Wednesday, April 11, 2012

We're Taking a Break

Well.... I guess this day had to come.

There's no political pressure, no monetary pressure, maybe a BIT of time pressure... Ok, a LOT of time pressure. Yours faithfully at EconStu are leaving the cyberwaves. We may be back... Perhaps even sooner than later...

But, for now, with resigned and gracious sigh, we bid thee goodnight, farewell, and safe journey....

Mazi's Link O' the Day

Having just come back from vacation in one of the more urbane and chic centers in Spain (Barcelona), I saw a bustling, healthy economy. But then of course, most people doing the shopping were tourists. In reality, Spain is making a pretty strong case for being the next Greece. Brussels, on the other hand, is not helping:'s+Global+Economic+Trend+Analysis)

Monday, April 9, 2012

Mazi's Link O' the Day

I've forgotten why we have an Easter bunny. Why not an Easter pack rat or weasel? Anyway, I'm sure there's a reason. In other news, Happy Easter:

Sunday, April 8, 2012

Mazi's Link O' the Day

Can you imagine having so many stacks of books to slop through that your quiff of hair (if you have one) droops down and sticks to your forehead from the sweat? That might be something like this man's experience:

Saturday, April 7, 2012

Mazi's Link O' the Day

I guess there was no loveday for the founder of Jimmy Choo and her private equity cohorts. TED counters yet another attack on the much maligned industry:

Friday, April 6, 2012

Mazi's Link O' the Day

I'm no Republican, mind you, and I swear I'm not sucking up to Mitt Romney here, but he might have been right about the "drag" of a recovery. So, say I'm looking for nepotic favors from ole Mittens, but this graph doesn't lie:

Thursday, April 5, 2012

Mazi's Link O' the Day

There are people who lust over gold, and its value as an economic tool, like people from Illinois lust over Lincolniana. Beware these people. Felix Salmon tells us why:

Tuesday, April 3, 2012

Mazi's Link O' the Day

If you would like to be a baller at the proverbial successful investors' dance, you need to do your research. Here's a book review, and maybe somewhere to start:

Monday, April 2, 2012

Mazi's Link O' the Day

Berlin has set up a new fund to save... Get this... it's night clubs! Well, can the grand city's reputation be salvaged, or will money only palliate the "Clubsterben?"

Sunday, April 1, 2012

Mazi's Link O' the Day

Do not ever let your life become scleroitc, for it is unnatural for the human spirit to be so:

Saturday, March 31, 2012

Mazi's Link O' the Day

Sometimes I like veer away from posting about current events and give my dear readers something more general. Here's a brief on "indexes" like, say, CPI (consumer price index), which measures changes in homely purchasing power:

Friday, March 30, 2012

Mazi's Link O' the Day

To avoid the crazed "Green Man" of flash crashes and market madness, limit orders are a good way to make sure you get the value you desire:

Thursday, March 29, 2012

Mazi's Link O' the Day

The graphs in this article can seem a tad daunting at first. But look closer and this "rebus" resolves itself. The commodity index is trading below all the comparable indexes presented here. Why?:

Wednesday, March 28, 2012

Mazi's Link O' the Day

Like the galah bird's pink bosom, humankind's hubris is perhaps our defining and most ostentatious feature. TED gives us a few of his thoughts on the subject:

Monday, March 26, 2012

Mazi's Link O' the Day

TED discusses the JOBS Act's impact and offers some unrepentant truth: The big underwriters couldn't be bothered to piddle on the desires of us poor retail investors:

Sunday, March 25, 2012

Over Budget

Movies, movies, movies... Everyone loves movies. Most recently, the airwaves and cyber-pages have been abuzz over "The Hunger Games." I haven't seen it, so got  nothing for ya. However, I can say something about another movie I have not seen.

The film "John Carter" has been an unprecedented celluloid catastrophe. In Hollywood lingo, "It's the biggest bust in history." This, of course, raises the question, "How do you not see it coming?" As a studio, one might be surprised by a slight under or over-performance, but to fail so ungracefully, hideously, and miserably cannot be so unforeseen. Surely, that proverbial raven of ill will must have flown over the film set a while back.

From what I've heard and read, that's not the point. To summarize, many large studios give their leading stars gloriously overblown roles and paychecks in mediocre films to keep them happy. (Why does this make them happy, aside from the money, I don't know...). I suppose the argument goes that when you think you've got a real winner on your hands, you have a stable of willing A-listers to jump on board to propel your project to immortal status.

Fine, ok That means the studios are willing to lose big bucks in the hopes of reclaiming them, and more, with a few smash hits every now and again. Moreover, they believe that certain actors can create enough value with their mere presence to make up for all the losses incurred on movies WITH THE SAME ACTORS. Anyway, I ran some numbers. (From

Average worldwide film gross (total) from 1995-2012:


Average number of films per year 1995-2012:


Therefore, average gross per film 1995-2012:


"John Carter" cost $237,000,000.

Let's say the studio gets a great script. They wanna use the star of "John Carter," Taylor Kitsch, again. And let's say it's the same budget again. We'll give the script writers some credit and say they added a chunk of value to the average. So now, we've got a film worth, say, $50,000,000. By Hollywood's logic, Taylor Kitsch is the final blast from the rocket that will send this ship space-bound, so to speak.

Well, in order for the film to BREAK EVEN, young mister Kitsch would need add $187,000,000 to the value of the film.

I'll let you figure out if that's plausible. Hell, it might be! I'm no film expert. I'm just giving details people....

Mazi's Link O' the Day

Sorry folks, I've been in Barcelona, but I am returned! And I bring you something on gas prices. President Obama has likened himself to superheros, but his supposed amazing adjurations of high gas prices from the economy have not really come true:

Wednesday, March 21, 2012

Mazi's Link O' the Day

TED has an interesting theory. When the investment banks went from privately owned dragonets to full-fledged public, fire-breathing beasts, they lost their souls, so to speak:

Tuesday, March 20, 2012

Mazi's Link O' the Day

This article argues that concept of "potential GDP" is, at best, adscititious, and, more likely, naive: 

Monday, March 19, 2012

Mazi's Link O' the Day

Now that breezy carelessness of St. Patty's weekend has been ravened away by the return of MONDAY, I hope you enjoyed it:

Sunday, March 18, 2012

Mazi's Link O' the Day

Interesting thought experiment: In order for somebody to absquatulate with your right marry, they got to pay you for it:

Friday, March 16, 2012

Mazi's Link O' the Day

TED offers a strong rebuke to Goldman Sachs. Everyone's pissed off, even if no one's surprised. I'll give my own words to the matter shortly:

Wednesday, March 14, 2012

Mazi's Link O' the Day

Goldman's hiring a new PR chief. TED suspects Mr. Siewart (the new guy) will not spew the same tendentious fire and brimstone party-line that Mr. Van Praag (the old guy) did: 

Tuesday, March 13, 2012

Mazi's Link O' the Day

Some good and bad news for your Tuesday. Not exactly an aureate report on small businesses, but at least optimism is up. On the other hand, inventories increased, a sign usually linked to slow demand. I think I have other posts about inventories... Hmm... Can't remember. Anyway, that's the way it is:

Monday, March 12, 2012

Mazi's Link O' the Day

If you've been following Attorney General Eric Holder's statements, you know there's a bit of controversy swirling around the President's "supposed" right to kill American citizens he deems "terrorists," or something to that effect. I agree with the following letter, sent in response:

Thursday, March 8, 2012

Mazi's Link O' the Day

Let's take a look at France. Francois Hollande, a presidential candidate in that country has proposed a 75% top tax rate. The main opposition? Professional football (soccer):

Wednesday, March 7, 2012

Mazi's Link O' the Day

Greg Mankiw is advising Mitt Romney, whose previous industry-of-residence, private equity, has come under fire. Many people have looked at Romney's wealth and compared it to his paltry tax rate, the benefit of "carried interest." Mankiw tried to defend this rate in print. Here's a rebuttal:

Tuesday, March 6, 2012

Mazi's Link O' the Day

A good note for the Republican candidates who wish to do away with the Federal Reserve? That may be true, but the general timbre of this article should be kept in mind by all would-be reformers:

Monday, March 5, 2012

Sunday, March 4, 2012

Thanks for Helping!

"Patent holding company"

"Non-practicing entity"

Names like these sound official and respectable. But what about "patent troll?"

I wasn't aware of their existence till recently, as I was perusing the Internet for information on patents. A friend and I have recently founded a technology start-up, so, of course, we're looking into patenting our product. I'm not trained in law, but I can imagine the legal process for filing is quite obtuse. And, naturally, where there are confusing processes afoot, there are opportunities to make money. What these patent trolls do, apparently, is hold a trove of patents, not using them, but merely hanging on to them. Then when some, usually large and rich, company tries to file for a new product, said troll jumps out of the bushes and shouts "aha!" and slaps forth an enormous lawsuit.

Perhaps the most well publicized patent troll "attack" was when NTP sued RIM, of Blackberry fame, over its patents. RIM settled to the tune of $612 million. The great, sad irony? It was fairly widely accepted that NTP's patents would be nullified to "prior art," which means there is evidence of the patented technology prior to the patent filing. However, the law does not care if the patents are eventually overturned. So long as NTP's name was written on those documents, they could sue.

Legal complications aside, this form of "business" is revolting to me. Although, easy money is hard to turn down. Patent trolls actively hurt growth by scaring new firms from entering the market, and possibly stopping or slowing down new innovation. These companies are about as helpful as a computer virus. Thanks guys! You should be ashamed of yourselves...

Mazi's Link O' the Day

One need only peruse the headlines to see how much buzz there is around bailouts and stimulus. Has it gone from aid to addiction:

Saturday, March 3, 2012

Mazi's Link O' the Day

Straight from Macro Theory, a brief discussion on sticky prices and how monetary policy should be adjusted to take account of them:

Friday, March 2, 2012


Rick Santorum is a deeply troubled and misguided man. Here's the three things you need to know:

1. He wants to overturn Griswold v. Connecticut (which stopped states from banning contraception). Therefore, it follows that he wants our government to ban contraception. He has made it clear that his beliefs regarding contraception are based on religious teachings. Thus, Rick Santorum wants to enact laws explicitly based on religious doctrine. He also decries Islam and, more specifically, Sharia law as terribly oppressive and constricting. He denounces religious law, but he also supports it. Hypocrite.

2. He thinks that colleges are "indoctrination mills" and that Obama is a "snob" for boldly setting forth the goal that every American go to college. It's funny how the facts ( tend to make Santorum look like a fool.

3. He likens Obama and his opponents (progressives in general) to Hitler and Satan. I do not believe that he is using inflammatory rhetoric for the sake of being elected, rather, he truly believes that liberals are influenced by Satan. When one believes fellow Americans are evil incarnate, compromise becomes impossible, and oppression becomes likely. If he were elected, scary things could happen to liberals. 

I have nothing against informed, principled conservativism. Rick Santorum is not a conservative, he's an insular thinker with a world view that would be laughed out of even the 20th century. He shouldn't have a pulpit in the 21st.

Thursday, March 1, 2012

Wednesday, February 29, 2012

Mazi's Link O' the Day

There tends to be a marriage bias in female pay. Married women are simply paid less than single women, even when many relevant variables are controlled for. What else could be explaining it? Well, while some of the explanations may seem sexist, the author is not imposing HIS views here. He's just offering forth information in the numbers and in social perception. I'll let you judge how much sexism plays a role:

Tuesday, February 28, 2012

Mazi's Link O' the Day

I'm not sure if I've expressed this sentiment on the lovely blanche pages of this blog, but I have been wary of China's monstrous growth. I think it's unsustainable, and much of my nervousness springs from the country's somewhat cavalier use of monetary policy. For what it's worth, people agree:

Monday, February 27, 2012

Mazi's Link O' the Day

Well, it's no surprise that once Iran started huffing and puffing that oil would begin trudging higher and higher. Here's a more detailed look at what's causing oil prices to rise. It may not feel awful now, but keep in mind, we're not even near summer yet, and that's the season where oil typically peaks:

Sunday, February 26, 2012

Saturday, February 25, 2012

Friday, February 24, 2012

Mazi's Link O' the Day

The Obama administration released its analysis and new proposals for the business tax system. What was wrong with it before, you might ask? Well, this article explains the  "unfairness" that pervades currently:

Thursday, February 23, 2012

Mazi's Link O' the Day

You may remember I posted a link about the need for a Byzantine financial system. In the name of fairness,here's a somewhat opposing view. Does the Fed play favorites?

Wednesday, February 22, 2012

Mazi's Link O' the Day

It's like TED reads my Facebook.... Eerie... Anyway, long live books (not e-readers)!

Tuesday, February 21, 2012

Monday, February 20, 2012

Mazi's Link O' the Day

TED, once again, defends our liberal arts institutions and takes offense at the claim that Wall Street is luring away our bright youngsters to nummamorous lives of servitude:

Sunday, February 19, 2012

Mazi's Link O' the Day

What if they had the Nobel Prize for economics in the early 20th century? Who would have won?

Friday, February 17, 2012

Mazi's Link O' the Day

Surprising results about the correlation between insurgency and unemployment (you'd think it'd be positive, right?):

Thursday, February 16, 2012

Tuesday, February 14, 2012

An EconStu Valentine

Let us assume a basic economy. Economists in Austerios are interested in comparing the levels of investment and unemployment. They already have some basic information.

They know the relationship between u', the rate of change of unemployment with respect to x, the level of consumption with respect to time.


du/dx = (8/15)x


I < (4/5) (x)^2

This last equation tells us, in Austerios, the level of investment must be strictly less than four-fifths the level of consumption-squared in the economy.

We must integrate to find an equation relating u to x.

Solving, we find:

u  = (4/15) (x)^2 + constant

I'm going to assume away the constant here. It is most important when comparing base levels of consumption and unemployment, and I'm not concerned with the extreme case. If both u and x are sufficiently large compared to the constant, we get

u = (4/15) (x)^2

Now, we can find our relationship between the unemployment level and investment.

Plugging in:

I < (4/5)[(15/4)u]

So, it must be the case that...

I <3 u

Happy Valentines Day

Sunday, February 12, 2012

Mazi's Link O' the Day

Tyler Cowen proposes a new form of regulation for "too big to fail." Put sherholders on the hook:

Saturday, February 11, 2012

Mazi's Link O' the Day

Greg Mankiw gives a good explanation of the Obama administration's healthcare shift:

Friday, February 10, 2012

Thursday, February 9, 2012

Mazi's Link O' the Day

In first economics class, I wrote a case study on Turkey. So, you can imagine, that country has a special place in my heart. Here are 3 lessons to take away from it's economy:

Wednesday, February 8, 2012

Mazi's Link O' the Day

Are we cutting debt too quickly? Lower government spending will detract from GDP, and low growth will mean less tax revenues (which makes reaching those deficit targets difficult). Can we really afford more hampers on our growth?

Tuesday, February 7, 2012

Mazi's Link O' the Day

"Implicitly, Republicans... Want everyone to submit to their dogma":

Monday, February 6, 2012

Mazi's Link O' the Day

I think the ending arguments of this piece are my favorite. It really all comes back to the same, staid axiom of finance: The unbreakable link between risk and return. Interestingly, people (bankers, etc..) have seen incredibly profitable investments, and assumed that the risk was low, that the PRICE of risk was low, simply because the models told them so. But, as TED asserts, if your risk falls OUTSIDE of the capital system, say, away from Wall Street and onto the shoulders of government, naturally, risk will appear much cheaper:

Saturday, February 4, 2012

Friday, February 3, 2012

Mazi's Link O' the Day

A pretty vehement attack on Keynesianism. (I try to provide all view points here):

Thursday, February 2, 2012

Mazi's Link O' the Day

This article is a nice follow-up to my post yesterday. If we do wish to get back to a purer, more equitable (that's a loaded phrase, I realize), form of capitalism, one of the big changes that needs to occur is the end of "Too Big Too Fail." As I mentioned, the prospect of failure and of being run out of town by a newcomer encourages even old and large firms to be vigilant and not take unnecessary risks. Simon Johnson writes that we may be moving in the right direction:

Wednesday, February 1, 2012

Angry Masses, Wrong Villians

The Occupy (Fill it in) Protests, the still lingering sting of the financial meltdown, the possibility of ANOTHER financial meltdown, and various iniquities performed by corporations (a la MF Global), have generally ostracized and vilified the apologists of capitalism. What happened to the once mighty (and loved) assembly-lines of Ford, which raised so many poor Michigan-ers to levels of "middle-class?" Who would support this economics system in place NOW? I'll tell you... Republicans... Conservatives.... Mean, Rich, People....

Well... That's not so true. Or maybe it is. We can't have this argument until I clear up an important point. This is not pure capitalism, or even a slightly muddy version of it. In fact, as argued here, there are many components of what we live in now that are stringently non-capitalist.

So, let me proclaim (from ye blog on high), that I am a liberal who supports capitalism (in a slightly revised form). I'll stay away from my political view, not because I am shy to share, but simply because I try to avoid political evangelicalism on these white pages, and prefer to stick with rabid economic evangelicalism. Plus, I imagine, many people know what an "American liberal" believes.

Now, I ought to make the point I've been dancing around ever since the title of this piece. The esteemed 99% are PISSED OFF at somebody or something. And, to avoid the vagueness of  proletarian philosophizing and moralizing, we've all come to the conclusion that they're pissed off at capitalism. Fair enough. Look at all those giant conglomerates, who have lobbyists whispering in the ears of our Congressmen. But these are precisely the non-capitalist elements of society that bother me as liberal and capitalist.

People of my point of view like to toss around the phrase "the free market." That's all fine and dandy, but let me rephrase it as "the competitive market." Here, in its most pure form, firms do not have market power. If they price too high, are inefficient, or betray their customers, they will cease to exist. Of course, it is unrealistic to assume no firms will achieve market power, and perhaps that's a good thing. Natural monopolies arise (for instance cable TV), and this makes for lower marginal costs. But technical issues aside, in the competitive market I like, there is always change. And change is what we lack. I'm not saying, "out with the old, in with the new." But a healthy market should have new firms and innovators challenging the staid ones. Most of these entrants will fail, for sure, but being "under pressure" forces some of our more comfortable heavies to stop resting on their size and influence.

As a liberal and capitalist, I'm happy when someone like Mark Zuckerberg can penetrate the world of technology, because he has a good idea, and his good idea can't be blocked or "lobbied against." And that, my friends, is capitalism. Capital in the hands of private owners. Firms competing against each other to win support and money (which becomes more capital) from consumers, not firms competing to get into Senator Joe's pockets.

The ones who would seek to maintain this status quo are not capitalists. They may have started somewhere there, but they have strayed. I'm not even going to begin to propose solutions to our current methods, as that would require a book, but I'll leave you to consider the possibilities. We do not live in a capitalist society. Getting back to one will not exacerbate our problems, as some would have you believe. It will solve them.

Mazi's Link O' the Day

Here's a job report controversy for you: How many were made last semester? Answer: I have no idea:

Sunday, January 29, 2012

Mazi's Link O' the Day

Coffee vs. booze:

Saturday, January 28, 2012

Mazi's Link O' the Day

Coffee vs. booze:

Friday, January 27, 2012

Pardon Who?

After a long drought of strong opinions on governance on this blog (Econstu really suffered), I'm back to start opining on the intersection between public policy and economics. That, or whatever I need to vent about. To start things off, why do pardons exist? Our presidents and governors take opportunity of their last days in office to free well-connected individuals and help them circumvent the justice system. Let's follow this to its logical conclusion.

If a governor pardons a man, it stands to reason that that governor believed the sentence to be too harsh. Yet, what is our justice system for, if not to mete out proper sentences for wrongdoing? If a governor can pardon anyone, why do we even have the need for the court system? After all, we gave the governor the right to pardon, so he must know better than judges and juries. (Cue sarcasm) In honor of the time-honored tradition of the pardon, I propose that we abolish our judicial system and leave all legal matters up to governors from here on out (end sarcasm).

We have courts to serve justice, we have governors to govern. Let's stop letting governors play pretend all-knowing all-seeing arbiter of justice at the end of their terms.

For reference:

Wednesday, January 25, 2012

Mazi's Link O' the Day

I might argue that the title and conclusion of this article are not in sync with the body, but both ideas put forth are correct. The title claims that higher taxes will HAVE to be part of our near-term future. Yes, true. Sorry conservatives, but you cannot cut spending indefinitely, and pretty soon the clamor for a raise in taxes will be too loud to ignore. The body argues that this increase will be GOOD. Also true, and something I've argues before:

Tuesday, January 24, 2012

Mazi's Link O' the Day

TED argues that we cannot have a well-functioning, transparent financial system. By its very nature said system must be opaque, and surprisingly(?), he's fine with it. Point being: Show me another financial system, in history, that works better:

Monday, January 23, 2012

Mazi's Link O' the Day

A good article giving some of the low-down on all the attacks on private equity (courtesy of the Republican presidential candidates):

Sunday, January 22, 2012

Mazi's Link O' the Day

TED reviews Margin Call (which I liked). You should all go see it:

Saturday, January 21, 2012

Mazi's Link O' the Day

Amazing stat: It's been 37 months that interest rates have been at/near 0! Unbelievable.... So, when's it gonna change? The Fed is going to have its Open Market Committee meeting soon. I guess we'll see:

Monday, January 16, 2012

And So Much For All That...

Those of you Internet dwellers who happen upon this site with any semi-regular frequency might have raised an eyebrow at the lack of "full posts" in good while. Be thankful that there have been any Links O' the Day, I would counter.

Your humble author is currently drowning in mathematical work from his current institution of higher learning in the United Kingdom. And aside from all that, various boorish chores have called my attention away from my true love (You! My precious peons!). 

But no need to pull out a box of Kleenex for your tears yet. Full posting should resume soon, just as soon as my sleep schedule becomes less abhorrent.

In the meantime, it's a new year, so this seems as good a time as any to ask if there exists at least a few worthy souls who wish to contribute to EconStu. 

You can reach me at

Ciao for now!

Mazi's Link O' the Day

TED discusses the auction process for a firm (in response to an article attacking Bain Capital's tactics):

Sunday, January 15, 2012

Thursday, January 12, 2012

Wednesday, January 11, 2012

Mazi's Link O' the Day

The news is buzzing about optimism in the U.S. economy, but before we all decide that the storm has passed, we ought to take a moment to look at some rough patches. Here's a bit on fiscal policy/spending:

Tuesday, January 10, 2012

Mazi's Link O' the Day

7% is the "magic number" when it comes to high yields. Italy's sovereign debt is trading above this level. Sign o' the times? Not so good:

Monday, January 9, 2012

Mazi's Link O' the Day

TED gives a brief summary of "missed points" when it comes to criticisms of banker pay:

Wednesday, January 4, 2012

Mazi's Link O' the Day

A nice tie in with my last post, this article keeps you on your toes and reminds you: There are many unknown dangers in the year ahead:

Monday, January 2, 2012

Ineptitude: 2011 Edition

Now that we have stumbled, headfirst into another year after we all barely escaped the last one alive, it's time to reflect, as they say. And while our success and victories might serve as the sweeter ingredient in our 2011 memories, it is undoubtedly more entertaining to parade out the failures for one last lap around the track.

Embracing said tone, we at EconStu would like to present 3 economic failures of note in 2011. Sadly, unlike personal flops, economic ones take a while to fade to the background, and, in some cases, cannot be relegated to "Memory Land" just yet. But enough! Here they are:

3. MF Global gets its hand stuck in the wrong cookie jar.

It was Halloween when derivatives broker MF Global showed the world its hand. That hand, it turned out, was alarmingly void of money. Money that belonged to clients. MF was not stashing that cash away for a rainy day, protecting form the hardships of the world. Actually, MF didn't seem to have much an ideas as to where it all went. It appears the company, in reality, decided to use this customer money to cover up some of its own mistakes, namely, bets on European sovereign debt.

Also, MF Global was a "primary dealer." That means it was one of a handful of firms allowed to trade directly with the Federal Reserve. Well... That's reassuring.

2. The Clock almost strikes midnight on Congress

We should well remember the fiasco in the middle of the summer of 2011. Here's the brief:

The U.S. has a debt ceiling (Why? I don't know).

Congress habitually raises said ceiling to allow the Treasury to borrow money to pay people to things (read: pay the governments employees).

The Tea Party recently rose to power (hence, they have a fresh agenda).

Some right wing politicians decided to NEVER raise taxes... Again.

They almost failed to pass the debt ceiling raise.

They did (in the end).

We got downgraded.

3. Europe's in trouble.

Get rid of your euros!!!! NOW!

Sunday, January 1, 2012

Mazi's Link O' the Day

Greg Mankiw is excited for John Cochrane (of Chicago) blogging. You should be too! (P.S.- He's a tad right of center... But that means different things in economics vs. politics):