I often find myself explaining to friends how they can save some money by using a couple Fidelity Investments products. The other day it occurred to me that I might as well turn my typical rant into a post. Full disclosure — I worked at Fidelity for four years, but am no longer compensated by the firm in any way. It’s a great company, and they have many products that are extremely useful. The two products I’m going to explain work well together. The first is the Fidelity Cash Management Account. While Fidelity’s brokerage company isn’t technically a bank, the firm has a bank-like cash management product that’s quite similar to a traditional checking account, with some added features. The account
Category: Economics
Stimulus Plan Brings Foodie’s to Southie
There’s been a lot of debate about whether or not the stimulus plan worked. At the time it was passed, many argued that it wouldn’t be fast enough, that the projects would take so long to get underway that it wouldn’t be able to accomplish its purpose. And now, according to many economists, it definitely helped create jobs. But here we are, three years later. Our financial system didn’t self destruct, but economy is still growing at a pretty pathetic pace (although there have been some encouraging signs over the past two months). So, knowing we can’t change the past anyways, maybe its not so bad that some of the effects of the stimulus plan have yet to hit the economy. I’ve lived
The Great Norwegian Butter Shortage of 2011
This article threw me for a number of reasons. I’ll comment on it paragraph by paragraph: “An acute butter shortage in Norway, one of the world’s richest countries, has left people worrying how to bake their Christmas goodies with store shelves emptied and prices through the roof.” Why not ship some from Sweden? Or Denmark? Or the UK? Sounds like a good short term operation for someone with a truck. Or a boat. “The shortfall, expected to last into January, amounts to between 500 and 1,000 tonnes, said Tine, Norway’s main dairy company, while online sellers have offered 500-gramme packs for up to 350 euros ($465).” Whoa! Seriously? This is nearly $1,000/kilo, or $907,000 per ton. A truck can hold
Death to the Penny
Via Marginal Revolution, this is very well-done:
2011 Market Factor Performance
Via The Big Picture, BofA Merrill has a very interesting graphic showing the out-performance/under-performance of various quantitative market factors for stocks in the S&P 500. Quantitative market factors are investment signals studied in academia and/or used by investors:
AA+ What?
Kid Dynamite: “In case you’ve been living under a rock: Standard and Poors downgraded the credit rating for the United States of America last night, from AAA to AA+.” It seems that at this point S&P is generally viewed as incompetent, and the decision to downgrade the US may not be as consequential as many initially predicted. But who really knows? We’ll get a hint tomorrow morning. In the meantime, I found the following posts and articles to be thoughtful and/or interesting: James Kwak: Still, I think the whole thing is preposterous. S&P downgrading the United States is like Consumer Reports downgrading Coca-Cola. Consumer Reports is a great institution. For example, if you want to know how reliable a 2007
Corn Subsidies in One Chart
I’ve heard lots of arguments from both sides about the merits of domestic corn subsidies, but I think this chart pretty much sums everything up: Either directly, or indirectly, we consume too much corn. Thanks to my brother for pointing me to the chart.
Some Thoughts on Debt
The debt debacle has obviously been well covered in the news and on the blogosphere. James Fallows puts the impact of policies into perspective: The point is that governments can respond to but not control external shocks. That’s why we call them “shocks.” Governments can control their policies. And the policy that did the most to magnify future deficits is the Bush-era tax cuts. You could argue that the stimulative effect of those cuts is worth it (“deficits don’t matter” etc). But you cannot logically argue that we absolutely must reduce deficits, but that we absolutely must also preserve every penny of those tax cuts. Which I believe precisely describes the House Republican position. He also includes “the chart that
Outlier
The Theory of Interstellar Trade
My coworker pointed me to a Paul Krugman paper written in 1978 titled “The Theory of Interstellar Trade.” Here’s the abstract: “This article extends interplanetary trade theory to an interstellar setting. It is chiefly concerned with the following question: how should interest charges on goods in transit be computed when the goods travel at close to the speed of light? This is a problem because the time taken in transit will appear less to an observer traveling with the goods than to a stationary observer. A solution is derived from economic theory, and two useless but true theorems are proved.” Hysterical. The whole thing is worth a skim. This figure just takes it home: