More by the Same Author
2010-08-31 The Alternative to Big Bonuses by Charlie Curnow (Article)
Do bankers deserve big bonuses? Economists will tell you that bonuses improve employee productivity by rewarding good work. But did the large performance-based payments given to Wall Street securities traders, for example, really steer them to better choices during the run-up to the recent financial crisis? What about financial advisors who base their fees on a percentage of the assets they manage? We take a critical look at Dan Ariely's latest research and the insights it provides.
2010-08-10 Public Pension Showdown: Actuaries vs. Economists by Charlie Curnow (Article)
Public pensions are severely underfunded, at least according to the economists. Actuaries disagree, and at stake is nearly $2 trillion. We look at why these groups arrive at such different valuations, and which one is likely to be correct.
2010-06-29 Timber as an Asset Class: If a Tree Falls in the Forest, Should you Buy It? by Charlie Curnow (Article)
"If the sun shines and it rains, the trees grow about on schedule," wrote Jeremy Grantham, chairman of Boston-based investment firm GMO, in his quarterly newsletter in April 2007. Grantham's enthusiasm for timber, which remains true to this day, may be excessive, despite the fact that, on the surface, historical data seems to support his optimism. If a tree falls in the forest, should you buy it?
2010-06-01 The Burden of Choice by Charlie Curnow (Article)
Columbia business professor Sheena Iyengar, author of The Art of Choosing, is the woman behind the famous jam study. Her research, which has been cited by Dan Ariely and others, shows the implications of providing consumers with choices that are too numerous or complex to easily evaluate. Charlie Curnow reviews her book.
2010-05-18 Spain: After the Bubble by Charlie Curnow (Article)
Today, Barajas Terminal 4 one of the most visible artifacts of the profligacy that fueled Spain's property bubble and led to the country's current financial crisis. Spain, like several other European states, has continued to spend rapidly over the past two years, even as its economy has contracted. As a result, the Spanish government's debt has skyrocketed, raising fears of a possible sovereign default.
2010-05-11 Predicting Financial Crises by Charlie Curnow (Article)
MIT Sloan School senior finance lecturer Mark Kritzman thinks he has found a warning signal to predict the onset of financial crises in a new statistical model called the absorption ratio. The absorption ratio predicts systemic risk by measuring how tightly markets are coupled, and thus how vulnerable they are to the spread of negative shocks.
2010-05-04 The Future of Consumer Financial Protection by Charlie Curnow (Article)
Among the items that headline the proposed financial reform legislation is a new Consumer Financial Protection Agency (CFPA) that would consolidate regulatory responsibilities for consumer financial products, currently handled by four separate agencies, in one central office. Charlie Curnow looks that the goals of the CFPA and its implications for consumers.
2010-04-13 Are Public Employees Bankrupting the Nation? by Charlie Curnow (Article)
While markets may be recovering, public debts are still mounting. Charlie Curnow reviews Plunder, the new book by Steven Greenhut, which blames public sector unions for a large portion of these debts. To Greenhut, we the taxpayers are helpless villagers, while corrupt public employee unions are barbarians at the gate, raiding government treasuries and leaving us with nothing but unfunded liabilities.
2010-03-30 America's "Failing" Infrastructure? by Charlie Curnow (Article)
In 2007, the spectacular collapse of the Mississippi River Bridge in Minneapolis killed 13 people and was the catalyst for calls for massive investment in infrastructure projects. Whether that catastrophe was truly symptomatic of systemic failure or simply an unfortunate but relatively isolated incident, however, remains up for debate. In fact, once one looks past the politics of infrastructure investment to the hard data, there's reason to believe the latter.
2010-03-23 Quadrophobia: Predicting the Next Enron? by Charlie Curnow (Article)
Accounting scandals such as HeathSouth, Chiquita, AIG, and most infamously, Bernard Madoff Investment Securities have sent many academics and financial professionals in search of new formulas to predict "the next Enron." A professor and a graduate student at Stanford recently revealed one such approach, which they dubbed Quadrophobia, which showed that, in earnings announcements, the digit four was underrepresented to the right of the penny's place.
2010-03-23 Quadrophobia: Predicting the Next Enron? by Charlie Curnow (Article)
Accounting scandals such as HeathSouth, Chiquita, AIG, and most infamously, Bernard Madoff Investment Securities have sent many academics and financial professionals in search of new formulas to predict "the next Enron." A professor and a graduate student at Stanford recently revealed one such approach, which they dubbed Quadrophobia, which showed that, in earnings announcements, the digit four was underrepresented to the right of the penny's place.
2010-03-02 Massachusetts Pensions in Crisis by Charlie Curnow (Article)
We wrote in the past about the perilous situation of public pension systems nationwide, and the Massachusetts state pension system is no exception. The severe problems Massachusetts faces - created by years of generous worker benefits and declining asset values - mirror challenges faced by many other states.
