Who knew that selling so many copies of "Flipping for Dummies" would be their own undoing?

The credit crisis engulfing America’s banking system yesterday threatened the independence of Borders, the retailer of books and DVDs, which put itself up for sale and admitted that it had been forced to seek emergency funding.

Borders, which yesterday reported annual sales of $3.8 billion (£1.9 billion) for 2007, said that it had appointed JPMorgan Chase and Merrill Lynch, the Wall Street investment banks, to “explore strategic alternatives”, including a sale of the entire company or a break-up.

Credit crisis forces Borders into sale talks

Shoppers are discovering an upside to the down economy. They are getting price breaks by reviving an age-old retail strategy: haggling.

A bargaining culture once confined largely to car showrooms and jewelry stores is taking root in major stores like Best Buy, Circuit City and Home Depot, as well as mom-and-pop operations.

Even at Megastores, Hagglers Find No Price Is Set in Stone

1. Don't smile
2. Stand your ground
3. Tell the truth
4. Agree when it's unexpected
5. Don't point fingers
6. Make up a list of handy excuses
7. Change your mind whenever you want to
8. Keep things short and sweet
9. Don't engage
10. Get your 'no' in quickly

Time to get tough: How being nasty can improve your life

Urban economists understand housing prices with a spatial equilibrium approach that assumes people must be indifferent across locations. Since the spatial no arbitrage condition is inherently imprecise, other economists have turned to different no arbitrage conditions, such as the prediction that individuals must be indifferent between owning and renting. This paper argues the predictions from these non-spatial, financial no arbitrage conditions are also quite imprecise. Owned homes are extremely different from rental units and owners are quite different from renters. The unobserved costs of home owning such as maintenance are also quite large. Furthermore, risk aversion and the high volatility of housing prices compromise short-term attempts to arbitrage by delaying home buying. We conclude that housing cannot be understood with a narrowly financial approach that ignores space any more than it can be understood with a narrowly spatial approach that ignores asset markets.

Arbitrage in Housing Markets

It's not so much that there's something special about founders as that there's something missing in the lives of employees.

You Weren't Meant to Have a Boss

Four years ago, an academic economist named Ben Bernanke co-authored a technical paper that could have been titled “Things the Federal Reserve Might Try if It’s Desperate” — although that may not have been obvious from its actual title, “Monetary Policy Alternatives at the Zero Bound: An Empirical Investigation.”

Today, the Fed is indeed desperate, and Mr. Bernanke, as its chairman, is putting some of the paper’s suggestions into effect. Unfortunately, however, the Bernanke Fed’s actions — even though they’re unprecedented in their scope — probably won’t be enough to halt the economy’s downward spiral.

...

I used to think that the major issues facing the next president would be how to get out of Iraq and what to do about health care. At this point, however, I suspect that the biggest problem for the next administration will be figuring out which parts of the financial system to bail out, how to pay the cleanup bills and how to explain what it’s doing to an angry public.

Betting the Bank

When Herb Kelleher was brainstorming about how to beat the traditional hub-and-spoke airlines, he grabbed a bar napkin and a pen. Three dots to represent Dallas, Houston, and San Antonio. Three arrows to show direct flights. Problem solved, and the picture made it easy to sell Southwest Airlines to investors and customers.

Used properly, a simple drawing on a humble napkin is more powerful than Excel or PowerPoint. It can help crystallize ideas, think outside the box, and communicate in a way that people simply “get”. In this book Dan Roam argues that everyone is born with a talent for visual thinking, even those who swear they can’t draw.

Drawing on twenty years of visual problem solving combined with the recent discoveries of vision science, this book shows anyone how to clarify a problem or sell an idea by visually breaking it down using a simple set of visual thinking tools – tools that take advantage of everyone’s innate ability to look, see, imagine, and show.

THE BACK OF THE NAPKIN proves that thinking with pictures can help anyone discover and develop new ideas, solve problems in unexpected ways, and dramatically improve their ability to share their insights. This book will help readers literally see the world in a new way.

From an interview with the author:

The interesting thing now in business schools, you hear the phrase “the MFA is the new MBA.”

The Back of the Napkin: Solving Problems and Selling Ideas with Pictures

Fashion facilitates economic growth by providing consumers twin opportunities: to periodically liquidate their dated fashion goods, especially those that may have been consumption mistakes, as they abandon old fashion rules and adopt new ones; and to consume alternative goods that, thanks to standardisation, cater for the varying risk preferences of consumers. This process may seem wasteful from a static account, but it is dynamically efficient in the promotion change and re-coordination that eventually registers as economic growth. Rather than being merely a feature of bourgeois leisure, engaging with fashion trends might be better understood as a process of creative destruction that works through social pressure to provide a fresh and self-regulated impetus for consumer learning. Fashion cycles work to periodically loosen accumulated constraints on the demand side, facilitating economic growth and personal development. Fashion is part of how economies evolve, not of how they decay. It is another name for consumer entrepreneurship: and the more we have of that, the better.

Fashionomics

Brad DeLong:

To what extent are rich countries obligated to open their markets to poor countries when the consequence is falling wages for the poor in the rich--bearing in mind that the poor in the rich are often wealthier and have more opportunity than the rich in the poor? To what extent do rich countries do themselves well--serve their national interest--by opening their markets to poor countries even when the consequence is falling wages for the poor in the rich?

Free Trade and Fair Trade

WERNER HERZOG: Walking out of one of your films, I always had the feeling—the sense that I’ve seen a movie, that I’ve seen something equivalent to a feature film. That’s very much the feeling of the feature film Vernon, Florida or even the film with McNamara—The Fog of War. Even there I have the feeling I’ve seen a feature, a narrative feature film with an inventive narrative structure and with a sort of ambience created that you only normally create in a feature film, in an inventive, fictionalized film.

The new film that I saw, Standard Operating Procedure, feels as if you had completely invented characters, and yet they are not. We know the photos, and we know the events and we know the dramas behind it. And yet I always walk out feeling that I have seen a feature film, a fiction film.

ERROL MORRIS: Yeah. The intention is to put the audience in some kind of odd reality. [To moderator] Werner certainly shares this. It’s the perverse element in filmmaking. Werner in his “Minnesota Manifesto” starts talking about ecstatic truth. I have no idea what he’s talking about.

But what I do understand in his films is a kind of ecstatic absurdity, things that make you question the nature of reality, of the universe in which we live. We think we understand the world around us. We look at a Herzog film, and we think twice. And I always, always have revered that element. Ecstatic absurdity: it’s the confrontation with meaninglessness.

Errol Morris talks with Werner Herzog | The Believer