How a bank is SUPPOSED to make money...

This site has a VERY nice explanation of what happens when you deposit money in a bank.  Lots of AP Macroeconomic concepts---the fractional banking system, required reserve ratio, money multiplier, etc.  Worth a read if you have ever wondered how the banking system functions (minus the shenanigans)...

"Meet the Average Family"---financially, that is...

We don't save enough! No surprise there.  I like to teach the "80%, 10%, 10%" method of financial success.  Of the income you earn, you should try to live on 80%, save 10% (in a 410K preferably), and donate/tithe 10%.  This last 10% is the most important for me.  Make the personal decision as to where you want that money to go: church, charity, foundation, directly to other people, etc (I try to hit all of these, the best I can).  When I started to do this, I found my outlook on life change and became a much less selfish person.  I believe it is true that you get back much more when you give.  That is my two cents worth---probably inflated by a penny...

VisualEconomics

Jackson Pollock Creates a PPT for the US Military---Who says art and war don't mix...

When are the testifiees going to change seats with the testifiers..

When are the testifiees going to change seats with the testifiers..

Gary Varvel via Carpe Diem

Yes!! First off-shore windmill farm approved!! Err...maybe not...

Regulators Approve First Offshore Wind Farm in U.S.

YES!! Alternative energy is coming to Martha's Vineyard in Massachussettes...

"After nine years of regulatory review, the federal government gave the green light Wednesday to the nation’s first offshore wind farm, a highly contested project off the coast of Cape Cod...

Oppps...not so fast...

""But the project is hardly shovel ready. Several regulatory hurdles remain, and opponents of the wind farm have vowed to go to court, potentially stalling Cape Wind for several more years...Audra Parker, president and chief executive of the Alliance to Protect Nantucket Sound, said that several groups would go to court to halt the project. While the permit is “a significant piece of the puzzle,” she warned, other pieces must still be put in place to get the project under way.""

MIMBY---Not in my backyard...

Super Model Gisele moves next to Al Gore on "Do as I say, not as I do" Street...

Nice house Gisele...Honorary UN Environmental Ambassadorships obviously don't come with any understanding that you should somewhat live within the principles you are advocating....I am not against big houses, but am against big egos that tell me to take the stairs and then install an escalator in your house...Live your principles (at least a little bit), then I am open to discussion...Call me, Gisele... :)

Home Field advantage

What kind of U.N. environmental ambassador builds a 20,000 square-foot home with a six-car garage, an elevator and a lagoon? Why, that would be the Hub’s favorite Pats fan, Gisele Bundchen!

And a paparazzo’s sneak pics of Bundchen and hubby Tom Brady [stats]’s gargantuan new Brentwood, Calif., chateau has green activists seeing red.

“How big a space do two people need?” asked Philip Dowds, a Massachusetts Sierra Club official and professional architect. “A 20,000 square-foot house - the resources that it takes to put it together and the land that it needs, this just can’t happen anymore.”
According to photos taken by Los Angeles shooter Alec Byrne, who said he got a peek at the blueprints, the new West Coast lair of the Patriots [team stats]’ star quarterback and his glam wife will feature amenities including:
a wine bar and gallery
a six-car garage
a service kitchen and butler room
a pool house and lagoon-shaped swimming pool and spa
a recreation room with 19-foot ceiling.
And the manse will have an elevator - even though that seems to contradict environmental advice Bundchen offers on her own Web site to “take the stairs.”
“In addition to exercising, you save the electric power of the elevators,” she says on giselebundchen.com, which is currently festooned with references to Earth Day.
It’s not the first time Bundchen has taken flak for being less than fabulously energy efficient. Last year, shortly after being named to her U.N. post, the Herald’s Inside Track revealed the supermodel enjoys piloting a private helicopter.
Meanwhile, their new two-story Mediterranean-style home could end up costing the couple $21 million, according to estimates.
“The path of trophy homes is doomed to fail,” said Dowds, noting the home could comfortably accommodate 12 or 13 average American families. “And I mean fail on a very large and planetary sense.”

Some of the most popular/successful songs are played in only 4 chords---are we this gullible???

Some of the most popular/successful songs are played in only 4 chords---are we this gullible???

If you are having a debate about the nerdiness of a TV show, you might be a nerd...

Exploring the Complexities of Nerdiness, for Laughs

...Three years later some scientists still say that although the series, “The Big Bang Theory” (Monday nights on CBS), is funny and scientifically accurate, they are put off by it.
“Makes me cringe,” said Bruce Margon, an astrophysicist at the University of California, Santa Cruz, explaining, “The terrible stereotyping of the nerd plus the dumb blond are steps backwards for science literacy.”
But other scientists are lining up for guest slots on the show, which has become one of highest rated comedies on television and won many awards. The Nobel laureate George Smoot of the University of California, Berkeley, and the NPR Science Friday host Ira Flatow, have appeared on the show....

The mortgage meltdown---it is Economics teachers fault!! I take full responsibility....

The mortgage meltdown---it is Economics teachers fault!!  I take responsibility..Well, not entirely my fault, but if I were paranoid, the implication is clear...

Did financial illiteracy contribute to subprime crisis?

...To translate that back into English, borrowers with the most financial literacy were two-thirds less likely to be in foreclosure than borrowers with the least financial literacy. That result remained even after controlling for demographic characteristics such as education and income and the specific mortgages both groups signed. Bottom line: "Twenty percent of the borrowers in the bottom quartile of our financial literacy index have experienced foreclosure, compared to only 5 percent of those in the top quartile. Furthermore, borrowers in the bottom quartile of the index are behind on their mortgage payments 25 percent of the time, while those in the top quartile are behind approximately 10 percent of the time."

What seems to be happening here is not that folks who are financially illiterate choose worse mortgages so much as folks who are financially illiterate make more financial mistakes once they have their mortgages. Either way, it's a reminder of the extraordinary asymmetry of information that stands between borrowers and lenders. You can download the full paper here (pdf).

Some assembly required...Watch the building/assembling of a Boeing 747 in 2.5 minutes...

Watch the building/assembling of a Boeing 747 in 2.5 minutes...(HT:CafeHayek)

Research says you can nap in school now...

But WAIT until after MY class so the "science" can take effect...
From BBC:  Dreams 'can help with learning'

Napping after learning something new could help you commit it to memory - as long as you dream, scientists say.  They found people who dream about a new task perform it better on waking than those who do not sleep or do not dream. Volunteers were asked to learn the layout of a 3D computer maze so they could find their way within the virtual space several hours later. Those allowed to take a nap and who also remembered dreaming of the task, found their way to a landmark quicker.
The researchers think the dreams are a sign that unconscious parts of the brain are working hard to process information about the task.
Dr Robert Stickgold of Harvard Medical School, one of the authors of the paper, said dreams may be a marker that the brain is working on the same problem at many levels.
He said: "The dreams might reflect the brain's attempt to find associations for the memories that could make them more useful in the future."
Study tips
Co-author Dr Erin Wamsley said the study suggests our non-conscious brain works on the things that it deems are most important. "Every day we are gathering and encountering tremendous amounts of information and new experiences," she said.
"It would seem that our dreams are asking the question, 'How do I use this information to inform my life?"
The research, published in the academic journal Cell Biology, could have practical implications.
The scientists say there may be ways to take advantage of this phenomenon for improving learning and memory.
For example, students might be better studying hard before bedtime, or taking a nap after a period of afternoon study.

Comic books and Game Theory---Death or Cooperation---you choose!

A couple of examples HERE and HERE of using comic book super-hero situations to lean about the AP Microeconomics topic of Game Theory.  Something I failed to do adequately in class yesterday...Gotta brush up for Monday to finish the semester on a strong note...(HT: Valuingeconomics...)

US Dollar Exchange Rate relative to the Zimbawean Dollar---There is NO bigger number than this...

So tragic for the people of Zimbabwe who did not have to suffer this indignity, but the currency situation is laughable...Make sure you check the exchange rate relative to the US Dollar...

The Economist:  FEW Zimbabweans are excited by the 30th anniversary of independence from Britain. The southern African country was born in turmoil: a civil war, international sanctions and an economic slump in the 1970s had followed an earlier declaration of independence by Ian Smith, who led a regime of white settlers. Turmoil has continued under Smith's successors, Canaan Banana until 1987, and now Robert Mugabe. The 1980s and 1990s saw relative success for the economy, as commercial farmers boosted exports of tobacco, maize and other crops and small manufacturers prospered. But as Mr Mugabe came under pressure to quit, his seizure of farms, reckless printing of money and the emigration of the most educated and productive workers led to economic collapse. Hyperinflation and the destruction of the Zimbabwean dollar as a viable currency culminated in 2009 with the dollarisation of the economy.

You have the right! To fight! Annnnnddddd go on vacation?????? Huh?

If the notion of a right can be dumbed-downed enough to apply to "tourism", then I guess it can mean anything...Not against a countries wish to subsidize travel, I guess it is their "right"...er, I give up...

From The Sunday Times April 18, 2010:  Get packing: Brussels decrees holidays are a human right

""AN overseas holiday used to be thought of as a reward for a year’s hard work. Now Brussels has declared that tourism is a human right and pensioners, youths and those too poor to afford it should have their travel subsidised by the taxpayer.
Under the scheme, British pensioners could be given cut-price trips to Spain, while Greek teenagers could be taken around disused mills in Manchester to experience the cultural diversity of Europe.
The idea for the subsidised tours is the brainchild of Antonio Tajani, the European Union commissioner for enterprise and industry, who was appointed by Silvio Berlusconi, the Italian prime minister.
The scheme, which could cost hundreds of millions of pounds a year, is intended to promote a sense of pride in European culture, bridge the north-south divide in the continent and prop up resorts in their off-season....""

POP goes the bubble---Graphic on the rise of housing in our economy since 1963...Quite dramatic!

The housing industry represents a large portion of our economy.  Think of all the goods and services (hence jobs) that are dedicated, directly and indirectly, to building new houses.  It is quite a pipeline!  Question: Do we have an over-allocation of resources to the home building market?  This graph shows the vast increase in housing starts in the mid to late 1990's and accelerating in the 2000's.  Why the sudden surge?  It is still a subject of controversy (Govt policies towards homeownership, Federal Reserve loose money policy, Wall Street greed,  individual "greed", etc)  Do we need to implement policies to prevent the "too many eggs in the  housing basket"? What do you think????

Visualeconomics