Good afternoon, View fans. On with today's afternoon links.
The downside of fair-value classifications
It has been several years since the U.S. Financial Accounting Standards Board passed the rules that require companies to classify the financial instruments on their books into one of three buckets: Level 1, Level 2 or Level 3. The first kind means there are market quotes readily available. Level 2, the most common type, requires the use of valuation models. And the oft-maligned Level 3 means that at least one of the model inputs isn't observable in the marketplace, so there's a high amount of guesswork involved. Fitch Ratings today published a short paper on this subject by three of its analysts, who examined how well the disclosure regime has held up well. "The allure of quantification is to simplify the complex," they wrote. "However, it will always be difficult to reduce something as multifaceted and dynamic as market valuation into a single number or statistic."
Learning to accept that tapering might not mean tightening
Daniel Kruger and Liz Capo McCormick of Bloomberg News write that the markets don't see the Federal Reserve raising its benchmark interest until late 2015: "The Fed’s assertion that the tapering of its quantitative easing doesn’t mean a tightening of monetary policy is starting to sink in among bond traders. That may help contain yields, supporting borrowers of all types that have refinanced trillions of dollars of debt because of the Fed’s policies."
Some advice for retiring early
Jeff Reeves at Market Watch says he punishes himself for short periods of time by saving big instead of small and that this approach, called "burst saving," has become more common: "A lot of people have had to catch up since the Great Recession. And their shared approach is simple: making saving your first priority, and pay yourself later."
In search of a business model for Atlantic City, New Jersey
From Adrienne Raphel at the New Yorker: "The casinos aren’t spectacular enough to be an attraction on their own, and the hotels and piers from the forties have literally crumbled. Atlantic City might try to dress itself up as a glitzy club destination or a family-friendly haven, but the truth is that the town has to offer what it has always offered: a beach, a boardwalk, and some places to gamble. Once upon a time, that sounded like a lot."
The perfect gift for that special, malodorous someone
It takes a dirty mind to run a clean blog, as they say. So I won't describe Shreddies here. But linking is fair game, especially considering that the link is to an article by CNN.
(Jonathan Weil is a Bloomberg View columnist. Follow him on Twitter.)