Jonathan Carmel wonders: Why not take Ronen Avraham's excellent idea one step further and take the tort lawyers out of the system altogether?

Barclays paid $2.5 billion for former Lehman employees. Jonathan Carmel wonders whether this was Barclays' failure or Thanassoulis's.

Jonathan Carmel explains that the auctions on which the Paulson plan relies are no magic bullet, and the problems of adverse selection that are causing the banks trouble could continue after $700 billion is spent.

"This paper points out that stock incentives do not lead to myopia unless they result in more emphasis on the short-term than would occur under an optimal contract. It shows that myopia findings relative to the standard used throughout the literature (first-best efficiency) are often reversed...