Bluematter.

US ancestor statistics and more on Visualizing Economics

The crucial question: does war spending purchase a final good and hence belong in GNP, or an intermediate good and hence not belong?

If you find this sentence even remotely interesting, click through and you won't be disappointed. Here's the abstract, complete with Von Mises quote:

Relying on standard measures of macroeconomic performance, historians and economists believe that “war prosperity” prevailed in the United States during World War II. This belief is ill-founded, because it does not recognize that the United States had a command economy during the war. From 1942 to 1946 some macroeconomic performance measures are statistically inaccurate; others are conceptually inappropriate. A better grounded interpretation is that during the war the economy was a huge arsenal in which the well-being of consumers deteriorated. After the war genuine prosperity returned for the first time since 1929. “War prosperity is like the prosperity that an earthquake or a plague brings.” —Ludwig von Mises

And here's another interesting paragraph (more planes than tanks?):

From mid-1940 to mid-1945 munitions makers produced 86,338 tanks; 297,000 airplanes; 17,400,000 rifles, carbines, and sidearms; 315,000 pieces of field artillery and mortars; 4,200,000 tons of artillery shells; 41,400,000,000 rounds of small arms ammunition; 64,500 landing vessels; 6,500 other navy ships; 5,400 cargo ships and transports; and vast amounts of other munitions. Despite countless administrative mistakes, frustrations, and turf battles, the command economy worked. But, as always, a command economy can be said to work only in the sense that it turns out what the authorities demand.

Model highly paid workers (CEO-types, bonus-driven investment bankers, highly skilled professionals, etc) as a different factor of production to not-so-highly paid workers (e.g. manual labour, inexperienced workers, etc).

In light of this information, discuss the following statement:

If we raise taxes on the highest paid workers, wages will adjust so that some of the burden falls on lower paid workers (as well as consumers, capital, etc, etc.)

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Beautiful Birdseye Pictures of London by Night

Volunteer abroad and gain a broader view of the world

Ferrari V4 motorcycle concept

More creative concept car designs

Job voyager visualizing employment distribution over the past century (fancy flash search)

More color pictures from the Great Depression

The ultimate who-owns-who in the motor industry

A humorous short film about career prospects in finance.

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Defining natural beauty from Natural Geographic

Progress, South American style

Tornado forming during football game

1696-1851. The Pharaohs would not have approved.

Volkswagen’s shares more than doubled on Monday after Porsche moved to cement its control of Europe’s biggest carmaker and hedge funds, rushing to cover short positions, were forced to buy stock from a shrinking pool of shares in free float.

VW shares rose 147 per cent after Porsche unexpectedly disclosed that through the use of derivatives it had increased its stake in VW from 35 to 74.1 per cent, sparking outcry among investors, analysts and corporate governance experts.

Shares in VW closed up €309.15 at €520, giving it a market capitalisation of €153bn, more than all the other US and European carmakers put together.

The FT has the full story, hat tip MR.

Merv is surprised a hedge fund hadn't pulled this one over other hedge funds in the past (although granted, it would need to be on something smaller than VW). I am surprised too, but who knows - maybe someone somewhere has just updated their bag of tricks.

Does any reader know what happens if you have borrowed shares to short and *can't* give them back?

Postscript: There's something about the commentary on the financial crisis that reminds me of sports interviews; firstly, the lack of content and repetition of cliches, secondly the use of language:

“This was supposed to be a very low-risk trade and it’s a nuclear bomb which has gone off in people’s faces,” said one hedge fund manager.

If it's a nuclear bomb it doesn't need to go off in your face, and if it goes off in your face it doesn't have to be nuclear.

This beautiful image comes courtesy of W. J. Youden.

I've been reading Edward Tufte's superb The Visual Display of Quantitative Information - perhaps the most perfect book I've ever come across. Almost every page is a revelation, so expect me to be posting more of the wonderful graphs Tufte has collected in the future.