Stocks up on tame inflation data and other musings …

The market is up today, which pleases me.

• Stocks rose. On the New York Stock Exchange Tuesday, 2,513 stocks advanced and 782 declined on volume of 1.2 billion shares.
• Bonds advanced. The 10-year note rose 13/32, or $4.06 for every $1,000 invested, to yield 4.885% Wednesday, and the 30-year note was up 21/32 to yield 5.006%.
• The dollar weakened. The euro was at $1.2852 from $1.2785 late Tuesday, while the dollar was at 115.79 yen from 116.10 yen.

The lower reading on consumer inflation raised hopes that the Federal Reserve’s rate-lifting campaign has ended; the DJIA had climbed to within 81 points of its all-time high. The Labor Department’s consumer price index increased by 0.4% in July, up from a 0.2% increase in June. This is in line with analyst expectations. The less volatile core CPI grew 0.2% last month. Thus, without the influence of volatile food and energy, the core CPI grew below expectations. On a yearly basis, the core CPI is up 2.7%. Additionally, the wholesale inflation also showed moderating inflation pressures.

The housing prices show signs of some well-needed moderation.
Just a couple of interesting blogs…

• Greg Mankiw enters into the ongoing debate between Jeremy Siegel and John Bogle on passive investing in NYT. The core point is Siegel’s recently advanced idea of fundamental investing – creating indexes that reflect fundamental or value directed valuation ratios, capitalizing on systematic mispricing in the markets and the inability of active managers to reap value. Mankiw sides with Bogle. And it is easy to see why from an efficient market perspective.
• In his blog Barry Ritholtz looks at the uses and abuses of inflation data. But most importantly, he sees as many on Wall Street, the ugly head of stagflation. With slower consumer inflation, negative producer price inflation, relatively high interest rates, weaker GDP numbers, value decline in housing stocks and volume decline in housing starts, as well as somewhat weaker consumer data. It is easy to see why.
• On the happiness front, there is a small piece on Money and Happiness in the Wall Street Journal. My point is that I would rather cry 0n the backseat of a Bentley than a Hyundai.

Miscellaneous links …

• Best blog right now – seeking alpha.
• Sen. Santorum who has recently turned green, is gaining on Casey. According to the Quinnipiac poll, the tactic works.
• Swann trailing in campaign for Pennsylvania’s governorship. Another possible (rather likely) win for the Edster.
• In other PA political news, Hazleton, PA, faces a lawsuit. Recently, mayor Lou Barletta and Hazelton council members passed a controversial legistlation that was to punish those who hire or rent to illegal immigrants. Landlords would be fined $1000 per illegal immigrant. This act also made the English the town’s official language. This is a sad infringement on civil liberties. I do not support any sides of the current illegal immigration debate. Any legislation on any level attempting to change the status quo would make the situation worse – nothing Pareto optimal here. What worries me is that other communities across the United States have requested information on this proposal for use in their own municipalities
• The debate on what colleges do for a living continues. I am a strong believer in the objective certification model of eduction, an approach recently suggested by the federal Commission on the Future of Higher Education. Already and unexpectedly, there is some tension brewing. There is a crisis in higher education and the sooner we solve it, the better for the students.
• Should I jump on the Allen – Macaca, Katherine Harris, or the Liberdammung bandwagon?
• Is Keith Olberman onto something?
• Reading Granma International’s English language feed offers a different perspective on the Cuban life. According to Hugo Chavez, Fidel is more like a brother than a friend.
• When will Ahmadinejad blog in English? Al-Jazera already does it and their cartoons can be entertaining – sometimes.
• From youtube another hilarious clip.

Maximizing futility

One of the benefits of roughing it at the beach, is the complete isolation from electronic media, includng the internets. Cybercafes in this nearly thirld world country are long and far between, and my goal of being native assumes fans, al fresco showers and mom-and-pop stores. Four Seanons’ are nice as long as I do not live there or there are not on the island. Thus, wireless internets and other assumed luxuries of modern life do not exist. This explains the infrequent postings. This Saturday morning, I was able to hitch a ride on a truck into town to read email and get the essential groceries and other necessities – getting back to the cottage will be rather simple – and I stumbled across a small dimly lit deserted cybercafe which seemingly is related to cybercafes by having access to one slow – pre 2000 desktop with a cranck generator and an internet connection performing in bytes and not kBs. And there is enough -cheap – liquor to fuel a fraternity house for an entire year … You get the picture.

While reading trough briefly my sage booklets and all the news that I saw fit to miss, I started reading the Economist, which in this week’s issue discussess the invisible hand on the keyboad. And Brad deLong goes after it. Clearly, there is a demand for economists blogging by sharing – quality – information. My posts are not at par with DeLongs, Mankiws, Becker-Posners, and the other academic economic luminati, nor do I aspire to achieve the same status. Nevertheless, I believe that somewhere in the dissemnination of information, the easier access to ideas, analyses, and various, often contradictory opinions, leveling the playing field in the general economic and financial debate – insert your favorite overused metaphore here – there is a benefit to examine ideas.

Do I create value? Yes, I do. Using data from Technorati which is inspired by research from Tristan Louis, a week ago, my blog was valued at roughly $1,100 and not I am at roughly $1,700. Thus in less than one week, I have created $600 in value – roughly $100 per day, which would be a nice compensation for the time I spend. And I was off on this tropical paradise with my wife for half of it.

How do other economic blogs stick up to this value?

• Abnormal returns – $14,678.04
• Brad DeLong – $379,370.88
• Econbrowser – $169,926.54
• EconLog – $224,122.38
• FinanceProfessor.com – $24,839.76
• FinancialRounds – $31,049.70
• Greg Mankiw blog – $316,142.40
• MarketPsychologyBlog – $0.00
• Philip Baecker – $ 0.00
• SmartEconomist – $19,758.90
• Becker-Posener – $471,955.44
• PrudentInvestor.com – $471,955.44
• VoluntaryXchange – $26,533.38

OK, I am a bit short. But being in business for such a short time, I should be – still – optimistic. See you next week.

Tuesday news roundup

It is unbelievably hot here in Central PA and the temperature is expected to hit 100F.

• WSJ and BBC both report that Fidel Castro undergoes surgery. Castro is 79 years old and transfers power to his 75 year old younger brother, Raul. This is not surprising, he has been in bad health lately. The question now becomes, when can I smoke a Cuban legally. I am willing to take bets.
• Jomentum is cool. Both the Daily Kos and Wonkette sacrifice serious binary resources into the analysis of Joementum, or rather the lack of it. If the Colbert Report is discussing Joementum, clearly there is something to talk about. BTW, Mitt Romney is out. No link’s necessary …
• CNN is taking on www.youtube.com and allows now users to post content. The White House is updating its pressroom, which originally was built atop a filled in swimming pool. These new changes will help the pressroom to communicate more drama.
• Smut stinks. Howard Stern is not working out for Sirius. It posts wider loss, but the subscriber base is increasing. According to Sirius it added 600,460 subscribers; it has 4.7 million at the end of the quarter. The company expects to have 6.3
  million subscribers by the end of 2006. Previously it expected 6.2 million. Last week, XM posted a wider loss for Q2 and cut their subscriber estimate. XM, which has seven million subscribers, expects to end the year with between 7.7 million and 8.2 million.
• Cingular and Verizon start charging their customers with old phones a monthly service fee.

Market news

• The appeal of ETFs is shifting to Main Street. This is a positive and very interesting development, which in the long run changes the structure of both the mutual fund and the private financial advisor industries.
• The question of maturity is always relative. New web-start ups lure executives away from eBay and Yahoo. Only 7 years ago, staid old economy companies – GE, IBM, CA – lured lost people to the upstarts. Does this new development mean that eBay and Yahoo are both old economy companies now?
• And the Beirut stock market reopened for trade today. One of Beirut’s main indexes, the BLOM, closed 4.1% lower at 1,230.22.

Blogosphere

• Political Calculations discusses Greg Mankiw’s perspective on the Federal Funds Rate. Mankiw’s method is attractive in that it incorporates two of the economic factors that the Fed is chartered to influence through monetary policy: the rate of inflation (measured as 12-month change in the Consumer Price Index for Urban consumers, less food and energy) and the rate of unemployment.
• Voluntary exchange discussess the economics of World War I.  A book edited by Stephen Broadberry and Mark Harrison for specialists and folks interested in history discussess the economic factors behind the war.  The reviews are interesting here and here.

Education

• SmartEconomist talks with Stanford GSB professor Paul Oyer about management education and corporate executives. Also, an excellent review on MBAs and Investment Banking Education.

Weekend …

This morning’s email with a welcoming message from FinancialRounds has a couple of ideas for other finance blogs out there. Read the comment under my earlier post on Edublogging. Thanks, unknown colleague, for the friendly welcome!

Reading the blogoshpere, I came across one heckuva funny article today. Over at EconLog, there is a blog on the international marriage market and the price and equilibrium of legal “human” trafficking. This is another nail in the coffin for RussianBrides.com and its likes, but still does not explain the lack of YYYStuds.com. Oh, well. There is an untapped business opportunity for the entrepreneur in you.

The economics of drug-dealing and narcotrafficing is explored in GoingPrivate. But the funny story is about the “customer service experience” travellers receive at the airlines. Ok, EWR is notorious … Reminds me of an experience in Cleveland a good while back where the customer service representative belittled a passenger, who had a legit complaint and then called security on the person. I was witness to the whole episode and as many others there argue that the airlines have really lost touch with their customers and reality.

I spoke about RateMyStudents.com yesterday. As we all know from experiences our colleagues have had, course and teaching evaluations have evolved into an insidious weapon tenure committees abuse with pleasure. I know of at least several colleagues who have contemplated (not faced) the problem discussed in an article from the Onion. Remember the difference between contemplated and faced.

An a ranking of finance department’s teaching quality reveals surprising results. Way to go Jaime!