A look around at a few blogs

The SportsEconomist (with a team of writers now joining Skip in putting out a vastly increased number of posts) has an interesting article reminding us that banks get paid before shareholders. What is interesting is some of the consequences. For instance, the article looks are troubled farms where the farmers are not making any money, but the banks are getting paid. The reason for the article is a discussion of how banks are pressuring some NHL owners to settle the lockout.

The Sports Economist also looks at how Pittsburgh's attempt to jump-start the local economy by helping to build sports stadiums has largely failed and left the city in financial distress.

The Financial Accounting Blog comments on whether the growing conservatism of auditors in the wake of the Andersen debacle is too much of a good thing: "practitioners are hesitant to be more aggressive because accounting maneuvers are being increasingly scrutinized by regulators, lawyers and even the media." How is this coming into play? One example is that restatements are up. But as Dennis points out, this may be caused by this increased conservatism:

"Some of the restatements may simply reflect the fact that auditors are much more conservative and more apt to instruct a client to restate earnings after finding an error that several years ago might have been overlooked or ignored."

Brad DeLong suggests that Chile's privatized pension system is not necessarily living up to expectations. Without having seen any other numbers than those from his post and the NY Times Article on which he comments, I would only answer: is our current social security system any better? It too has problems. Indeed any system we adopt will have problems. Is the current social security system in trouble? yes. Is in awful trouble? Maybe not. But that does not mean we can't improve it and allowing some equity is probably a good thing.

And in case you ever wondered why the nickname of Economics as the Dismal Science has stuck around, check out some of the links off of the Marginal Revolution's piece on a supposed real estate bubble. Short version: US interest rates are artifically low given twin deficits and have to rise. The rising interest rates will cause real estate (and equity) prices to fall and economy will suffer. Or so goes the theory. Malthus would be so proud. ;)