems the research shows the best car deals happen the day after Thanksgiving. I would rather run a marathon in the Arctic than go to a mall on Black Friday, but word is the crowds aren't that bad at the dealerships that day.

You'll know where to find me.

By Daniel Costello

Yes, elementary economics shows that market prices are set when supply equals demand. But businesses know there is gold in getting individual customers to pay higher than average prices for things they cherish more than others. Think about airlines: few people on the same flight pay the same fare. Airline profits rely on the fact.

New research by two economics professors at the University of Pennsylvania found that Apple's oft-praised 99 cent per song business model may not be optimizing the tech giant's profits.

The professors started by asking 500 Wharton students to listen to the 50 most popular songs on iTunes that month and then asking what each student was willing to pay for a song - essentially building a demand curve for online music from scratch.

Continue reading "Why Apple Could Charge More For iTunes" >

By Daniel Costello

Here's some good holiday news: a drop in sales of high end wines this year and a weak secondary market for American grapes, known as the Napa spot market, means some of the best 2009 wines could sell for as little as $20 a bottle, many in time for Christmas.

Continue reading "2009 Wines: More Taste, Less Money" >

By Daniel Costello

Ever lost your wallet and wonder what's the chance you'll get it back? The answer may depend on where you live.

According to a recent nationwide poll from Gallup, how much we trust our neighbors varies greatly across states. Utah and South Dakota residents are the most likely to express trust in those who live nearby -- with 85% in these states saying they would expect a neighbor who found a lost wallet or purse containing $200 to return it. Residents of Nevada and Mississippi are the least likely to express such trust, at 60% and 61%, respectively. In all states, a majority of residents would expect a lost purse or wallet to be returned.

The bottom line: 70% of Americans express trust in their neighbors but trust varies greatly across regions. A number of Western and Midwestern states, along with states with smaller populations, top the list of high-trust places, whereas Southern and highly populated states are more prevalent on the low-trust list.

Also interesting is that trust and well being may be linked. Scores by state reveal evidence of a link between social trust and well-being. States in which high percentages of respondents said "yes" to the wallet question also tend to have higher levels of overall well-being.

By David Kestenbaum

Alex called me over to his desk this morning, pointed to an economic paper he'd pulled up on the computer and asked, "Can you translate this?"

"Abstract: We consider economies and diseconomies of scope for large U.S. banks by employing ordinary and hybrid translog cost functions. We examine the regularity conditions in output space where scope estimates are calculated and reject all models for which these conditions fail. The translog model always possesses violations. For the hybrid translog, violations occur in every case except one. In this one case, we find economies of scope."

I can't. Can you? Post your answers in the comment section. We'll put the winner on an upcoming podcast.

Here's the full paper.

By Caitlin Kenney

Matthew Rose over at the Wall Street Journal has a great financial edition of the "Devil's Dictionary." Here are a few of my favorites:

BANK, BAD, n. 1. Everyone else. 2. Especially Goldman Sachs.

GREEN SHOOTS, n. 1. The first signs of spring, often clobbered by summer's heat and autumn's rain. 2. A sign the economy is falling apart more slowly than previously thought. Related: DAISIES, PUSHING UP. See also THINKING, WISHFUL.

STRESS TEST, n. 1. A measure of arterial blood flow to the head. 2. Alchemic process by which struggling, undercapitalized banks are transformed into paragons of modern finance. (See BANKS, GOOD.) Also known as the "Timothy F. Geithner Seal of Approval," which some bankers insist is good until it isn't anymore. (See BANKS, BAD.)

Anyone care to take a stab at definitions for capital injection, leverage or mark-to-market?

By David Kestenbaum

I had the happy experience of visiting traffic court this week. The judge opened with a bit of comedy, asking:

"I'm guessing most of you are here so you won't get points on your license?"

"Yes," said the people in the courtroom.

"I CAN'T HEAR YOU!" the judge said.

"YES!" the people shouted, and then started laughing.

The judge went on to say that this was the "people's court" and explained that if she gave probation on a ticket, no points would appear and the insurance companies wouldn't find out. "This court is not in the business of enriching the insurance companies," she said.

Clearly the idea was that if the insurance companies find out, they'll charge you higher premiums and make more money.

But I don't see why that would necessarily make them more money.

Continue reading "My Traffic Court Judge Is Not An Economist" >

By David Kestenbaum

When you're out at dinner with friends, should you divide the bill up evenly?

Economist Russ Roberts at George Mason University says you should think twice about that because in a shared situation, everyone ends up ordering more.

Russ says you should also think twice about earmarks and taxes. He tied all that together in this essay "If You're Paying, I'll Have Top Sirloin" which I just read for the first time and got me thinking about the perils of health insurance.

I e-mailed Russ to ask if he practiced what he preached.

Continue reading "At Restaurants, Don't Split The Bill" >

Take my mechanic's word for it: It's all good now. (Enlarge -- anyone heard of anti-rattle clips?)

By David Kestenbaum

We talked on the podcast about how economists sometimes compare doctors to auto mechanics, because in both cases you, the customer, suffer from a lack of information. If the doctor says you have Takotsubo cardiomyopathy, you:

a) have no idea what that is, and
b) say, "Fix it!"

The same goes with the auto mechanic. My wife and I just took our car in because it was making a rattling sound. The bill we got Friday says simply, "FOUND ANTI RATTLE CLIPS OUT OF PLACE." Cost: $82.

Really? The rattle was because our anti-rattle clips were broken? We trust these guys and paid the bill. But I always have this helpless feeling of not knowing.

An ad for how to get rich in ISK, the currency of EVE Online.

By Laura Conaway

Bank failure is getting a dry run in the multiplayer online game EVE.

In recent weeks, EVE's largest player-controlled bank has hit the skids after one player embezzled and sold for real the InterStellarKredits -- ISK -- that are the coin of the imaginary realm. That caused a run on the bank. Then came an admission from Ebanks's CEO of bad management, followed by a string of loan defaults. Now the bank has frozen customer accounts. Ars Technica has the rest:

The main problem with Ebank's account freezing is that it could do some serious harm to the game's economy, mainly because players won't be able to withdraw their funds in order to pay for in-game goods and services.

Listener Brian Saar, who sends the story, calls it "a virtual laboratory for what happens without the FDIC."

Jen Firlik, who sent those amazing photos of a dress marked down from $28,000, got this receipt at Starbucks the other day:

Shared planet? No charge for that.

Craig Newmark, the picture of contentment. (Chip Somodevilla / Getty Images)

Defenders of the free market, in my mind, have always had a little explaining to do when it comes to things like computer software. Where is my minimalist option?? I want the version without all the stupid features that slow everything down. (Long liveXyWrite!)

Maybe times are changing. David Pogue writes in the New York Times today that Apple's new operating system, called Snow Leopard, is admirably streamlined.

It's the radical concept of a software update that's smaller, faster and better -- instead of bigger, slower and more bloated. May the rest of the industry take the hint.

Meanwhile, Wired this month goes after a related idea, "Why Craigslist Is Such A Mess." Craigslist's bare-bones approach has some obvious problems. It's so stripped of bells and whistles that you can scarcely find your way through it. So why hasn't a competitor stepped in and stolen all the business? Gary Wolf writes:

The Internet's great promise is to make the world's information universally accessible and useful. So how come when you arrive at the most popular dating site in the US you find a stream of anonymous come-ons intermixed with insults, ads for prostitutes, naked pictures, and obvious scams? In a design straight from the earliest days of the Web, miscellaneous posts compete for attention on page after page of blue links, undifferentiated by tags or ratings or even usernames. Millions of people apparently believe that love awaits here, but it is well hidden. Is this really the best we can do?

Why doesn't Craigslist feel the need to improve? Wolf says the answer starts with its founder, Craig Newmark:

Continue reading "Onward! (And Backward!) The Weird Economics Of Craigslist" >

A storeroom containing about 2000 wheels of Parmesan cheese in Parma, Italy. (cosmos_72 / Flickr)

By Mathew Katz

Twitter pal @snorerot13 sends this delicious economics story from the Guardian. Gianni Zonin, an Italian bank chairman and wine producer, is proposing that banks accept expensive wines and legs of prosciutto as collateral on loans to producers. The quintessentially Italian notion even has the support of Luca Zaia, the Italian agriculture minister. Here's a bit:

"We've done it with cheese, why not with prosciutto and good wines like Brunello di Montalcino and chianti classico?" said Gianni Zonin, chairman of the Banca Popolare di Vicenza and head of wine producer Zonin.

The Italian bank Credito Emiliano has long stored hundreds of thousands of parmesan wheels, worth about 300 euros each, in warehouses as collateral while they age.

Since the bank can sell the cheese if creditors default, it can afford to offer low interest rates to an industry which is suffering from recession and supermarket discounting.

That's the sort of financial innovation I can get behind. Though that might only be because I've always wanted to walk into a massive bank vault filled with cheese, wine and ham.

In Hour we trust. (Shira Golding / Flickr/Creative Commons)

By Mathew Katz

How's this for financial innovation? A group of artists in North Brooklyn is trying to develop a local Brooklyn currency -- the Brooklyn Torch -- that's meant to encourage locals to spend within the community, and boost local pride.

Turns out, local currencies are not only legal, they already exist in places like Madison, Wisc. and Ithaca, NY. Since we no longer back up money with the gold, notes only have to be declared to be money by an authority. The U.S. dollar is backed by the U.S. government, and the Ithaca Hour is backed up by the Circulation Committee of Ithaca HOURS, Inc.

Continue reading "Brooklyn Artists Propose Local Currency " >

It's all in fun until someone makes a million dollars. (Second Life)

By Laura Conaway

I don't know how I missed this key, crucial and totally critical piece of news: The economy in Second Life has grown by 94 percent over the past 12 months, with activity that equates to $144 million in the second quarter.

Granted, the real people and their groovy avatars in the 3D virtual reality world are trading in Linden dollars, except when they're not, like the woman who made a million U.S. dollars selling virtual real estate. Beam me up, I guess. Oh, wait -- wrong world.

Bonus: Is Second Life having a recession?

It makes you feel better. (Screen saver by Geliosoft.com)

By David Kestenbaum

You may have caught our story this morning about a curious experiment showing that if you count dollar bills then put your hand in hot water, the hot water is likely to feel less hot than if you had just counted blank paper. It doesn't even have to be your cash. Just being reminded of money makes things hurt less. That's the idea, anyway.

One of the scientists, Kathleen Vohs, published another surprising paper a few years ago with two colleagues. If I can summarize the findings non-scientifically it would be like this: money can turn people into selfish jerks.

In one experiment, they had students play games of Monopoly. At some point the game was stopped and cleared away except for a certain amount of money. In some cases, $200, in others $4,000. Then, as a test, the researchers had someone walk into the room and spill some pencils as if by accident. Result? The students who had been left with more money helped pick up fewer pencils.

"Even though gathering pencils was an action that all participants could perform, participants reminded of financial wealth were unhelpful," they write in the paper.

And it was just play money! The weirdness continues...

Continue reading "Money And The Brain: More Weirdness" >

While you're at it, imagine world peace. (Graph by Alyson Hurt of NPR. Math by listener Samuel Rutledge.)

By Laura Conaway

People often ask what's it like to sift through lousy economic news all day -- you know, the kind that makes you think -1 percent growth in the economy means things are looking up.

Confronting rising unemployment numbers and stagnating wage reports feels about like you'd expect. It's fascinating, and challenging, and very, very sad. Some days I want to write an open letter to the economy: "Dear Recession, You've made your point. Now please go away."

On Thursday, I posted what feels to me like a positive development. The numbers are clouded, but bear with me: The four-week moving average of new claims for unemployment benefits is going down. It might well go up again -- we're seeing lots of little peaks and valleys -- but overall, it's falling.

And just for fun, totally for fun and relief, I wanted to see how long it would have to keep falling this way before we get back to normal. Economists say a healthy range for new claims each week is something like 300,000 to 350,000 -- call it 325,000, for the sake of argument. There's absolutely no predicting whether the current pace of claims will continue; it could easily start falling faster or slower. This is an arbitrary exercise, asterisk, asterisk, asterisk. And even if new claims keep falling at the average of the last three months, there's no guarantee that companies will start hiring so the people already laid-off can get new jobs. Unemployment could keep rising, just as predicted.

Continue reading "Chart Therapy: 'Normal' Job Loss Resumes April 24, 2010***" >

Court papers say $97,000 fit in here. (Roadsidepictures/Flickr/Creative Commons)

By Robert Smith

The characters in the Sopranos aren't the only criminals who love their food and colorful slang. Court documents in last month's big New Jersey corruption bust reveal that the rabbis charged with money laundering have their own dramatic flair. The court papers say an informant was taping all his meetings, and the results read like a Kosher version of Goodfellas.

Bank fraud is repeatedly referred to as a "schnookie" in the charges, which makes it adorable. And since five of the accused are rabbis, they know their way around the ancient codes. "Gemara" may be the second part of the Talmud, but the court papers say that for these guys it also meant a thousand dollars. "I'm bringing 55 gemaras," the informant says, meaning $55,000. The accused would allegedly set up times to meet by asking when they wanted to "learn together."

But apparently the rabbis were more hungry for food than for knowledge. Prosecutors say these portly gentlemen would meet in chocolate shops, bakeries, grocery stores. According to official charges, when they went for the laundered money, they would say they were going to "pick up the potatoes." The cash came bundled in cereal boxes, the charges say: $97,000 in Apple Jacks, $118,000 in Cinnabon Crunch.

By Laura Conaway

Emily Oster loves a good riddle. The Chicago Booth School of Business professor is part of a growing wave of economists using the dismal science to explain some of life's most stubborn mysteries, including ones that might not seem to have much to do with economics.

In the TED talk above, for example, she applies a cost-benefit analysis to the question of why African men have been slow to change their sexual behavior in the AIDS epidemic.

Now Oster's coming to Planet Money. We're talking to her on Friday for what we hope will be the first in a series of conversations.

Send us your riddles, whether they're explicitly economic or not. Wondering why post offices don't add more self-serve machines? Or why restaurants give you so much free bread but charge for each extra vegetable? This is your chance to get answers.

We'll ask Oster to field a few of your conundrums and present the results in an upcoming podcast.

E-mail us, tweet us, Facebook us, or hit the comments below, please. This'll be fun.

By Laura Conaway

File under "obvious," I think:

Americans Resigned to Retiring Later, but Unwilling to Sacrifice Current Lifestyle

That's from an ING Direct survey of 10 countries, including 1,052 people in the U.S. ING says 29 percent of Americans report the recession is tanking their romantic relationships, compared to 12 percent of Germans and 23 percent of Canadians. Asked which three things they'd give up last to save money, Americans say they'll cling to their pets and their vehicles -- at 22 percent and 30 percent, respectively, rates that outpace every other country in the survey.

There's a country music song in there, somewhere.

Continue reading "Like A Country Music Song: What Stays, What Goes In A Recession" >

Adam Davidson and Chana Joffe-Walt gear up for the competition. David Kestenbaum/NPR

 

Welcome to the second half of Planet Money's utterly amazing, absolutely cut-throat, winner-take-all, first-but-probably-not-last-ever Economic Radio Story Competition.

A couple of weeks ago, we sent Planet Money reporters Adam Davidson, Chana Joffe-Walt and David Kestenbaum to New York's Fancy Food Show with a (very) special challenge: Bring back all the sound you'll need for the best economics story you can find, in an hour.

We're calling on you, the listeners, to pick a winner. After the jump, you'll find each story and the poll. If you're looking for a voter's guide, check the comments from the original Planet Money podcast.

Voting closes on Thursday at midnight Eastern. We'll announce the results on Friday's podcast.

Continue reading "Vote: Our Economic Radio Story Competition Needs You" >

My Climate is Better Than Yours. From "Principles of Human Geography", 1922

 

This morning we aired a story about new research by economists at MIT indicating that poor countries take a hit to their GDP in years where the average temperature is higher than normal.

The results are surprising in part because this is an idea that seemed too simple to be true. It dates back hundreds of years as a possible explanation for why hot countries tend to be poorer than those in cooler climates.

Above is an excerpt from the 1922 book "Principles of Human Geography" which I don't think would hold up to modern scientific standards. It's kind of a grand-unified-theory of how climate dictates everything.

"In an invigorating climate it is also easier to be honest and sober and self-controlled than in a more enervating one."

Continue reading "Does Hot Weather Hurt The Economy?" >

Near Times Square: the man on the right is standing on the bike symbol. adrimcm//CC BY-NC-ND 2.0

 

One cyclist I know calls them "zombies" -- people on foot who wander out into bike lanes and tread along, ignoring perfectly good sidewalks and clogging the works for cyclists. Like most people who live in cities, I'm a pedestrian, too, so I do have some sympathy for them. But I'm also a daily bike commuter. As I ride back and forth from Planet Money headquarters, I've begun wondering about the economics of my problem.

Twitter pal @meghan_e suggests that once a single pedestrian wanders over into the bike lane, it opens a "new market" and the others follow.

@JasonInNJ takes another approach. He suggests it's an example of the Tragedy of the Commons, a phenomenon described by Garrett Hardin in which individuals acting in their best interest ruin a shared resource.

In either case, I'm still wondering about a fix for this.

It's in Cambria County, Pa. Coneslayer/Planet Money Flickr pool

 

Flickr pal Coneslayer sends this picture from Frugality, Pa. It's the kind of place that you look up on Google maps, then have to zoom out a couple of times before any nearby towns appear -- which means, for the most, there aren't any.

I just like Frugality for the name.

I put the exclamation points there because, OK, it sounds dull. Bonds, you think, are dull. International Monetary Funds, probably more so.

But this is one of those stories that brushes up against the profound.

The news: The International Monetary Fund has decided to issue what could be $70 billion dollars worth of bonds. It's the first time the IMF has raised money through bonds. The fund has been short of cash to lend out because of the financial crisis.

The interesting bit: The bonds are denominated in a kind of synthetic currency called Special Drawing Rights (SDRs). SDRs are used internally at the IMF as units of account. But China has proposed turning them into a new kind of global currency that could one day replace the dollar's central role.

Continue reading "IMF Bonds (!!!!)" >

I got this email yesterday and worried I might be being set-up for some Borat movie.

Dear Editor in Chief

As an actor who has played the role of Mustafa Kemal Ataturk in 6 Films in Turkey, I would like to make an interview with your newspaper by e-mail

Information about myself is given below.

Sincerely yours

Yavuz HEKYM
President
GROUP OF EGEKONS
Egekons Prefabricated-Metal Building Industry & Trade Ltd.Co.
actory & Main Office
Ankara Asfalty 40.Km Armutlu Kavpaoy 35170 Kemalpapa Yzmir
www.egekons.com

Our email exchange follows:

Continue reading "An Unusual Request" >

Even after he scammed millions from investors, some people still heart Conrad Black. gordasm/flickr

 

Bernie Madoff, who was sentenced to 150 years in prison yesterday, may be the mastermind behind America's biggest Ponzi scheme, but he's certainly not the only person to run a scam for millions of dollars. Financial corruption has been around as long as people have been making money. And some of the corrupt have had some pretty quirky personalities.

Continue reading "Flamboyant Financial Felons" >

tizianoj/flickr

 

It turns out Senator Johnny Isakson stepped into a very well studied, but complicated area of scientific measurement when he attempted to explain a trillion dollars.

Isakson tried to covert a trillion seconds into years, months and days.

It turns out no one can tell you how many days in the future a trillion seconds would put you. And it's not even like, 'we're not sure it's a Thursday or a Tuesday'. We don't even know what month it would be.

I called up Tom O'Brian, chief of the Time and Frequency Division at the National Institute of Standards and Technology (NIST) who works on super-precise atomic clocks.

He says there are just too many uncertainties. Among other things tidal forces with the moon are slowing down the earth's rotation. (Many years from now, he says, the moon will sit fixed above one spot on earh.)

You can listen to our conversation:

Or download it here.

Continue reading "A Trillion Seconds" >

We took a righteous stab this morning at explaining the basics of how a cap-and-trade program like the one being considered in congress might be used to limit global warming and carbon emissions. Or, say, limit the use of the word dude.

Internally, there was much debate here about what movie clip to use. Our producer Jacob Ganz emailed : "Dude, you can totally tax a turtle."

Our editor Uri Berliner remembered the Bud Light ads (video above, other ads here and here.)

Continue reading "Where's My Carbon Credit, Dude?" >

Honk if you get it. Marzia Niccolai writes:

I recently bought the foreign service exam study guide since I am taking the test this Friday. The test consists of, among other things, basic economics questions. I was so amused by one of the sample questions that I just had to share:

All of the following are examples of United States products that would typically fail to be produced to optimal output without government intervention EXCEPT:

A. national defense products.
B. light provided by lighthouses.
C. new automobiles.
D. new highways.

And in the answer section:

Continue reading "Question Fail" >

Winner: The newly refinanced Noel Paterson. Race to Refinance

 

UPDATE: We have a winner. What timing, huh?

Every so often, someone comes along and pulls off a project that amazes you. Eric Sipple, also known as @saalon, a certifiable Web genius, built the Planet Money Listener Race to Refinance. Check it out in brief after the jump and in all its glory at Sipple's site. (For the intrepid few, note the possibility of joining in.)

Continue reading "Amazing: Race To Refinance" >

I have to say, a lot of those fancy info-graphic data-visualization techniques, designed to make numbers and statistics easier to absorb, often just leave me confused.

The video above from the folks at gapminder.org is an exception.

I love how Rosling has to narrate the graph as it's changing, like he's a baseball play-by-play announcer. (And I love his accent.)

You can play with the graph here.

Continue reading "Video: '200 Years That Changed The World'" >

NPR's Wright Bryan sends this, from the Financial Times:

"How would you like to spend more time with your family -- like the next five years?" is not the kind of offer employees usually want to hear from their bosses in the depths of an economic crisis.

But BBVA, Spain's second-biggest bank, has posed that question to staff as part of its latest cost-cutting drive. It is hoping at least some of its 29,954 Spanish employees agree not to come to work for up to five years -- in exchange for nearly a third of their usual salary and a guaranteed job when they return.

Admittedly, most of us couldn't make it on a third of our salaries alone. But if you're anything like me, you're thinking, hey, with five semi-free years I could...

What would you do? Just asking.

It's early yet, but odds for Press Release of the Day are on this one, from the University of Central Florida:

In his national quarterly forecast released this morning, Sean Snaith says the pace of the economic downturn and anticipated recovery looks like the slanted handle, bowl bottom and prolonged spout of a traditional sauce serving dish.

"It has that shape," says Snaith, director of UCF's Institute for Economic Competitiveness, poking fun at the more typical descriptions of recession shapes and graphs.

"Forget the V-shape or other letters that economists talk about when they describe the economy," he adds. "This will be a 'gravy boat recession' with a steady and gradual recovery. After touching bottom in the third quarter of 2009, we'll see GDP slowly climb like a gravy boat's spout."

One thing consumers worldwide can agree on: beer. kern.justin

 

As the companies that we once believed to be bedrocks of the American economy go into bankruptcy, there's an industry that's actually seeing continued growth in this economy: beer. Since the recession hit, Americans are drinking more of it.

Reuters reports that MillerCoors, the second-largest brewer in the U.S., predicts the American beer market will continue to grow, albeit by a smaller amount than in previous years. The brewer expects to see a 0.6 percent growth in 2009-2012, down slightly from the 0.9 percent growth the industry saw in 2004-2008.

This comes as a new report says beer sales are up 5.6 percent this year, especially among craft beers and discount brews.

Continue reading "There's Always Beer" >

Instant folk art.

 

Word has it that a Chinese company is buying the gigantaloid Hummer brand from GM, which is getting bought by Uncle Sam.

After the jump, the story behind that monster thing in the photo.

Continue reading "Monster Trucks, Now And Then" >

"Slow Inevitable Death of American Muscle," in video at Opposition Art

 

Chrysler's on its way out of bankruptcy. GM's on its way in. This seems as good a Friday afternoon as any for video of a super-slow-motion car crash with no passengers. Opposition Art's got it.

(Thanks to listener Chris Hoge.)

This slideshow requires version 8 or higher of the Adobe Flash Player. Get the latest Flash Player.

TEXT.

Last week, we issued our Recession Haiku challenge, and you responded with vigor -- on the blog, on Twitter, on Facebook (x2), over e-mail. At this rate, we'll get to our millionth Recession Haiku by the time the economy turns around.

We gathered a dozen of our favorites for the gallery above. My personal honorable mention is after the jump.

Continue reading "Our Favorite Recession Haiku" >

They make you feel better. Steve Rhodes/Planet Money Flickr pool

 

Counting cash can make you feel better, at least according to this new study. In one experiment, the researchers had students count either money or paper, then plunged their fingers into hot water.

The students who had counted money felt less pain.

"Handling money . . . reduced distress over social exclusion and diminished the physical pain of immersion in hot water."

Apparently it doesn't even have to be your money.

Continue reading "In Pain? Count Cash" >

(Update: For a medley of Recession Haiku, check out Friday's podcast.)

This is making the rounds among modern Greek PhDs at the University of Michigan (my poet friend says so). It's an interview of sorts with Stephen Ziliak, an economics professor who believes "an economics without poetry is an economics that is blind." What poet doesn't like to hear that? Ziliak is a big fan of haiku because it's an efficient form where economy of words is valued. He assigns haiku challenges for bonus points on exams and holds haiku workshops as part of a course on rhetoric in economics.

We're assigning you a challenge: Write a haiku for the recession and drop it in the comments. It's 17 syllables, in three lines, with a pattern of five syllables, seven syllables, and five more.

After the jump, the interview with Ziliak -- in haiku.

Continue reading "Challenge: Recession Haiku" >

Mornings with NPR

 

Remember Mandy Dalton, the clown who was having trouble getting paid by bankrupt mall owner General Growth Properties? The blog Mornings with NPR turned our story about her into a cartoon.

Picture this: You're on the road and heading to a comfy, homey destination where there will be plenty of good food. You stop to get gas. You're hungry. Those Fritos look really delicious. You look in your pocket and all you have is a $50 bill. Do you buy the Fritos?

OK, now picture this: Same scenario, but when you look in your pocket you've got a $5 bill. Or how about this: Your pocket is full of change!

I've got a story today on All Things Considered that some of you may recognize from the podcast about what's called the Denomination Effect. It's research by Priya Raghubir and Joydeep Srivastava published in the Journal of Consumer Research (sub required) that shows people are much more willing to spend the same sum of money if they had smaller denominations instead of one large bill. In other words you would totally buy those Fritos with a pocket full of change. You may go for it with your five. But there is no way you are breaking a $50 for a stupid bag of Fritos.

Like the Mexican folk saying that opens their paper: You should take care of small, loose bills, because large bills take care of themselves.

Continue reading "Large Bills Take Care of Themselves" >

From Fail BLog

 

Sometimes Fail Blog just lights up your life.

PM editor Uri Berliner sends along this indecipherable business alert.

REUTERS SUMMIT-BATS EXCHANGE CEO SAYS POSSIBLE NEW OPTIONS MODEL WOULD BE MAKER-TAKER

Anyone know what this means?

Mother Nature used to look like this.This lady, progenitor of the Heat and Snow Miser follows the standard depiction of Mother Nature as a sylvan, earthy, vaguely counter-culture figure. Her clothes were loose and flowing, like a stream or breeze. Advertisers who used Mother Nature (she's a fair use ICON!) stuck to this basic script. Like this lady, who warns margarine users not to mess with Mother Nature, could have been outfitted from the same trunk as a summer stock production of Hair.

But look at how Mother Nature is showing up these days -- dressed in a sharp business suit.

-- Mike Pesca

Continue reading "What Happened To Mother Nature? " >

"Is is possible we have too many choices in America?" @not_yet

 

Twitter pal @not_yet wins the prize for economy caption of the week.

Our pal Dan Pashman shot this video on Thursday in Manhattan. Pashman writes:

On my way to work, I came across a long line. A really long line. A line that would make Walt Disney jealous. There's an unemployment office near my office, and a few months ago there was a pretty long line there for a job fair. So I figured this was probably for another job fair.

I was wrong. The line was for a Jimmy Choo sample sale.

Continue reading "Freak Out: Jimmy Choo Sale" >

Check the paneling, y'all. Jalopnik.

 

We're talking Chrysler on the podcast today, and along the way we stopped to remember the K Car.

Go ahead and raise your hand if you remember the last great model for saving the company. The K Car, we'll just tell you now, has its own fan club. Of course.

Flying the Mongolian Flag in Hakodate Bay, Japan. Click to enlarge. Photo by Joe Jones via Flickr

 

One of the things that was so surprising about the hijacking of the Maersk Alabama was that it was an American flagged ship. Pirates rarely hijack ships registered in the US and that is intentional. They prefer not to face off with Navy Seals. Also, shipping companies often don't register in the US. The taxes are too high and the regulation too strict.

Shipping companies, just like pirates, prefer to exist in a world of little regulation. They register their ships in countries like Liberia, Panama and the Bahamas that offer lax regulation and lower taxes. If you fly the Bahamian flag (even if you're a Danish company with a Russian crew) you follow Bahamian labor laws, inspection rules and pay Bahamian taxes. That is how ships wind up flying the Mongolian flag - a country that has no coastline!

Continue reading "It's All About The Flag " >

We've been talking a lot about mark-to-market accounting lately -- the rule that gives banks and businesses leeway in estimating future profits and taking credit for them right away.

Now comes this musical message for the Financial Accounting Standards Board by country singer Merle Hazard (a.k.a. Jon Shayne).

Lyrics, etc., after the jump.

Continue reading "Mark-To-Market, Country Style" >

Our podcast yesterday talked about how hard it was to get a handle on the really large numbers. Lawmakers have to deal with these things all the times, a million dollar line in the budget, billion dollar bank bailouts, a trillion dollar federal deficit.

Sometimes government has to deal with long timescales too. In fact there is one regulation that would extend a million years into the future.

(In that story we take a time machine back one million years. And I have to say, before I did the story I wasn't quite sure what would be there.)

Doing math for the podcast on my tray-table Chana Joffe-Walt

 

The Toxic Asset Relief Program was $700 billion. The AIG execs are grabbing $165 million in bonuses. The Fed plans to inject $1.2 trillion into the financial system.

Come on, be honest now, do you really know what these numbers mean? Nothing in our regular lives is measured in millions or billions, and certainly not in trillions. These numbers are so huge and they all rhyme. Today on the podcast we're going to follow the advice of a neuroscientist friend who says we need to measure impossibly large numbers against something we know.

The Internet has already figured that one out. Perhaps you'd like to think about a trillion in terms of tomatoes? Or grocery bags and palettes, or doormats, and pennies.

Quick: What's the name for a real-life get together of Twitter users (or, tweeters?) who meet up to tweet? A tweet-up!

Tech-savvy business leaders are beginning to see the benefits of Twitter. So NASDAQ invited social media strategist and author David Meerman Scott -- and 30 of his Twitter friends -- to tweet-up at the market.

We were there, and yes, we're on Twitter.

Sweet, marshmallowy revenge, as imagined by Heather Kelly, Scott Fay and Michael Mavretic. WashingtonPost.com

 

Worth the ad: the Washington Post's Peeps Diorama contest. My heart's with the Madoff scene above. You can still vote in the people's choice poll.

Stewf Flickr

 

There's definitely no shortage of bad news these days, and it seems many Americans are finding solace in something both escapist and inexpensive: love.

U.S. News and World Report cites romance novel publishers and condom makers in its top 10 list of "winners in the recession," citing the robust sales figures for each.

Harlequin -- the leading publisher of series romance -- says its year-over-year sales of titles like Naked Attraction and Mistletoe Cinderella grew at the end of 2008, even as total U.S. book sales declined.

Continue reading "Finding An Escape In Romance?" >

Found in my inbox this morning, an updated analyst's note:

Apologies -- due to an errant spell-checking, "euro-ization" became "euro inaction" and "dollarization" became "polarization." Attached is the corrected version.

Give me two hotels and put 'em on my bill. girlonbike/Planet Money Flickr pool

 

Don't let the duck run the bank.

I don't know how educational this, but I'm sure my kid will like it. The video follows housing prices, adjusted for inflation, through 2007. The latest figures show existing home values falling by 19 percent in the last year.

(Thanks, @sdvet)

 

We got the following email from our big boss here at NPR, Ellen Weiss.

Sent: Thursday, March 26, 2009 7:53 AM

To: PlanetMoney

Subject: Here's my question for you today

Systemic Risk Regulator? Who the heck will that be and would you love or hate having that on your business card?

The treasury department today outlined what it wants to see as the new "rules of the road", financial regulations to make sure we don't drive into a ditch again. The wish list includes a very powerful Systemic Risk Regulator whose job it is to somehow understand the interconnectedness of all things.

I made Ellen the business card above. We welcome your submissions. Whose name should be on it? What slogan? What logo?

Seen in the window of a fashion store in Germany. Maren Schmohl /Planet Money Facebook group

 

Bianco Footwear offers a suggestion on how to deal with the global financial crisis -- ignore it.

Forget about an increase in divorce when the economy sours, in Japan marriage is on the rise. Bloomberg reports:

Women the Japanese call "marriage-hunters" are looking to tie the knot as companies from Toyota Motor Corp. to Sony Corp. fire thousands of workers and the nation heads for its biggest annual economic contraction since 1945. Marriages surged to a five-year high of 731,000 in 2008 as wages stagnated and the unemployment rate rose for the first time in six years.

"Financial concerns are a major reason for the increase in marriage-hunting," said Toshihiro Nagahama, chief economist at Dai-Ichi Life Research Institute in Tokyo. "Women are motivated more than ever to find a financially sound partner."

Continue reading "The Credit Crunch Bride" >

PM contributor Chana Joffe-Walt pointed us to this contest, sponsored by the National Foundation for Credit Counseling. School kids across the country come up with a poster to illustrate the phrase "I'm Going To Be A Millionaire Because I..." It's kind of like a local talent contest version of the weird Feed The Pig ads where people hand money over to a porcine fellow dressed in a pink seersucker suit.

Most of the posters are pretty straightforward -- laying out a plan that might plausibly lead to financial success somewhere down the line. But we like this one best, and would like to encourage the idea that puns are the surest route to riches.

Cashing it in. Avery Cook

 

John from Kansas City, Mo. sends this great little puzzler:

For fun, I was playing with an electronic 20 questions game (20Q) and decided to try and use "economy" as the target for the poor little gizmo to guess. It had no idea of my philosophical bent and I tried to cut it a few breaks. As a 'thing', vegetable and mineral don't qualify. Animal ? It has a life of sorts. Does it have legs? Does it stand on two legs? Does it have a tail? Perhaps this could serve as a creative whack to one's head, to get one thinking along a different line...

Paul Detrick/Planet Money Facebook group

 

No comment.

www.xkcd.com

 

My friend Owen (inspired by the above comic) started poking around on the simple english version of Wikipedia for various economic terms.

It's like the Wikipedia you know and love, except that all the definitions are supposed to only use the most common 1,000 words in the English language. It's intended for people around the world who are just learning the language. But it has the happy side effect of eliminating all that awful economic jargon.

Owen particularly liked the entry on money, which begins:

"Besides being easier to carry than cows, using money had many other advantages. Money is easier to divide than many trade goods. If someone own cows, and wants to trade for only "half a cow's worth" of wheat, he probably does not want to cut his cow in half. But if he sells his cow for money, and buys wheat with money, he can get exactly the amount he wants."

He laments there is no entry for collateralized debt obligation. Anyone want to take a whack at it?

Click to let les bons temps roulez. Barbara Baldwin/Planet Money Flickr group

 

Listener Barbara Baldwin of New Orleans went down to the parades this Mardi Gras, and bumped right into the economy. Click to share her curbside view.

In case you missed it, CNBC's Rick Santelli went off about Obama's new plan to help homeowners on the floor of Chicago Board of Trade yesterday. The clip makes a guest appearance on today's podcast, but you can watch it in full above.

Hopeful sign? engineer27 via Planet Money Flickr pool

 

Twitter pal @engineer27 sends this snapshot from Boca Raton for your Friday lift.

BTW, I'm still tinkering with the idea of a story about the quits rate. One element missing for me has to do with the fear of leaving one job to take another -- say you have an opportunity at another company, but you're afraid the new place will be more likely to lay you off. So you stay put. That's also part of the quits rate, or the decline in it.

The Crisis of Credit Visualized from Jonathan Jarvis on Vimeo.

A lot of our listeners wanted to share this video with us, including its designer Jonathan Jarvis. He writes:

I wanted to send you this animation I just posted explaining the subprime crisis simply and in a way (that I think) is good-looking and fun to watch. I am sending it to you because listening to your podcasts and the This American Life episodes in no small way inspired and helped me along the way.

Thanks Jonathan! My favorite part -- the depiction of a subprime mortgage (it's at about 7:30).

Still confused by who is who on Wall Street? The cast and crew of CB Fresh have an answer, especially for those of you spent the early '90s developing carpal tunnel syndrome and poor eyesight playing video games for hours on end.

Packed with cartoon violence and toting a warning label for children, it's Wall Street Fighter 4. Watch your favorite investment banks and rating agencies throw "Sonic Bloombergs" at each other as they battle for market dominance.

(Hat tip to the blog Wall Street Fighter, which notes, "Do we have a copyright case against these dudes? Nevermind, this is the awesomest thing I've seen about Wall St. in months!")

I took a little break from the super-serious job of analyzing the troubled efforts to bring relief to troubled assets. I went to a movie. The International, starring Clive Owen and Naomi Watts, opens today. It's a thriller about an evil bank that controls the world.

It's crap.

It's well shot and paced and the acting's good. But the story truly makes no sense at all. I had a piece on Morning Edition this morning about it.

I got upset--absurdly, ridiculously--because a big Hollywood blockbuster has a faulty business model for banking.

Then I got REALLY upset.

Continue reading "Bad Movie About A Very Bad Bank" >

Data from the Bureau of Labor Statistics.

Alan Cordova/NPR

 

Today, the Bureau of Labor Statistics announced that productivity in the non-farm business sector rose by 3.2% in the fourth quarter of 2008. Sounds like good news? Maybe not.

The reason, as the BLS explains it, is that the total number of hours worked fell faster than the total economic output. Something economist Howard Rosen warned us about when we talked to him about furloughs on the podcast. The above chart is based on BLS data that tracks indices for productivity and compensation (all were 100 in 1992).

Here are a couple of links for your spare time, which may have unexpectedly increased recently:

For map geeks, ProPublica has created a Google Map of the TARP recipients, with a bar graph indicating the amount of funding located at each company's headquarters. Don't bother scrolling around -- as far as we know none of the money has landed in Saudi Arabia or Papua New Guinea!

For history buffs, the New York Times asked three economists to describe the federal government's response to five recessions in the past fifty years.

Finally, for those with a fast Internet connection, I've been playing around recently with economic data on Many Eyes, IBM's visualization engine. Check out a map of negative home equity. I'd love to post reader-generated visualizations -- if you come up with one, drop me an e-mail.

Alan asks:

What's so bad about protectionism? As part of the infrastructure spending, the "Buy American" requirement has been added to steel purchases. Since I'm Canadian, this is bad! But beyond that, I've heard from lots of sources that this was a big problem during the depression. Does it just turn into a game where everyone puts up barriers? Could you delve into this further and see if we are starting to see the problem show up this time around?

Alan has pretty much hit the nail on the head. The steel industry got what it wanted in the stimulus bill.

Continue reading "Why 'Buy American'?" >

Blue dots are monthly. The black line is the quarterly average.

Alan Cordova/NPR

 

Today, the Bureau of Economic Analysis released the latest data on personal income and spending. Consumer spending decreased for the sixth in seventh months, which worries economists because it represents approximately 70 percent of economic activity. However, there was one potentially bright spot in the generally grim picture.

Continue reading "Chart: A Savings Rebound?" >

Adam Davidson is warming up for his live chat with Simon Johnson and Arnold Kling -- and you. The conversation's about whether the U.S. should nationalize the banks. It starts at noon Eastern. Join in!

Via Freakonomics and Bo Cowgill, we have a trend that may or may not shock you: the number of Google searches for "coupon" has exceeded the number of searches for "Britney Spears," a sign, according to Justin Wolfers, that we are most certainly in a recession.

Since we aired Chana Joffe-Walt's report on naming the mess we're in, you folks have thrown out many terrific nominations. I took the liberty of picking the ones I liked best and putting them into an online poll.

Now it's time to vote. The poll's open until Friday, Jan. 30, at 11:30 a.m. Eastern. We'll announce the results on that day's podcast.

In November, Ryan Stotland of the Astroturf checked in with "A Central Banker's Dilemma." Now he's back, with "Financial Crisis Revisited." Ryan says he originally called it "Financial Crisis 2008 Revisited," but that's so last year -- and the crisis, of course, is so right now.

If all this talk over quantitative easing and split-strike conversions has left you with a headache, surf on over to the Bailout Game for minutes of mindless fun. Let the ax fall on your favorite investment banks, automakers and government-sponsored entities and watch the carnage unfold! (Thanks, Clusterstock!)

Click to enlarge.

Paul Kedrosky/InfectiousGreed

 

Paul Kedrosky made this great tag cloud of the papers presented at this year's American Economic Association Conference in San Francisco. Kedrosky notes that the name "Keynes" does not appear in any paper or session at AEA, neither do gold or Federal Reserve.

We have a lot of conversations on Planet Money -- on the podcast, over e-mail, by phone, out in the streets and in our studios. And, of course, we yak a lot on Twitter.

People who follow our feed send us links and questions and general good humor. It's a fun crowd, and if you're not already part of it, we'd like you to pedal over. Hey, it's free! (For those of you who are new to Twitter, you might find it helpful to think of it as part cocktail party, part microblog.)

Several Twitter folks have expressed an interest in meeting in each other, which for now means signing up for each other's updates. We invite you to post your Twitter names in the comments and to follow the people you see posting there. If you like, add a sentence or two introducing yourself. Let's see where we can take this.

We wanted to lay out a strange puzzle for you on today's podcast, then answer it tomorrow. But we forgot to mention it. So here it is:

Where is all the U.S. currency?

According to the Federal Reserve the total amount of U.S. currency out there is about $900 billion. We're talking real currency, dollar bills, $100's, $20's etc.

That works out to about $3,000 per person. Ok now open your wallet, how much do you have? Not a lot, right? So where is all the cash?

Don't look it up on the internet, that's no fun. Just think about it. We'll have the answer on Morning Edition and a longer extended-dance-remix on the podcast for Friday.

According to prosecutors alleged ponzi schemer Bernard Madoff mailed jewelry and other expensive items to family members as Chanukah gifts, violating the terms of his bail agreement. As New York Times writer Alex Berenson describes it:

Sixteen watches, including diamond-encrusted timepieces from Tiffany and Cartier. Four diamond brooches. Two sets of cuff links. An emerald ring. These are a few of Bernard L. Madoff's favorite things.

It sounds like a bold move. But Madoff's lawyer argued that a lot of the items were no more than $25 cuff links and $200 mittens.

$200 mittens? Really?

Continue reading "In Search of $200 Mittens" >

Adam is going to be talking on All Things Considered tonight about how hard it is to measure something as seemingly simple as the unemployment rate.

You get a sense for things when you look at one of the surveys the labor department uses. Here's one of many questions it asks:

Continue reading "The Dog Ate My Job" >

Click for bigger image.

Ben Hatke

 

Ben Hatke, an illustrator, sent this over today. He first posted it back in October, with the idea that fashion might become a silver lining. Me, I'm holding out for a Great Recession t-shirt.

We all have resolutions for the New Year, but here at Planet Money we want your predictions.

Pick any "economic indicator" -- the price of milk, GDP, unemployment, the stock market, the store that closed on the corner, whatever -- and give us your forecast where it will stand one year from now.

We'll follow up as 2010 dawns and build a podcast or radio story around it.

Stick 'em in the comments section below.

Winner Takes All

 

If you're looking for a party game to play tonight, Kevin Kallaugher, who used to be the political cartoonist for the Baltimore Sun newspaper (back when newspapers had budgets for such things), has crafted one for our times.

"Our board game pits players against each other and encourages them to pick on the weakest, kick opponents when they are down and generally manifest all the characteristics that bring success in the financial world."

It's in the holiday edition of The Economist, but if you cancelled your subscription in these hard times, it's free here.

Portfolio has assembled its list of the year's top business blunders. The list includes the likely suspects: Societe Generale, Jerry Yang, and Bernie Madoff. Along with a few I'd just plain forgotten about. My personal favorite -- the executives from the big three automakers taking private jets to Washington to ask for a bailout. David Kestenbaum asked David Cole, from the Center of Automotive Research, about this decision back in November, his rationale -- security.

Earlier this month, Columbia Business School held its semiannual Follies show. Amid jokes about MBA life and the school itself was the latest music video, "Total Collapse of the Street."

Cities and states around are facing tight budgets as tax revenues drop. Maryland is looking at a $400 million shortfall, for instance.

And this isn't going to fix things, but the Baltimore Sun (my wife actually) reports that revenue from parking meters have risen 54% over the last four years, to $7 million. And that, the city says, is without raising rates. How?

New electronic meters. People tend to pay for more time than they need. And the days of pulling up and finding leftover time on the clock are gone.

Of course not everyone is happy about that. And one guy in the story found a way to save himself some money.

Cleans up nicely.

Getty Images

 

'Tis the season to be buying. Retailers are slashing prices in the hopes that consumers will open their wallets, and analysts are saying now is the time to snap up stocks that have been unfairly hurt by investors' fears of the overall equity markets.

For the museum that has everything, the item of the year might be a space shuttle. Endeavor, Atlantis and Discovery are scheduled to be decommissioned by 2010, and NASA is looking to send them into the comfortable retirement that the prototype shuttle Enterprise currently enjoys. (Thanks Fast Company!)

Love this.

LOLFed

 

The latest timesink at Planet Money is LOLFed. Applying the grammar and vocabulary of LOLCats to the follies of modern finance (especially those of the Federal Reserve), it provides a rather postmodern reflection on our current state of affairs. If the jokes don't make sense because of the LOLCat terminology, get help here; if it's because of the names and faces, you're in the right place.

Seen in Berkeley, Calif.

Michel Im

 

Michel Im took this picture while out shopping in the East Bay this weekend. The Geithner reference, of course, is to Timothy Geithner, who's up for Treasury secretary.

Add Ray Davies to the list of people who say they had a hunch about the financial crisis. The Kinks leader tells the New York Daily News:

"I'm not saying I saw it coming. But I had felt we might be on the cusp of something for quite some time."

I like the Kinks as much as anyone, but I'm thinking this maybe files best under Broken Watches Still Right Twice a Day.

He bought a pair of earrings and a necklace for his wife.

How do I know this? I was taking a break from economics, shopping at a "Holiday Art Mart" organized by these guys, when I ran into Gayla Lee.

Continue reading "What Bernanke Did This Weekend" >

Philip Maymin has a big idea: That the speed of pop music mirrors the volatility of the stock market. Make:Blog's got the graphic read on what might be a tough academic paper. (But go get it and report back, please.)

(With thanks to the good folks -- and cool kids -- over at Radio Sweethearts.)

Courtesy of Twitter listener @elizs, jokes for the economic downturn (OK, recession).

I'm realizing our monopoly game segment on yesterday's podcast didn't really go far enough.

Check out Jon Methven's essay in McSweeney's, The Economic Crisis Hits the Markson Family Monopoly Board:

"I believe our major issue was the housing crisis, which began with your properties on Ventnor Avenue and Marvin Gardens. But in order to put that in context it's important that we first discuss the children's inflationary habits. I realize Bethany is only 6, and you find it cute that she writes "$5,000" in crayon on the backs of the Chance and Community Chest cards when she runs out of funds and uses them to purchase houses, but, if you recall, that is exactly what led to the inflation that crippled our Friday fun."

Bonus: A listener mods his own Monopoly board.

With thanks to Twitter listeners @olevia and @marilynm, McSweeney's guide to anti-anxiety meds for the economic downturn.

Me, I'm sticking with "Defaulta." But you can take 10 mgs of "Nojoblin" and call me in the morning.

Got this today from Robert Benincasa, NPR's new data guru:

A World Bank Group blogger has invited his readers to use the bank's data tools to run a reality check on members of the G-20 and their post-summit embrace of entrepreneurship and market principles.

Ryan Hahn of the Bank's "Doing Business" blog pointed to several World Bank resources, including its fun interactive "Business Planet" data-mapping mashup.

Continue reading "A Cool Mapping Tool For You" >

"Lovin' That Tie, Bro!"

Wall Street Fighter

 

The folks over at Wall Street Fighter have compiled a great collection of pictures of Treasury Secretary Hank Paulson. Some of them are definitely Photoshopped, but they are all equally hilarious.

Betting on the fallout.

NPR

 

We asked Planet Money readers yesterday a most serious and important question: who out there has office bets going on about how low the Dow will go?

Never ones to let us down, you quickly sent us your responses and even some evidence.

Exempli Gratia: here is a pic of an "anonymous" office pool that wanted to share their wagers but asked not to be indentified. "SM" is predicting a bottom of 5500. Yikes! Let's hope they don't win the bet.

I've spent most of the last ten years as a healthcare reporter. What I've learned is that the system is so much more complex (in both good and absurd ways) than lawmakers and other "experts" try to make it sound in silly Congressional floor speeches and cable sound bites.

This is short and leaves a lot of nuance out, but here's a brief You Tube video titled "Why is Healthcare So Expensive." It's the third most watched clip today.

One beef I have is the part about supporting malpractice reform. I genuinely apologize for the shameless plug, but I did a story last year on California's malpractice reform, which is considered the most influential reform in the country. Like many things, the devil is in the details. That goes double for malpractice reform.

Who's who? (Click to enlarge.)

Stan Honda/AFP/Getty Images

 

Barack Obama gave his first news conference as president-elect today. In case you missed it, check out the video here.

Obama appeared with so many advisors that even we had a hard time figuring out who they all were. So our challenge to you is: How many of Obama's advisors can you identify in the photo?

This is for a possible total of 18 points. Answers after the jump. No peeking.

We don't know who the third from right is or the second from left. Can you help us?

Continue reading "Advisor Quiz" >

On yesterday's podcast, we talked about LIBOR, the London interbank offered rate. A measure of the interest banks charge each other for loans, LIBOR has lately been falling.

Yet when we asked money trader Will Aston-Reese about it for the podcast yesterday, he told us that despite lowered interest rate, he's still seeing precious little lending between banks. Which prompted Gordon Wilson to send us what looks at first like an entry for the Planet Money Glossary:

LIBOR = The rate at which banks will still not lend each other money...

Today we have the odd sight of one New York Times blog picking apart another.

In one corner : The Economix blog, which is asking readers to play a game picking, not stocks, but election results as a test of how well markets work.

In the other corner : The Freakonomics blog arguing that the contest won't test what it's supposed to.

Footnote: The website 538 does what -- as a former physicist -- I've always wanted to see leading up to an election. The folks there take the latest poll data and use it to simulate lots of elections. So when a state is a toss-up, for instance, you literally flip a coin. Right now McCain has to win a lot of coin tosses in a row. The site puts the odds of Obama victory at 96 percent.

At least that's what I think they're doing. Lots of caveats, but a fun experiment.

It's late. We're still working. And David Folkenflik sent this YouTube clip.

(Yes, Mama, it sometimes gets like this.)

Ray Fisman at Slate has a story on new research looking into whether intelligence agents of years past were maybe doing some insider trading on the side.

The study looked to see if certain stocks jumped in price before CIA-led coups.

I'm using part of this in the podcast today.

Our correspondent Mike Pesca, had a nice story on this week about an auction for football seats which looks like a sweet deal for taxpayers.

As the story explains, the auction is a classic example of what economists call price discrimination.

The idea is to charge everyone as much as they are willing to pay. So say you are Starbucks...

Continue reading "How Much Are You Willing to Spend?" >

This Friday, at 9:30 a.m., we are going to try an experiment. We want to place your life in the context of the global financial crisis.

We want to ask YOU to send us a note at planetmoney [at] npr.org or in the comments below, describing the rough outline of your economic situation -- your job, your concerns. Something brief.

Please note how we can reach you Friday morning. We don't have to use your full name on the podcast, but we -- Laura and I -- have to know it.

Then we'll pick a few and call you along with a prominent economist. And we'll analyze your personal economic picture. We'll place your life in a global economic context.

I can't think of anyone better to do this than Planet Money friend Simon Johnson. He is former IMF chief economist, current MIT professor and helpful guide of the excellent Baseline Scenario site, which is tremendously helpful in understanding the financial crisis.

I think this will be fun.

For the iGoogle crowd, Shaun Hervey sends this TED spread gadget. Created by Erik Saltwell, this little bugger sits on your customized Google page and gives you a picture of the credit markets in friendly colors and a happy font. Just now, the TED spread is at 2.62.

(What's the TED spread?)

Andrew Lahde, a 37-year-old hedge fund manager just cashed it in, saying he was content to invest the money he'd already made. Lahde wrote a farewell letter to clients that included an argument for legalizing marijuana. He wrote:

"It gets you high, it makes you laugh, it does not produce a hangover."

Today on the podcast we'll be talking to economist Satyajit Das about Iceland's credit crisis. Das has a lot of interesting things to say about Iceland's economy, but one thing you won't hear in the podcast, is the terrible joke he told us about how Iceland got into this mess. Das admits that only a derivates trader would find this joke funny, and we agree.

Everybody is asking,'Well how did the Icelandic banks get involved in CDOs?' and the joke goes, 'Well Iceland has a long tradition of cod fishing, c-o-d, and they might have confused their expertise in cod with CDOs, collateralized debt obligations.'

NPR's Dina Temple-Raston is a self-described eternal optimist. Lately, we're seeing the other side of her.

With every twist and turn of the markets, Dina's been the first to report the up-to-the-minute bad news at our water cooler with lightening speed.

We're grateful, honest. And in her honor we've decided to create a brand new category on our Planet Money Blog titled "Dina's Downers" so you readers can join in on the fun.

Today's latest:

"For the first time in history, the Dow Jones Industrial Average traded in a 1000 point range," says Dina.

The gods of fairness and television taste must be looking down on us this morning. The good news: the Los Angeles house where the (in my humble opinion) sign-of-the-end-of-the-world "Bachelor" series is filmed is now on the market and selling for a cool $4.25 million below its asking price.

A few years ago, I was an editorial writer at one of the newspapers where I worked. So I know it's not always easy making those unsigned editorials sound both smart and interesting at the same time.

But one of my favorite past times lately has been to watch the Wall Street Journal's notoriously conservative and free market editorial page contort itself into defending the government's slapdown of laissez faire economics in recent weeks.

Even if I don't always agree with what the paper's editorial board says, I often think they make very smart and well researched arguments. Lately, not so much.

Today's takes the cake. Here's my favorite shapeshifting line: "The government that helped to create the mess has to play a role in cleaning it up."

Take a read.

As the House of Representatives again debates the bailout bill it voted down, the folks at Intrade have bet its passage up by 5.9 percent this morning .

Meanwhile, the S&P 500 has nosed up 2.34 percent. The Dow's up 1.71 percent. NASDAQ's up 2.66 percent -- and so on down the list of indicators.

My Uruguayan/Spanish mother-in-law forwards this video to the global economy.

The geek in me really likes many of the blogs all these university faculties have started. Fine, judge. But they are really interesting.

To wit: The University of Chicago law school faculty (Sen. Obama's former cohorts) have an interesting item on their blog today by Prof. Randal Picker slamming the bailout and lamenting the endless moral hazards it will bring.

Continue reading "Now Galveston?" >

If it's true that only 31 percent of Americans favor the Bush administration's plan for bailing out Wall Street, that means anyone in the other 69 percent could have crafted the following parody e-mail. It landed in my inbox yesterday, labeled "FWD: not from Nigeria this time."

Continue reading "'Not From Nigeria' E-Mail " >

We just aired this piece I did about the "fear index" which does actually measure anxiety about the stock market. (Surprisingly, it's not as high now as it was during the 1987 crash.)

You can see what the fear levels are right now. And here's the other measure of anxiety that comes up in the story, the Ted Spread.

In the piece I glossed over how the fear index was actually calculated, which is pretty fascinating. An explanation after the jump.

Continue reading "Calculus Of Anxiety" >

Straight from Paul Detrick of EyeBlast.tv, a kaleidoscopic look at the week in business (and a dose of love for our own Adam Davidson).

Not looking pasty: Sarah Palin

Robyn Beck/AFP/Getty Images

We interrupt the hand-wringing over Lehman Brothers and Merrill Lynch for an old-fashioned analysis of cost and benefit. It comes from Michael Turk, a Republican political strategist, and it concerns the tanning bed that Alaska Gov. Sarah Palin reportedly installed in her state's governor's mansion.

Turk, the funny guy behind PalinFacts.com, writes that Palin's tanning bed likely cost about as much as a half dozen haircuts for onetime Democratic candidate John Edwards. Turk takes into account the scarcity of sunlight that far north:

Given the relative inability to lay out in the sun, and the relative cost efficiency over time of having a tanning bed in residence as opposed to paying a monthly membership to a tanning salon, this doesn't seem eggregious.

If they have a receipt that shows they paid 10 or 20 times market value for the bed, maybe. But $2,000 . . . on a tanning bed so your Governor doesn't look pasty when she goes on TV is not a stretch.

You know those e-mails you write and shouldn't send.

Well, I sent it. And now, I'm posting it. Publicly.

Continue reading "I Really, Really Shouldn't" >

The Executive Editor of The Deal wrote a snotty attack on me.

My favorite part:

"But it's going to be fun. There's no jargon, I promise," reporter Adam Davidson reassures his listeners, as if the mere utterance of the term "mortgage-backed security" would be enough to send NPR fans in search of Howard Stern. "In fact, in a minute or so, you'll meet a real amusement park sideshow carny," he chirps.

Lucky us.

She goes on. Apparently, I'm information-free.

I got my knickers in a bit of a twist and was writing a snotty response back to Ms. Kantrow. Instead, I decided to raise the issue here. This cuts to the very heart of what we're doing here on Planet Money, so I thought it was worth discussing.

Continue reading "The Deal Gets Nasty" >

Maybe the news isn't all bad. Just today, I got a bulletin from Marc Chandler, global head of currency strategy for Brown Brothers Harriman, who says the dollar has recovered a bit and may recover some more after several months' time. At least, I think that's what he said. I'll paste a key quote after the jump.

While we're waiting for the great dollar bounce, I'm hearing much angst from people who've heard I'm working on Planet Money. Mom wants to know whether India and China "own us now." One friend wants me to know if the whole world economy could just collapse. Everyone wants to know when the job market will turn around.

Look, we all need to know what color our parachute is. Mine, thanks to this guy, is the color of a squirrel melt sandwich. Hunt your own. Never mind money, securities, arbitrage, reverse amortization, whatever. I'm hunting my own.

Continue reading "Hunter-Gatherer: If The Economy Never Recovers" >

No. 52, with a vengeance: A Venezuelan tanker docks in Honduras, part of a drive President Hugo Chavez to give Caribbean countries preferential pricing.

Orlando Sierra/AFP/Getty Images

 

On Tuesday, the World Economic Form unleashed the first ever Financial Development Index. The report pulls together 120 variables on the economies in 52 nations. The United States slid into first place ahead of the United Kingdom -- by .02. Germany's third, with the Netherlands and Singapore clinging to the bottom of the top 10.

This week I caught up with one of the project's great minds, economist Nouriel Roubini. Roubini says the report is designed to help countries get a grip on their economic shortcomings -- but it can also help people like me figure out where to put our (buckets and buckets of) money.

Oh, and one other thing: The U.S. came out on top for now, but with all that rattling in our banking system -- Fannie/Freddie, Lehman Brothers and the rest -- we can't rest too easily.

Grab the report for yourself. It's 362 pages, but much of that acreage is in charts for individual countries. Don't be scared of it.

As a guy who has covered science for more than a decade, I've sat through some pretty arcane conferences. This conference I'm at of former finance ministers from around the world has a similar feel. Except that you sense that the future of the world could hang in the balance somewhere in all the talk about regulation and transparency and international cooperation. That's if you're awake for it. Steve Liesman, an economics reporter for CNBC is moderating the current discussion. He just complained that when he mentions the Basel Accords to his editors, they fall asleep somewhere between the "B" and the "asel."

See, it works like this.

Bob Sacha

 

When the news gets tough, the tough reporter heads to Coney Island. Adam Davidson, on the right in the picture above, turned to a carnie for help in explaining the Fannie Mae and Freddie Mac bailout.

Basically, the game here is that the U.S. buys more from China than China buys from us. China then lends us that money back, so we can buy more Chinese stuff. The way they do that is by buying bonds from Fannie Mae and Freddie Mac. And seriously, that's the whole deal -- the simple version of the whole deal, anyway.

Listen here, and you'll understand this giant game of Kentucky Derby in three minutes. Promise.

From Slate's Tim Harford, news of an experiment among British strawberry pickers. You'd better read it, because your boss (if you have one) will.