Econbrowser: Inverted yield curve edges closer

This one's for the Finance and Economics Professors among my readers.

James Hamilton at Econbrowser is discussing how the an inverted yield curve yield curve is related to recessions (for those not familiar with the term, an inverted yield curve describes the pattern where rates on longer-term debt instruments are lower than those on shorter term instruments). He starts out by explaining the Expectations Hypothesis:

A very simple model known as the expectations hypothesis of the term structure of interest rates posits that investors don't particularly care which maturity they invest in, and as a result would always bid prices for different maturities so that the expected yield from rolling over securities of different maturities is identical.

He then goes on to explain how the Expectations Hypothesis doesn't fully explain the shape of the yield curve, and closes with some thoughts on how changes in the yield curve are related to expected recessions.

All in all, a good piece to give to your class for discussion the next time you teach about the term structure of interest rates. Click here for the whole thing.

Updated 11/30: Kash at Angry Bear also has a few thoughts on the subject, and a nice non-technical explanation of why the inverted yield curve is often followed by a recession.

Can Professor Pigskin Pick Stocks?

In the movie Grand Canyon, one of the characters says "The answers to all of life's questions can be found in the movies." He was wrong - actually, all the answers can be found in The Simpsons. Here's a great illustration of how random chance can produce what looks like superior forecasting:

Homer: Doh, the Broncos won! Why didn’t I bet on them like Professor Pigskin told me too?

Lisa: Who’s Professor Pigskin?

H: He’s a pig who can predict football winners in advance.

L: How is that possible?

H: Because he’s got something no gambler’s ever had. A System! I’ve got the pamphlet four weeks in a row and every time the pick of the week has been right on the money.

L: Ohhhh. I get it. Every week they send out two pamphlets, half picking one team and half picking the other. Eventually, there’s a small group of people who only receive the correct predictions and think Professor Pigskin is always right. That’s when they ask for your money.

HT: Blogging Wall Street.

I wonder if Professor Pigskin picks stocks?

This is similar to an example I regularly use in class to illustrate how quite a few mutual funds could end up beating the market five (or even ten years) running just by chance.

Now I'll use Professor Pigskin instead.

Tim Harford - The Undercover Economist

Tim Harford is one of the most interesting "popular" economists currently writing (by "popular" I mean those that have had some success in bringing economics to the masses). His regular column for the Economist called "Dear Economist" is one of my favorite reads. In it he answers common questions (like how to deal with an arranged marriage, or whether to save for the future) in a Miss Manners style using economic reasoning.

For those of you who enjoyed Freakonomics, I'd recommend his book"The Undercover Economist: Exposing Why the Rich Are Rich, the Poor Are Poor–and Why You Can Never Buy a Decent Used Car!" -- it's a great read, and would also make a good stocking stuffer.

Patri Friedman at Catallarchy has just posted an interview of Harford, which you can here.

I've Been Devolved!

Just when I had gotten used to living on dry land as an Adorable Rodent, the all-powerful NZ Bear decided to rework his ranking algorithms at The Truth Laid Bear. As a result, I've been devolved to a Flippery Fish.

Ah well, I've been meaning to get back to swimming regularly for exercise. All this does is accelerate the process.

This Week's Carnival of Personal Finance

Monday is Carnival Day! This week's Carnival of Personal Finance is up and running at Financial Fruition.

First, there are three pieces on budgeting and record keeping. In Budget Breakdown, Dawn at Frugal For Life provides the essential information on budgeting. In Budgeting Made Easy, Retire at Thirty provides another "budgeting primer" piece. Finally, in Poor Money Management, Cathy at CFO (Chief Family Officer) talks about having a monthly spending plan.

Dan from Searchlight Crusade continues his series on things to watch out when geting a loan in Games Lenders Play (Part IV).

In Unclaimed Property That'’s Rightfully Yours, Steve Pavlina works us through the process of searching for unclaimed property. It's worth it - I did this a few years ago and found a small account (about $50) that was owed to the Unknown-Mother-In-Law. It scored a few points for me.

Finally, Clint at Million Dollar Goal discusses How Taxes Affect Your Returns. Remember - it's the after-tax return that matters.

That's it for this week in the "money" carnivals.

This Week's Carnival of The Capitalists

This week's COTC is up at Gillblog. The posts that caught my attention this week include:

Free Money Finance has a lot of personal finance advice pulled together from a variety of sources.

Barry Ritholtz, at The Big Picture, is musing about how the President's suggested tax reform capping the mortgage deduction might affect various parties.

In two posts on hedge funds, James Hamilton, at Econbrowser, discusses risk and returns in hedge funds and shows once again that there's no free linch, while Professor Bainbridge tells us why he thinks hedge fund activism is overrated.

As always, look around - you might find other things you like.

SEC Admits SOX May Be Too Costly

The SEC is slow, but there are signs of hope that they are realizing the probles with Sarbanes-Oxley. This from the Wall Street Journal:

U.S. regulators may need to revisit internal-controls requirements for public companies if compliance costs remain high, according to Securities and Exchange Commissioner Cynthia Glassman.

In a recent speech in Denmark, posted on the SEC's Web site Friday, Ms. Glassman said she is concerned about excessive compliance costs associated with the requirement and raised the possibility of revisiting the rules, which were written by the SEC and the Public Company Accounting Oversight Board. She also said she would be "receptive" to recommendations to modify the internal-controls requirements for smaller companies, both in and outside the U.S.

Click here for the whole thing (online subscription required).

The good thing about regulators is that they regulate. That's also the bad thing - their bias is to step in with new regulations (even when not needed), since it gives them a reason for being.

Insider-Trading Charges Involve Early Copies Of BusinessWeek

This seems to happen every couple of years. Once again, someone found a way to profit by trading on the BusinessWeek magazine's 'Inside Wall Street' column before the column hit the streets:

A New York area man has been accused of insider trading based on prepublication copies of BusinessWeek magazine's "Inside Wall Street" column, according to court documents unsealed Wednesday.

...According to the criminal complaint, a witness said he met with Mr. Pajcin three to five times between September 2004 and November 2004 about a factory job in the Milwaukee area. Over the course of those meetings, he learned that Mr. Pajcin wanted someone to steal a copy of the publication prior to its public release, prosecutors said. The cooperating witness didn't take the job, but Mr. Pajcin informed him that "he had found someone at the 'plant' who was providing him with the publication prior to its release," according to the complaint.

Click here for the Wall Street Journal article (online subscription required).

Get More Education, and Make More Money (via Angry Bear)

Kash at Angry Bear has some analysis of a recent Financial Times story that drives home the point at the way to get ahead in this country is to get more education. He writes:

This reward to education has grown over time. For example, a Census Bureau summary of major economic trends in the US over the past half century reported that the median income of workers with at least a BachelorÂ’s degree was only 35% higher than those with only a HS diploma in 1963. By 1997 that premium had risen to 88%. And in 2003 the earnings gain from having at least 4 years of college was over 100% of a HS graduateÂ’s earnings, according to the data cited above.

Click here for the whole thing - it's a very interesting read.

Generosity Index and The Red State/Blue State Divide

Ah well, back from visiting family in the Northeast. Here's an interesting article (broight courtesy of TaxProf):

..The Catalogue for Philanthropy has ranked the fifty states on their relative generosity, comparing each state's average itemized charitable deductions with its average adjusted gross income (based on 2003 IRS data).

The 50-state ranking has a decided Red State-Blue State flavor: 28 of the 29 "most generous" states are Red States that voted for President Bush (including all 25 of the "most generous" states), while 17 of the 21 "least generous" states are Blue States that voted for Senator Kerry (including all 7 of the "least generous" states).

Click here for the whole thing.

I found the comments just as interesting as the piece itself (if not more so). There's a lot of discussion as to whether it's fair to exclude "state-provided" social programs in the calculation of philanthropy. I'd have to agree with the commenter that it's strange to take this tack, since philanthropy implies willing giving. In any event, it's a pretty interesting piece, and should provide some grist for your holiday conversations.

Strategies for successful dissertation completion (via Crooked Timber)

Eszter at Crooked Timber recently gave a talk at her discipline's annual meeting on strategies for completing your dissertation. Here are some of my favorites:

2. Keep track of everything you do by filing material (whether digitally or not) and by keeping a diary of progress in your research.

6. Do not be discouraged if you find another project that * sounds * like yours, chances are good that it is not. Often enough you will encounter projects that make you think your work has already been done. Before you get completely stressed out about this, check the details of the other project. In all likelihood it is different from yours in significant ways.

7. Keep a notebook of all of your ideas even if they seem tangential to the project. You never know when they will be helpful later whether for this project or another one.

There's lots more, too. Click here for the whole article.

How Not To Interview (via Econlog)

A group of graduate students have put together short clips of nine really bad interviews. They're pretty good examples of what not to do when interviewing for a job.

Their dissertation advisors obviously aren't working them hard enough - they definitely have too much time on their hands .

HT: Econlog for the link.

Game Theory In Movies (via Mahalanobis)

Q: What do High Wind in Jamaica, Crimson Tide, The Maltese Falcon, and The Gods Must Be Crazy, The Princess Bride, and A Beautiful Mind have in common?

A: They all have scenes that illustrate concepts studiedd in game theory.

Mahalanobis has a good post that provides an excellent resource for teachers of economics. In it, he discusses how these movies can be used to illustrate the concepts of Nash Equilibrium, Brinksmanship, Asymmetric Information, and the strategic rationality of (seeming) irrationality)

Click here for the whole thing.

Happy Thanksgiving

I'll be traveling tomorrow to visit my (and my wife's) families. Where we're staying doesn't have a good Internet connection, so blogging will be light (and possibly nonexistent) until Saturday.

Here's hoping y'all have a safe, happy, and enjoyable Thanksgiving. I know that we have much to be thankful for in the Unknown Household, and I'm sure many of you do too.

House Prices Show Sharp Appreciation

I'm cleaning out my file of things to blog on before driving half the length of the Atlantic coast to spend time with our families for Thanksgiving. Here's one item that's pretty interesting. There's a recent report from the National Association of Realtors (in PDF format) that indicates that housing prices continued to climb in the summer and early fall. In fact, 69 metropolitan areas reported double-digit increases compared with a year ago.

If only the bottom doesn't drop out before I sell mine.

Yak Shaving Razor

Joe Carter at Evangelical Outpost runs a regular series called Yak Shaving Razor. It covers a number of cool solutions for various problems, from how to change a Firefox setting to how to make sure you find your car in the parking lot. The latest installment is up here.

Curious what a Yak Shaving Razor is? Here's the definition:

Yak Shaving -- [MIT AI Lab, after 2000: orig. probably from a Ren & Stimpy episode.] Any seemingly pointless activity which is actually necessary to solve a problem which solves a problem which, several levels of recursion later, solves the real problem you're working on. (From the on-line hacker Jargon File)

Enjoy.

This Week's Carnival of Personal Finance

This week's Carnival of Personal Finance is up at Frugal For Life. As usual, here are my picks of the week:

Million Dollar Goal looks at the impact a small difference in costs makes when investing in Why Costs Matter When Investing

Old Niu shows how your net worth stacks up against others in your age group in What I’s Your Net Worth?

In two mortgage pieces we've mentioned previously, Searchlight Crusade gives us the ins and outs of different types of loans in Amortization: Fixed rate, Balloon, ARM and Hybrid Loans, and Pacesetter Mortgage talks about online mortgage rates in The Truth about Online Mortgage Rates.

Look around when you're done. There's a lot of other things there that I haven't mentioned. Tastes (and needs) differ.

This Week's Carnival Of The Capitalists

This week's COTC is up at Gongol.com. Finance related offerings include:

Financial Options: a heads up on forthcoming economics/finance news for the week

Abnormal Returns: there are a number of new options for taking advantage of seasonal stock market return patterns

Soccer Dad: gas prices have dropped back down without Congress doing anything about it - a nicely snarky piece.

Pacesetter Mortgage Blog: for all intents and purposes, there is no appreciable difference in rates from one internet lender to another!

Searchlight Crusade: APR is a misleading indicator of a loan's true cost.

The Big Picture: there's a hedge fund that's averaged 33% annual returns over the last 14 years.

Catallarchy: my favorite post for this week's COTC. It explains how drops in gas prices are due to oil companies' greed (huh?). I love arguments like this that are counterintuitive to non-economists (like politicians) until they're explained.

That's all for this week. As usual, look through the rest of the carnival when you have time. Your tastes (and mileage) may differ.

Time to grade some exams. Unfortunately my campus has

Shades of Gordon Gekko

According to Michael Douglas' famous character Gordon Gekko, "Greed is good". When post-Katrina gas prices skyrocketed, many commentators with little or no sense of economics attributed it to greed on the part of the oil companies.

Actually, they were right. However, this same greed that caused prices to rise also caused them to fall. Bill Cholenski at Catallarchy explains this about as well as anyone could:

...Greed has actually caused people to reduce prices. It sounds absurd, but think about it. With such “high” prices, anyone who sees fit to lower prices will gain market share. The world will beat a path to their door. Greedy oil companies are lowering prices, trying to steal customers away from each other - and it’s working.

Click here for the whole thing. Well done.

Around The Blogosphere

If the hotel doesn't fix their internet in the next couple of days, I might not be blogging much. So, here are a few things to keep you busy:

JLP at All Things Financial has some good advice on Financial Planning for Generation X.

John Quiggan at Crooked Timber discusses "self-plagiarism", defined as occurring " occurs when an author reuses portions of their previous writings in subsequent research papers."

J Henderson at the Mises Economics Blog takes some shots at the recent Wallm Street Journal Article defending Sarbanes Oxley.

The Smart Economist reviews an article on the role of reputation in internet auctions.

That's all for now. I've emptied my RSS aggregator, had my caffeine, and am ready to see some papers presented at SFA.

Southern Finance (continued)

I arrived at the Southern Finance Meeting only a little worse for wear. Unfortunately, the airport in Key West can't handle a jet, so the last leg of the trip involved a short flight from Miami on a little "puddle jumper" (a prop plane), which I always hate.

The hotel hasn't yet gotten their internet access up, so I went out to a local internet cafe. It turns out that the hotel only reopen two days ago after the latest storm. So, I doubt that they'll get their access up anytime soon, and blogging will probably be sporadic for the next couple of days.

At least it looks like tropical storm Gamma won't be coming anywhere near here. So things are looking up.

Off To Southern Finance

Well, I'm off to the annual Southern Finance Association meeting in Key West. It's usually one of my favorite meetings because it's pretty low key, and there are lots of opportunities to catch up with old friends. There's (supposedly) broadband at the hotel, so I may do some blogging.

There's a tropical depression ("Gamma") to the south, but it looks like it'll miss the conference. If not, things could get interesting.

This Week's Carnival Of The Capitalists (The College Edition)

This week's COTC is hosted by Jeff Cornwall at The Entrepreneurial Mind in one of the most creative presentations of the Carnival yet. I don't have time to go through the entire "course catalog", so I'll recommend a few interesting "classes":

voluntaryXchange has a provocative post that uses post-Katrina New Orleans to examine the root causes of crime.

Econbrowser reports on an exchange during the recent Senate hearings on Big Oil. I particularly liked the rancher's response.

View From a Height and Drakeview (in separate posts) summarize recent venture capital trends.

Abnormal Returns compares and contrasts two new investment books - both written by seasoned investment professionals, very different in their approaches, and worth a read (or two).

Fat Pitch Financials introduces his good friend EDGAR (the SEC's on-line filing system) and explains how he can help you research companies.

Mover Mike explains the linkages between the SEC, naked shorts, and grandfathers. That's either a very good teaser or a very bad mental image...

Searchlight Crusade discusses pros and cons of different home mortgage instruments- fixed rate, baloon, hybrid, etc...

As usual, look around. These are ones that caught my eye, but you might find something else you like (or come across a new blogger to add to your list).

Student-Run Finance Blogs

I'm always on the lookout for new finance-related blogs that are run by academics. As I've lamented many times, there simply aren't that many.

But, here are a couple of interesting ones run not by professors, but by students. Since it's a worthwhile endeavor, I thought they were worth highlighting.

The first, Shai Dardashti on Grahamian Value is run by a U. Of Maryland student and is devoted to value investing. Being at UM, he'll get good training (he's a finance major, and they have an absolutely outstanding department there), and the blog should give him a lot of visibility. He's off to a good start, and has a lot of interesting links to value-investing resources.

The second, Fiscal Times, is run by two students (at Cornell and Princeton). They've only been doing this for a short while, but they seem ambitions and also have some interesting posts up there.

Running a blog is costly (in terms of time and effort) if you want to do it right. But, it has many benefits. First, if it's any good, it will give you exposure, which is very important when you get out on the job market. Second, if you're going to update it regularly, it will force you to keep up with the market in particular and with current events in general. This can only help you when you get to the interview stage. Finally, putting things down on "paper" forces you to think (and communicate) clearly. We think we understand something, but once we write it down, we often find out we don't.

good luck (and good blogging), gentlemen.

SEC Investigates Back-Dated Option Grants

According to Friday's Wall Street Journal, it seems that the SEC is investigating some companies for playing games with their option grants.

In a call option, the holder has the right (but not the obligation) to purchase the stock at a set price during a given time frame. As a result, we call an option a "derivative" security, since its value is derived from the value of some other asset (or security). If the value stock price increases, so does the value of the option. This means that an employee who holds a call option on their company's stock has an incentive to take actions that increase the firm's stock price.

Here's an example that might make this point clearer: A March 1, 2006 call option with an exercise price of $40 would give the holder the right to purchase a share of stock at $40 up until March 1. As long as the stock price is greater than the exercise price, the option is said to be "in the money". In this case, if the stock was currently selling at $45 a share, the holder of the option could exercise it, buy the stock at $40, and harvest a $5 profit.

Most executive options are issued "at the money" with a term of around three years. In other words, they are issued with an exercise price (also commonly called the "strike" price) that's equal to the current stock price, and the opion can be exercised after three years' time. So, if the stock price goes up, so does the value of their options.

Here's what apparently has the SEC concerned - it sems that some companies are "back-dating" their options. Let's take an example where the company's stock price was $40 on October 1 and $50 on November 1. Then, assume that the company granted options to their executives on November 1, but back dated the options to October 1. Since the options are issued "at the money", they would therefore have an exercise price of $40, giving the option holders an immediate profit of $10.

To read the Friday's Wall Street Journal article on this, click here. If you don't have a subscription, you can also read this one in CFO magazine.

This issue is interesting for a couple of reasons. It's a classic example of an agency problem where managers take advantage of shareholders. Second, they involve some disclosure issues - for obvious reasons, the companies involved don't give the "proper" date of these option grants. So, I wouldn't be surprised to see lawsuits in the ner future. Finally, they explain one of the more interesting patterns that academics have already observed - that stock prices often drop before option grants, and rise following them. This pattern makes a lot more sense if management can game the system by back-dating the options to the optimal date.

The WSJ and CFO Magazine articles mention the work of two academics who've studied stock price reactions around option grants - David Yermack and Erik Lie. You can find working paper versions of Yermack's work here and Lie's here.

Adam Smith's Lost Legacy: 'Wage Gouging' Exposed!

Here's a pretty ironic piece: 'Wage Gouging' Exposed! (courtesy of Adam Smith's Lost Legacy).

Advice On Writing Research Papers

If you're not an academic, you might want to skip this one. If you are, read on - it's worth it.

John Cochrane (one of the biggest names in Finance) has some excellent tips for graduate students on how to write a paper. Here are some of the best tidbits:

• Write out the one central, novel contribution of your paper - in one paragraph
• Write in "triangular" style - the main result first, followed by additional details
• Be concrete
• Don't put a literature review in your introduction. And when you do your lit reviews, make them brief - give enough info so that the reader can frame your paper among the 2 or 3 closest papers and see how it fits in.
  
• In the results section, start with the main result
• Document what you did and how you did it enough that someone else can replicate i

Finally, "keep in mind what your reader knows and what he doesn't".

There's lots more. Click here for the entire thing.

HT: Newmark's Door.

Insider Selling By Homebuilders

I haven't posted anything about the housing bubble lately. Also, if either of the jobs I've recently interviewed for pan out, we'll be moving, so , I guess I'm due. .

Here's an interesting fact (from Dallas Morning News Columnist Danielle Dimartino:

In the last six months, homebuilders have sold, on average, $347 for every dollar they've spent purchasing their own stock. Compare that to all industries, where insiders have sold $31 in stock for every dollar they bought.

Mr. LoPresti said July was the key month for homebuilder shareholders to watch what insiders were doing with their own shares.

"In July alone, homebuilding insiders liquidated 4.8 million shares of stock, the largest number in history, raising $333 million," Mr. LoPresti said.

The last time homebuilder insiders were this aggressive was May 1991, when they sold off 3.1 million shares in one month. This was followed by a 27 percent decline in homebuilder stocks over the next four month

Click here for the whole piece.

HT: Calculated Risk for the link.

As I've mentioned before, insider sales are typically much less informative than insider purchases. However, the magnitude of the selling is pretty impressive.

Fun With Do-It-Yourself

We wanted to move our main computer (the one the router's attached to) to a different room.

Unfortunately, the room we chose didn't have a cable outlet. So, my next-door neighbor said, "No problem, UP - I can drill a hole and run a new one to that room."

This is a long-winded way of saying that we're having computer problems at home and can't get online from there, so blogging from home may be light for the next few days until we fix the problem.

Tomorrow, I'll be at the office, and will post from there (I dropped by the library to do this one).

Academic Job Market Advice (via Madisonian.net)

Mike Madison at Madisonian.net provides some on-target advice for new job candidates in the academic market. He's gearing it towards law school jobs, but most of it also applies to finance/econ jobs. Here are some of his best tips:

Tip #1-A — Be familiar with the scholarship of faculty members of the interviewing school who write in your field, especially if those faculty members are on the interview team. Know what buttons you’re pushing when you make certain arguments, because you may get push-back from the author of the responsive argument, who is sitting in the room with you.

...Tip #1-C — Do not get defensive if someone attacks your work or your ideas. Engage! These interviews are often tests of your ability to have a charged but thoughtful scholarly dialogue, not tests of who is right and who is wrong.

Tip #1-D — Anticipate the inevitable academic’s question: “So, what are you working on now?,” and know that it refers not only to the draft that you mentioned on your CV, but also to the piece that comes next, and why.

Tip #2-A — The softball interview can be deceptive. Social fit matters to a lot of law faculties just like it matters to law firms. Stay on your toes, and don’t undersell your scholarly interests even if you’re not asked about them directly.

Tip #3 — Despite the fact that this is a ruthlessly competitive environment, be courteous to absolutely everyone you meet. In the best of all worlds, you will get the law faculty appointment of your dreams, and you can put the meat market unpleasantness safely behind you. Still, your scholarly reputation across the profession will begin at the Marriott Wardman. You will encounter many of your interviewers and many of your fellow candidates in the future, as colleagues at other law schools. Give each of them every reason to respect you when they see you or hear about you again.

He's got lots of other good advice, too. You can read it here.

I'd definitely second #3. Never show "attitude" to anyone. Almost every academic subdiscipline is a pretty small pond - if you act like a jerk to one person, you never know who they know (and who the people they know know).

I view the inital foray into the job market like a "coming out party". You get introduced to a lot of people at a lot of schools, and you'll also meet a lot of your "competition". Some of the other candidates I met during my first foray into the market are now among my closest friends. In fact, one of them was responsible for getting me an interview at one of the schools I'm currently taklking about.

So, you never know, and it pays to play nice with the other kids in the sandbox.

This Week's Carnival of The Capitalists

This week's COTC is up at Part Time Pundit. Here are a couple of pieces I liked:

Michael Cale of Financial Methods is talking about inflation-protected Treasury Securities in I-Bonds Yield Higher Than Treasuries. These securities have a current yield north of 6.5%, which is higher than any other money-market instrument.

Abnormal Returns gives us Emerging markets hoopla. He discusses academic research showing that higher economic growth isn't necessarily a precursor to higher stock market returns.

James Hamilton of Econbrowser talks about Oil Company Profits. He notes a puzzling pattern - that much of the oil companies' investments are for replacement of existing equipment rather than for new exploration.

As always, look around. You might find something you like.

This Week's Carnival of Personal Finance

As usual, Monday is Carnival Day. This week's Carnival of Personal Finance is up at Blueprint For Financial Prosperity. Here are some of this week's notable ones:

FMF at Free Money Finance will be discussing a recent article in Kiplinger's on retirement savings. In the first installment, he presents Seven Ideas for Maximizing Retirement Savings, Part 1.

All of us carry baggage from our childhoods --some good, and some bad. Nina at Sitting Pretty talks about some of the important financial lessons she learned from her childhood in a post titled ‚“Catch of the Day”

You won't need this if everything goes smoothly, but I'm a firm believer in Murphy's Law. In case it holds, David Porter at Pacesetter Mortgage Blog presents How to handle a complaint with a Mortgage Lender or Mortgage Broker.

A lot of people sequentially transfer credit card balances to avoid interest charges. Cap of StopBuyingCrap (hey, that rhymes...) shares some of the things you should watch for if you are considering about 0% balance transfer offers.

Dan Melson at Searchlight Crusade presents Credit Reports and Credit Score Manipulations

JLP of All Things Financial has been tkaking a tax class. Here he discusses ways to get Uncle Sam to pay for your college education.

That's all for now. As usual, look around -- tastes differ, and there's a lot of other good things up at the Carnival.

Blogging - Light

Blogging's been light because I made the mistake of upgrading Firefox (at which point it ceased working). So, no internet availability until I deleted every last trace Firefox from my system then reinstalled it. Finally, I'm back up and running.

But, yesterday also had it's bright spots - The Unknown Wife went to a ladies retreat at our church that took all day, so I got to spend a lot of time with the Unknown Son (age 7) and the Unknown Daughter (age 5). After morning swimming (actually, more like "splashing") lessons, we went to see Wallace and Gromit - the Curse of the Were-Rabbit. I'd recommend the film to anyone looking for a smart kids movie. There were a couple of scary parts that resulted in my daughter ending up in my lap (she didn't catch the satire), but in general it was pretty good.

Some of my friends are huge W&G fans. Now I can see why - the movie is ostensibly written for kids, but there's a whole other level of humor playing out that's aimed at grownups - like in the Veggie Tales or Shrek videos. This one looks like a keeper to actually buy for the collection.

In case you'd like to see more Wallace and Gromit, there's a DVD of short films out - Wallace & Gromit's Cracking Contraptions.

Questions About Grad School

Once or twice a year, a student expresses an interest in grad school. I've thought about putting together answers to frequently asked questions. But since it only happens occasionally, it was never worth the effort. Now, I don't have to, since someone els has already done it.

Mike Moffatt at About Economics has put together an excellent series of pieces on graduate school. While he's focusing on economics Ph.D programs, I'd say that about 90% of what he says is also relevent for students considering a Ph.D in Finance. Here they are:

In Choosing A Graduate School in Economics, Moffat provides general advice, but also gives links to several other resources, like this collection of advice on applying to grad school from Stanford and this one from Georgetown University.

In Economics Grad School Atmosphere, he points out the importance of the relationships between students and faculty in grad school (and of the relationships between students). After all, it's not unusual to spend 70, 80, or 90 hours a week around the department (and the average time to completion in grad school for econ and finance is probably 5 years), so being around people you don't like is plain foolish.

Finally, in Books To Study Before Going To Graduate School In Economics, he suggests some excellent books to read prior to starting grad school. Since most good finance programs give their students a solid grounding in microeconomics, mathematics, and econometrics, they're also pretty good recommendations for soon-to-be finance Ph.D. students.

I love it when someone does my work for me.

Best Ads On TV

Here's a little something you might find amusing - Best Ads On TV. They have an archive of hundreds of TV ads. There - now go waste some time.

Are Oil Company Profits Too High? (via Knowledge Problem)

Are oil companies making "Windfall Profits"? Lynne Kiesling at Knowledge Problem has a nice roundup on this and other oil-related issues, like how much profit is too much, what's the role of prices, and so on. Click here to read it.

This Week's Carnival of Personal Finance

This Week's Carnival of Personal Finance is up at Wealthyweb. My favorites for the week are:

In Online Banking Security, Five Cent Nickel describes the measures that banks must now take regarding online transactions.

Blueprint for Financial Security provides an Introduction to I-Bonds and Treasury Direct.

Flexo at Consumerism Commentary talks about the lack of competiveness in the real-estate industry in Commissions Still High

Free Money Finance discusses the question Invest or Pay Off Debt? There are virtues to each path.

2 Million got bad news - 0% balance transfers have negatively affected his credit.

Dan Melson at Searchlight Crusade presents Being Realistic Saves Money on your Mortgage

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