Street Sweep - Fortune Finance: Hedge Funds, Markets, Mergers & Acquisitions, Private Equity, Venture Capital, Wall Street, Washington Apparently Bernie Madoff wasn't the only bad apple at Nasdaq. In the latest shining moment for the U.S. stock exchanges, the Securities and Exchange Commission on Thursday charged Donald Johnson, a former Nasdaq managing director, with ripping off investors to the tune of $755,000 by insider trading ahead of the release of corporate press releases. Johnson, you will be impressed to learn, was in charge through October 2009 of the Nasdaq's "market intelligence" desk, which is surely a misnomer but seems in any case to have afforded him with a lot of info he used to trade profitably on outfits like United Therapeutics (UTHR). Fearless leader The SEC has come under heavy fire in recent years for its failure to nab Madoff, a three-term Nasdaq chairman in the 1990s, before he frittered away $20 billion in the biggest-ever Ponzi scheme. "This case is the insider trading version of the fox guarding the henhouse," said Robert Khuzami, director of the SEC's Division of Enforcement.
Economics and Politics by Paul Krugman - The Conscience of a Liberal - NYTimes.com Economix Blog - The Economy and the Economics of Everyday Life Marginal Revolution — Small steps toward a much better world. Greg Mankiw's Blog Economist's View Marginal Revolution Going as far back as Andrew Weiss’s survey paper , there are various attempts to argue that the two theories make the same predictions about earnings and education. A randomly elevated individual will earn more money but is this from having learned more or from being pooled with a more productive set of peers? To explore this, let’s pursue the very good question asked by Bryan Caplan : Our story begins with a 22-year-old high school graduate with a B average. If he can fake a good interview (a big if, but let’s say), and if certification from recommenders is not important in the chosen sector (another big if), he may get a Harvard-quality job for his first placement. In most jobs they figure out your productivity within two or three months after training, if not sooner. Do not be tricked by those who serve up one-period examples to establish the empirical equivalence of signaling and human capital theories! Addendum : There is a less drastic scenario than the one outlined by Bryan.
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