America is "selling the farm" to live "high on the hog"?

Forget the hog: that dream's gone, and the farm may not be far behind.

"Never underestimate the power of the superpsycho, hyper-spending American consumer. Where there is no cash, he will sell his soul. Or just charge it."

If you want to rise above this low opinion, here are 10 New Year's resolutions to prepare you to win in the coming 2008-2010 bear-recession:

1. Go contrarian.
2. Do it yourself.

"Believe nothing, no matter where you read it or who has said it, not even if I have said it, unless it agrees with your own reason and your own common sense."

3. Millionaires build wealth by working, not investing
4. Do what you love (or your boss will decide for you)
5. Plan to retire early: Much earlier than you expect
6. Downsize your lifestyle: Start by saving 15% of income
7. Buy no-load index funds: No brokers, no active managers
8. Invest long-term: Market-timing is high-risk gambling
9. Rebalance: Focus on picking allocations first, not funds
10. Live with gratitude: Life is a gift (so is your nest egg!)

Trust no one. Play it conservative, because 2008-2010 will repeat of the harsh lessons of the 2000-2002 bear-recession.

Ten resolutions to survive the bear market

Quietly, insiders are perusing an obscure paper by Fed staffers David Small and Jim Clouse. It explores what can be done under the Federal Reserve Act when all else fails.

"The kind of upheaval observed in the international money markets over the past few months has never been witnessed in history," says Thomas Jordan, a Swiss central bank governor.

The ECB's little secret is that it must never allow a Northern Rock failure in the eurozone because this would expose the reality that there is no EU treasury and no EU lender of last resort behind the system.

Crisis may make 1929 look a 'walk in the park'

Reputation, which plays a key role in almost any economic or social system, is a fundamental, but not well understood, aspect of online business transactions, peer production of information and knowledge, and exchanges within virtual social communities. Traditional modes of authentication, accreditation, reputation, and prior acquaintance with participants rely on the social norms of close-knit communities and the accountability of meeting face to face. Since these mechanisms usually do not apply to online environments, we have witnessed the development of alternative models for reputation management including third-party certificate authorities, peer-produced evaluations, ratings, stars, points, karma and others.

These new models, which apply to businesses, community-mediated information sources, people, goods, and services, challenge our accepted notions of identity, social capital, accreditation, expertise, and risk as they shift the reliance of reputation systems away from traditional business and social networks, educational backgrounds and institutional affiliations and towards the wisdom of the crowd. This shift, in turn, entails dramatic changes to information privacy, information quality, ownership and the ability of groups and individuals to affect these issues. Technology-mediated, cyber-reputation management is based on transactions in information that are often sensitive and always contextual. The data and information that are collected in online reputation systems are both valuable and powerful. The ability to control this information, store it, process it, access it, and transport it, are crucial to the maintenance of the reputation economy.

The symposium will seek to explore themes in individual reputation, business reputation, community-mediated information production, and the implications to democracy and innovation. The symposium, which will be open to the public, will bring together leading scholars from industry, academia and government to discuss the role of reputation in cyberspace.

See notes from the conference.

Symposium on Reputation Economies in Cyberspace

Oversized and overhyped, the world's biggest plane is here. Is the Airbus A380 the "most hideous airliner ever conceived?"

...

Granted, economy class on Emirates, or any of the other A380 buyers, is, how to put this, not the same as economy on Southwest or U.S. Airways, but steerage is steerage, and pity the poor slobs who, after crossing the ocean, have to march bleary-eyed through first or business class on their way out the door, glimpsing all they have missed, most of it now heaped on the floor: the full-size pillows and duvets; the champagne glasses and silver tea trays -- like a banquet room strewn with the remnants of orgy and feast.

Airbus Behemoth Leaves Room For Improvement

Walter Wriston died in 2005, but his new book ships at the end of this month.

The Internet has changed everything.

It is altering the way institutions, both public and private, are managed, and the way individuals react to one another, their workplace, and their government. From an economic and business perspective, the race to win is between those who "get it" and those who don't.

In Bits, Bytes, and Balance Sheets, Walter Wriston explores the consequences of the changes produced by the new economy of the Internet, defining the new rules and examining some of the promising initiatives under way to create a system of measuring and valuing assets that reflects our new economic realities.

A long-awaited follow-up to the author's Twilight of Sovereignty, this book shows that, in today's economy, intellectual capital is more important than physical capital -- and in fact, the very source of wealth and how it is created has changed -- and that businesses must adapt to this change or perish. Although he acknowledges that some of the "old" rules -- those based on human nature rather than economic dogma -- still apply today, Wriston also shows how the information revolution has radically affected business and government practices, as well as political policymaking throughout the world.

Despite the sweeping changes brought about by the "wireless revolution," the author argues against increased government regulation, instead making the case that we must count on a society of trustworthy people, and that it is not more laws that should form the basis for regulating the new economy but the personal ethics of good people.

Bits, Bytes, and Balance Sheets: The New Economic Rules of Engagement in a Wireless World

This is a handy tool, and it's one you aren't likely to find on a lender's web site.

From the accompanying article:

By the Realtors’ way of thinking, it’s always a good time to buy. Homeownership, they argue, is a way to achieve the American dream, save on taxes and earn a solid investment return all at the same time.

That’s how it has worked out for much of the last 15 years. But in a stark reversal, it’s now clear that people who chose renting over buying in the last two years made the right move. In much of the country, including large parts of the Northeast, California, Florida and the Southwest, recent home buyers have faced higher monthly costs than renters and have lost money on their investment in the meantime. It’s almost as if they have thrown money away, an insult once reserved for renters.

Most striking, perhaps, is the fact that prices may not yet have fallen far enough for buying to look better than renting today, except for people who plan to stay in a home for many years.

Is It Better to Buy or Rent?

How immigration has affected one former corporate executive.

Raymond Boyle: "I never thought this would happen to me ... Having a job gave me a sense of pride. Every week I brought home a check, I was able to feed the family ..."

Q: "And how much were you making?"

Boyle: "Eight hundred and forty thousand and a half percent share in the company."

Immigration: The Human Cost

This is sweet!

Check out income vs. life expectancy, for example.

The Gapminder World 2006, beta

Malcolm Gladwell's latest is now ready for you.

In this edition, he introduces you to the economic power behind separation of church and state. And also, why boom-bust is yin yang, and thus why the long boom was always bunk.

This relation between the number of people who aren’t of working age and the number of people who are is captured in the dependency ratio. In Ireland during the sixties, when contraception was illegal, there were ten people who were too old or too young to work for every fourteen people in a position to earn a paycheck. That meant that the country was spending a large percentage of its resources on caring for the young and the old. Last year, Ireland’s dependency ratio hit an all-time low: for every ten dependents, it had twenty-two people of working age. That change coincides precisely with the country’s extraordinary economic surge.

In other words, to unleash the wealth of nations, you must restrain the forces of nature.

Demographers estimate that declines in dependency ratios are responsible for about a third of the East Asian economic miracle of the postwar era; this is a part of the world that, in the course of twenty-five years, saw its dependency ratio decline thirty-five per cent. Dependency ratios may also help answer the much-debated question of whether India or China has a brighter economic future. Right now, China is in the midst of what Joseph Chamie, the former director of the United Nations’ population division, calls the “sweet spot.” In the nineteen-sixties, China brought down its birth rate dramatically; those children are now grown up and in the workforce, and there is no similarly sized class of dependents behind them. India, on the other hand, reduced its birth rate much more slowly and has yet to hit the sweet spot. Its best years are ahead.

The children may literally bury their parents, but if there are too many parents, they will bury their children, as well.

THE RISK POOL | The New Yorker

The public reaction, however, shows the depth of popular misunderstanding regarding the realities of our globalizing economy.

Globalizing Good Government