How much financial innovation is desirable?  (Baseline Scenario, Curious Capitalist, Felix Salmon, Free exchange)

More sentiment measures.  (The Pragmatic Capitalist, The Technical Take, TraderFeed)

T. Boone Pickens takes another shot at the hedge fund biz.  (market folly)

CIT Group (CIT) lives, for now.  (Calculated Risk, Felix Salmon)

Fortress Investment Group (FIG) is behind the eight ball.  Good thing their new Chairman is the former CEO of Fannie Mae.  (WSJ)

The risks of high frequency trading have been known for some time now.  (Zero Hedge, ibid)

Did Blackrock (BLK) pay too much for BGI?  (Institutional Investor)

Using Dr. Brett as a virtual trading adviser.  (A Dash of Insight)

Doug Kass reviews his 20 surprises for 2009.  (TheStreet)

Why do people listen to Nassim Taleb?  (Locklin on science via aleablog)

Countries with higher levels of individualism tend to demonstrate more price momentum.  (Journal of Finance)

Taking a closer look at Richard Tortoriello’sQuantitative Strategies for Achieving Alpha.”  (CXO Advisory Group)

The number of skilled mutual fund managers has decreased over time.  (Journal of Finance)

No wonder toxic assets are so difficult to price.  (WSJ)

The collapse in commercial real estate is going to take a toll on smaller regional banks.  (WSJ, Clusterstock, ibid)

“In the midst of this downturn, some of the biggest players in the economy—state and local governments together account for about thirteen per cent of G.D.P.—will be doing precisely the wrong thing.”  (New Yorker)

The state of California needs all the revenue it can get.  (Gregor Macdonald)

States are seeing revenue shortfalls.  (EconomPic Data)

“Guarantees operate as budgetary time bombs.”  (Clusterstock)

Why housing hasn’t bottomed yet.  (Big Picture)

Does Jamie Dimon hold the fate of the proposed Consumer Financial Protection Agency in his hands?  (Baseline Scenario also New York)

Is the New York Fed populated with too many former Wall Streeters?  (WashingtonPost)

An upside to the economic crisis.  The US trade deficit has been cut in half.  (Brad Setser)

TIPS-implied inflation is back on the march.  (Capital Spectator)

Imperfect models of risk ought to be better than no models at all but the evidence so far is that this isn’t the case – people abrogate their responsibilities and start putting unjustified faith in the models rather than thinking for themselves.”  (The Psy-Fi Blog)

Malcolm Gladwell, “From an individual perspective, it is hard to distinguish between the times when excessive optimism is good and the times when it isn’t. All that we can say unequivocally is that overconfidence is, as Wrangham puts it, “globally maladaptive.”  (New Yorker)

Business news is booming.  Business magazines are not.  (Time, Mediaite)

A couple of thoughts on blogging.  (Abnormal Returns)

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