A new study reveals that one of the most cited economic principles regarding GDP and debt is most likely based on a "sloppy Excel coding error." According to a 2009 book by Carmen Reinhart and Kenneth Rogoff, This Time It's Different, countries with a high debt to GDP ratio have slow economic growth. But three economists at the University of Massachusetts have published a critique of Reinhart and Rogoff entitled: "Does High Public Debt Consistently Stifle Economic Growth?" They found a major and embarrassing error in the original calculations.
• Treasury Secretary Tim Geithner plans to ask for greater oversight of financial markets and stricter regulation today; his proposal will also seek more control over hedge funds and private equity firms. [BN, WSJ, NYT]
• The departure of two execs from AIG's Paris office could trigger defaults on $234 billion in derivative contracts, believe it or not. [WSJ]
• Morgan Stanley and Mitsubishi are merging their brokerages in Japan. [DB]
• Some say the insurance biz is the next shoe to drop in the crisis. [NYP]
• Commercial real estate loans are heading south in a hurry. Delinquency rates have more than doubled since September. [WSJ]
• Gross domestic product fell at a 6.3% annual rate during the fourth quarter of 2008; state unemployment claims are up, too. [WSJ, CNN]
• Hope you skipped business school: "The MBA will soon be joining equities and house titles in the museum of formerly overvalued pieces of paper." [TBM]