8 Fascinating Reads

I investigate the effect of a five-cent shopping bag tax imposed in the Washington Metropolitan Area. Despite the small size of the incentive, I find that the tax decreased the fraction of customers using a disposable bag by a substantial amount. In contrast, a similar policy that offered customers a five-cent bonus for reusable bags generated virtually no effect on behavior.

On Monday, tiny start-up Contrail Systems was in stealth mode. On Tuesday it officially launched. Today, Juniper Networks bought it for $176 million.

Contrail's founders, employees, and investors are sharing $57.5 million in cash and almost 6 million shares of Juniper stock.

Not bad for two days on the market.

Jon Birger, senior writer, Fortune Investors Guide 2008
"Smart investors should buy [Merrill Lynch] stock before everyone else comes to their senses."
Merrill's shares plummeted 77 percent.

Elaine Garzarelli, president of Garzarelli Capital, Business Week's Investment Outlook 2008
Buy some of the most beaten-down stocks, including those of giant financial institutions such as Lehman Brothers, Bear Stearns, and Merrill Lynch.
As of January 1, none of these firms will still exist.

Sarah Ketterer, CEO of Causeway Capital Management, Fortune Investors Guide 2008
"Fannie Mae and Freddie Mac have been pummeled. Our stress-test analysis indicates those stocks are at bargain basement prices."
Fannie and Freddie had lost 90 percent of their value.

James J. Cramer, "Future of Business" New York Magazine
"Goldman Sachs ... finishes the year at $300 a share. Not a prediction -- an inevitability."
Goldman Sachs' share price was $78, and the firm announced its first quarterly loss -- $2.2 billion.

A McKinsey & Co. study of crises in recent decades found that the United States is mirroring the pattern of countries with the strongest recoveries. It noted that "Debt in the financial sector relative to GDP has fallen back to levels last seen in 2000, before the credit bubble. US households have reduced their debt relative to disposable income by 15 percentage points, more than in any other country; at this rate, they could reach sustainable debt levels in two years or so."

Kenneth Rogoff and Carmen Reinhart, the leading experts on financial crises, argue that the United States is performing better than most countries in similar circumstances. U.S. consumer confidence is at its highest levels since September 2007.

IBM researchers are developing technology to analyze odors in people's breath that identify ailments, including liver and kidney disorders, asthma, diabetes and epilepsy. By determining which odors and molecules in a person's breath are associated with each disease, computers of the future will be able to make an instant analysis for problems that today could be misdiagnosed or go undetected by a doctor.