This Week's Carnival of Personal Finance

This week's Carnival of Personal Finance is up at Political Calculations. Like the last time he hosted it, he's done a great job of presentation. Here are my picks of the week:

In Family Tax Advice, Don't Mess With Taxes gives some year-end tax planning advice.

The Common Room provides some guidelines and danger signs that you might want to look at if you're a young couple just starting out in Greasing the Rungs on the Ladder of Life.

Dan Melson of SearchLight Crusade schools us on negative amortization loans in Regulators Toughen Negative Amortization Loans?

In one of my favorite recurring topics, Million Dollar Goal explains What Is the Efficient Market Hypothesis? what's more, he tells you why you should care and how it should effect your investing decisions.

Jonathan at MyMoneyBlog is going to try a free financial planning consultation with Ameriprise Financial Advisors. He wonders about their qualifications in What Does It Take To Work At Ameriprise Financial?. Full disclosure - I used to work at one of their predecessor companies 20 years ago.

Finally, Consumerism Commentary talks about how companies often give employees extra time to plan their year-end flex spending account activities in No Need to Panic About Flex Spending Accounts.

That's all for now. After you read these, take a look around the Carnival. Tastes and needs differ.

This Week's Carnival of The Capitalists

This week's COTC is up at Coyote Blog. In addition to hosting the Carnival, he's also taking the opportunity to showcase some of the Acme Company's products from RoadRunner/Coyote fame - very nice. As usual, here are my picks:

Anita Campbell at Small Business Trends is doing her annual trends series. She relays her conversation with futurist Watts Wacker and his forecast of trends we can expect to see in 2006.

Free Money Finance gives you 10 questions you should be asking about your retirement.

Here's one for the kids (in the hopes that they'll avoid some of the mistakes we made): Why Homeschool talks about early economics training for your kids, and gives some approaches for teaching them outside of the classroom.

Searchlight Crusade discusses privacy concerns over real estate and mortgage forms. He explains why (unfortunately) we don't have much choice about disclosing the information.

Retired at 30 announces the brand-new Carnival of Investing. It's focused on investing and personal finance. Be sure to check it out.

David Porter breaks down ARMs - Adjustable Rate Mortgages. It's useful information, particularly since interest rates are rising.

Financial Options has a summary of economic indicators for release next week, with commentary.

James Hamilton in Econbrowser takes another stab at the gas price "gouging" meme - as always, worth a read.

Finally, for all you "word nerds" like me, Wordlab looks at politically correct alternatives to "Christmas"

Look around - there's always lots of good stuff at the Carnivals.

Good Cartoon For Class

Here's a good cartoon to show the students before final exams:


HT: Bitch Ph.D.

Buying Used Gift Cards

I'm often amazed at how the Web has changed commerce by breaking down geographical barriers to trade (like eBay). Here's the latest - there's now a market for buying, selling, and trading gift cards.

They've been sold on eBay for some time, but according to a recent New York Times article, Several companies (cardavenue.com and SwapAGift.com, and Gift Cards Again are mentioned in the article, but there are others) have set up an online market for people to list gift cards for sale (or to swap) for stores ranging from Home Depot to Borders Books to Bed and Bath). The economics of the market are interesting, and pretty much what you'd expect):

• Transaction fees are paid by the sellers, and are usually a couple of bucks.
  
• The discount for the cards (the difference between the face value of the card and the offering price) is smallest for stores like Wal-Mart and Home Depot, since almost anyone can use cards at these stores. For less well know stores, there's a thinner market, so the discounts are larger. In fact, the Home Depot ones are often bought by contractors, who will certainly use them quickly.
  
• Most of the non-"top tier" store cards come at about a 10-15% discount.
• The best deals (i.e. the biggest discounts) come right after the big gift-giving holidays, like Christmas, Valentine's Day, and Mother's Day. Not too surprising, since the supply is greatest then.
  

Click here for the full article. And here for another article on this phenomena on MSNBC - it lists a few other sites and also discusses some potential problems with this practice.

Given the amount of use we get out of Barnes and Noble and electronics and toy stores, the Unknown Household will probably save some money by using these sites.

Failure, Secret Grades, and Incentives Matter

Since it's the end of the semester, I'm still dealing with grading exams (one full-blown one to grade and one multiple choice one to give and grade). So, I figure it's only a half-dozen more hours or so to go.

In the meanwhile, here's a good grade-related piece from BusinessWeek Online. It turns out that many of the top business grad schools either don't disclose students' grades or give the students the option of disclosing or not.

The practice started during the dot-com boom when students had their pick of jobs even without disclosing grades. Now, it gets rationalized in the usual ways - "it saves them from stigma", "it allows them to experiment without penalizing them", and so on.

The interesting thing to me is the unexpected effect that the policy has on performance - in cross-listed classes (those where both undergrads and grads can register), the undergrads often outperform the grads. Not too surprising - remove the sting of failure, and there will less effort on the part of the students.

So once again, incentives matter. Or, as Spenser (the Robert Parker detective) used to say, "Without death there is no beauty".

HT: Division of Labour

Three Economists Get Into A Cab

This sounds like the beginning of a joke:

Three economists get into a cab. They're each getting off at different places along the route. How should they split the bill?

It's not a joke but an everyday numbers dilemma, and it highlights some important economic principles. I asked several economists to solve the problem, and they came up with some unique approaches. One called on the work of game-theory pioneer John Nash (the inspiration for "A Beautiful Mind") to divide up the bill. Another referenced the ancient Jewish legal text, the Talmud.

It's actually the beginning of a piece in the Wall Street Journal by Carl Bialik (The Numbers Guy). It's an interesting question, since there's a savings to be had by cooperating (the cost of sharing the cab is less than the total costs the three economists would pay if they took separatecabs. Here's the question:

For the sake of this column, we'll stick with the case of a cab running on a meter, and we'll assume that all of the passengers are traveling in the same general direction -- some just live farther from the starting point than others. It's easy to apply the sharing schemes we devise to more complex scenarios.

Let's say that passenger A's usual fare would be $1, passenger B's is $5 and passenger C's is $9. If all three share a cab (and assuming A and B are allowed to hop out on the way to C's destination, without incurring any special fees), the total bill would be $9 -- rather than the $15 they'd have to pay, total, to ride alone. How should they divide up the cost of the shared $9 ride? Or, put another way, how do they share the $6 of total savings?

Before you check out the proposed solutions, what do you think is the fairest solution. Then read the article here (note: online subscription required).

As an aside, Yale's Barry Nalebuff (one of the economists mentioned in the article) has an excellent non-technical (i.e. almost math-free) book with Arvinash Dixit on game theory called Thinking Strategically: The Competitive Edge in Business, Politics, and Everyday Life. If you'd like to get a taste of what game theory's all about, it's as good an introduction as you're going to find.

WSJ.com - The Numbers Guy

Help Santa Fly

Here's something to brighten your day - see how far you can fling Santa across the ravine.

HT: Normblog

Weapon Retention Failure

And now that my latest exam is done, it's time for something completely unrelated to finance (but still pretty funny). I don't know if this is real or a very clever fake.

Weapon Retention Failure (From Uncommon Descent): "

It's Exam Week, and the Fat Lady's Clearing Her Throat

As I mentioned in a previous post, this is exam week. I've given one, and am currently giving a second one as I write.

The exam is an open-book exam for my Advanced Financial Management class. The class is about 70-80% case based, so an open book doesn't help the students as much as they think. But, they like it and I don't have to monitor them that much, so there's more time for blogging and other things during the exam (we have Wi-Fi throughout the college of business building, so access isn't a problem).

Only this exam to grade and one other to write, and it's time for a break. One of our two cars is on the fritz. We plan on ditching it (a story for another day) but won't be replacing it until after the holidays, so we get a pass on traveling north to see the family over the holidays. Instead we'll stay here and host a meal for some of the "orphans" (singles and childless couples without family in the area) from our church. In addition, the Unknown Mother In Law and Unknown Father In Law are coming to visit us after New Year's.

With all this, I'll still get a lot done, which is important since I'll be presenting a paper in January that still has a lot of work to be done before it's finished. As hard as I try, I can never get as much done on the road as I can at home.

That's all for now - time to make a short strafing run around the classroom.

This Week's Carnival of Personal Finance

This week's Carnival of Personal Finance is up at Wealth Junkie. Here are my usual picks of the week:

First off, there a couple of good tips on saving money on various purchases: In Deals, Josh Cohen at Multiple Mentality shares how he got some laptop accessories at a great price, and in Money Saving Tip: Buy Parts Yourself and have Mechanic Install Them, 2million shares how he shaved 63% off his car repair costs.

Next, there are a couple of good posts on electronic banking: ncnblog from No Credit Needed explains the process of online bill paying and shares some tips in Online Banking Questions Answered. In addition, TT from Retire at 30 shares how you can use electronic banking to cover all of your financial bases in Budgeting Made Easy 1 of 4: Electronically Pay Yourself First,

Third, there are a couple of good retirement-related posts: FMF at Free Money Finance discusses some key retirement planning issues in 10 Things You Should Ask Yourself About Retirement, Part 1. And, Amit at Not Broke looks at the features of Roth IRAs, in Roth IRA--one of the best retirement planning vehicles around.

Finally, Ironman at Political Calculations celebrates their one-year blogiversary by posting a master index to all the investing, personal finance, economics, politics and other unique tools its created over the past year in A YearÂ’s Worth of Tools. Lots of good stuff there, and kudos to Ironman for all his hard work.

As usual, check around - there's always lots of good stuff up at the Carnival.