» Posted by Martin Weil on February 24, 2010

I shared the quintessential trait of all young attorneys: unrelenting, paralyzing fear. It overwhelms everything we do and contaminates the first two to three years of our law jobs. ... I know nothing. How the hell did I get this degree? How the hell did I pass the bar? Law school didn't teach me anything. ... How long can I fake this before they figure it out? How come everyone else knows what they're doing? What happens if I get fired or fail? I bet I'll get disbarred! Please, God, don't let me get disbarred."

An epic saga of real estate foreclosure and redemption, and the real-world education of newly-minted lawyer, Wajahit Ali

» Posted by Martin Weil on February 19, 2010

Jonah Lehrer, author of How We Decide, updates and explains the classic Kahneman & Tversky loss aversion experiment that is at the foundation of behavioral economics in his blog post. A short read and a very accessible explanation of how our emotions distort the human decision-making process, and why the economics theory that man is a rational actor is not based in reality. One excerpt that investors should note:

Loss aversion also explains one of the most common investing mistakes: investors evaluating their stock portfolio are most likely to sell stocks that have increased in value. Unfortunately, this means that they end up holding on to their depreciating stocks. Over the long term, this strategy is exceedingly foolish, since it ultimately leads to a portfolio composed entirely of shares that are losing money.

» Posted by Martin Weil on February 18, 2010

In statements and letters, Anthem and WellPoint have explained what the industry calls a recessionary death spiral: as unemployment and declining wages prompt healthy people to drop their insurance, the remaining risk pool becomes sicker and more expensive to insure, which in turn forces up prices and pushes more people out of the market.

From an article in the NY Times on Anthem's much criticized plan to raise rates by 39% in California.

Having just been billed $35,000 for my daughter's four hours in a San Francisco hospital OR (and yes it was covered, by Anthem no less, and yes, the hospital got much much less than they billed), I can only stand in disbelief at those who do not see that our current health care financing system is utterly broken.

» Posted by Martin Weil on February 13, 2010

No one questions that economics and strongly-held economic beliefs played a role in the financial meltdown. You can vote here for the economists you think most contributed to the global financial crisis.

» Posted by Martin Weil on February 12, 2010

I first heard food writer Michael Pollan last year and was struck by his statement that staying healthy was a pretty simple task. All you had to do was to "Eat Food." By that he meant avoiding processed food and eating fresh. Don't worry about supplements and all the competing health claims that are put out year in and year out, just shop more from the outside edges of the supermarket, where the fresh stuff is, and less from the inside aisles where the packaged and frozen stuff is.

In a recent Commonwealth Club lecture, Pollan made the point that it is our American diet - a lot of fast food and heavy in red meat - that is killing us, as well as greatly increasing our carbon footprint. Cardiovascular disease and diabetes are the main symptoms. And this is supported by the government's agriculture subsidies to corn growers (that feed the cows), feed lots and the elimination of the normal OSHA, environmental and health restrictions that apply to most other industries. This is where agriculture policy intersects health policy. It is not a pretty picture.

According to Pollan, eating less meat would be the single thing we could do to improve our health, lower our health costs, reduce our dependence on foreign oil and lower our carbon footprint. As close to a no-brainer as I can think of. Not suggesting vegetarianism in any way, Pollan said that were an average meat eater in the US (who eats 400 pounds a year of the stuff) to reduce their meat consumption by just 20%, the greenhouse gas emissions savings would be the equivalent of swapping a Hummer for a Prius. Something to think about as the debate rages over these issues.

Pollan's books are In Defense of Food, The Omnivore's Dilemma, and Food Rules.

» Posted by Martin Weil on February 10, 2010

The former IMF Chief Economist testified today before the US Senate Budget Committee on the state of, and prospects for, the global economy. He concludes his lengthy remarks, covering the prospects for a slowdown in 2010, ongoing problems in the Eurozone and a continuing boom in the emerging markets with the following, somewhat chilling, concluding point:

We are steadily becoming more vulnerable to economic disaster on an epic scale.

» Posted by Martin Weil on February 07, 2010

The Lords of Finance is an extremely well-written narrative of the financial urgencies that drove the western world from WWI to the Great Depression and ultimately WWII. This fascinating and gripping tale tells the personal and professional stories of four men - Ben Strong, Montagu Norman, Hjalmer Schacht, Emile Moreau - who headed the central banks of the four great powers through the great financial crisis of the 20th century. The parallels to our present situation are inescapable. Economics students, history buffs and biography fans should find much worthwhile.

» Posted by Martin Weil on February 04, 2010

Demand question time is a bi-partisan grassroots effort to encourage this and future Presidents to engage in the sort of civilized public dialogue with members of the opposite party that occurred last week. Follow the link and you can add your name to the petition. It is overdue time to restore an informed democracy and drive out the demagogues, panderers, lobbyists and political hatchet men from the temple.