Some quick links to items of interest:

• Nice new page for tracking a live and historical economic data (OANDA)
• Massive shortfall in San Diego city pension fund (SOSD)
• U.S. retail CMBS delinquencies data (ResearchRecap)
• How the credit crisis is playing out in research organizations (Nature)
• Year-end mutual fund tax bite may further drive ETF growth (Blomoberg)
• Corporations vs the market: Not the same thing (Cato)
• CalPERS housing portfolio lost 35% in a year on some dubious decisions (LAT)
• Review: Physicists on Wall Street and other essays (Nature)

A nice chart (from MIT’s Andrew Lo) of the growth of assets and hedge fund leverage over the last 20 years. You can plainly see the expanding leverage in the 2001-2005 period.

Joke I heard today:

Q: How do I find a good small-cap fund manager?

A: Find a good large-cap fund manager, and wait.

Good reminder stats from EMII on how the alt assets game has helped and then hamstrung the endowments at major schools. Could the David Swensen days be over?

Yale and Princeton universities have 70% of assets in alternatives, while Harvard University's allocation is 57%. These holdings have helped them generate strong returns over the past decade, but have been unable to offer diversification and liquidity.

Harvard, Yale and Princeton have declined to disclose their recent returns, but it is estimated that that each may be down 25% or more since June 30.

More here.

This sideshow is almost embarrassing, but you had to see it coming when the Minneapolis Fed puts out its paper of “myths” with respect to the current credit crisis:

A team at the Federal Reserve Bank of Minneapolis argues that four common claims about the sharp drop in bank lending to nonfinancial borrowers during the crisis are false, and they provide extensive data to back up this argument.

The study does not deny that the United States is suffering a financial crisis. Instead, it uses the evidence to dispute how this is spilling over the rest of the economy.

But researchers from the Boston Fed say the Minneapolis Fed's work ignores underlying loan market dynamics indicating a credit crunch, although they agree the numbers can be hard to untangle.

"Such a difference of opinion and open debate between researchers at Federal Reserve banks is both unusual and interesting, and is testimony to the difficult times in which we find ourselves," said former Atlanta Fed research head Bob Eisenbeis.

More here.

I'm working on something longer about the troubles at pension insurer Pension Benefit Guaranty Corporation, but this P&I quote from Jeffrey Brown at the University of Urbana-Champaign was just too good not to share:

Why would an insurance company invest in the same asset that they're insuring?

Why indeed.

Some quick links to items of interest:

• More drive-by economics: Traffic declining in New York bridges and tunnels (NYT)
• The lame excuses peddled by recession deniers over time (Bloomberg)
• Some interesting insider comments on the auto industry (Ritholtz)
• Expect an anemic recovery in late 2009 (Morgan Stanley)
• Many more California cities will follow Vallejo into bankruptcy (S.F. Chronicle)

Today’s Congressional testimony from various hedge fund managers, as a tag cloud (so you don’t have to watch or read):

Interesting chart of the growth in financial vs real engineers in the U.S. over the last few decades, as measured by graduate and post-graduate production of engineers and finance grads. Me-thinks the second chart is one that it would be nice to see invert sometime soon.

[via Andrew Lo]

Many U.S. states are set to wrong-headedly enact pro-cyclical policies –- spending cuts and tax increases -– as we head deeper into the current recession. That will almost certainly make things worse, forcing the most exposed states to the edge of default, and perhaps beyond. Only then, sadly, will we see the overdue hard choices being made about what we can and should pay for.

With the preceding in mind, here is a heat map of U.S. states compared by current deficits as a percentage of FY 2009 general revenue. California, Arizona, Nevada, and Florida are in the top five (as is Rhode Island, surprisingly), but 41 states now face rapidly growing shortfalls.

[Data via CBPP]