This is one for the list of things you intuitively know, but have never bothered to fully formulate: the “issue-attention cycle” as laid out by Anthony Downs in a 1972 issue of The Public Interest. It describes how a society travels from blissful ignorance to intense interest about a topic, only to smack into cruel reality and then transition to boredom or indifference. Read more
Here’s a timely discussion paper from the Federal Reserve.
In it, the authors attempt to build a quantitative model to take into account sovereign default risk, economic fundamentals and — most interestingly — news on future fundamentals. Think of an EU minister saying Spain and Portugal face a loss of productivity, and the ensuing jump in Spanish and Portuguese bond yields. Clearly there’s a link, and now academics are trying to quantify it. Read more
Joshua Brown over at The Reformed Broker has a wry post on all the news items that the media (including the blogosphere) remains obsessed with, but which the markets no longer seem to give a fig about.
Brown’s topics range from “unemployment” to “nefarious investment bankers,” by way of “The Twilight Trilogy.” Read more