Interest rate puzzle

I have a savings account with ING Direct. When I was checking my account balance recently, I was surprised to see that their interest rate for an ordinary savings account was much lower than their interest rate for a tax-free savings account. Currently, their standard savings account pays 1.2%, while their tax-free account pays two-thirds more: 2%.

I found this baffling. In both cases, an investor puts their money into an account, and ING lends it out to borrowers at a higher rate in the form of mortgages. Whether or not the investor is charged tax by the government shouldn't affect ING's, so I was wondering why the accounts had different rates.

Placebo effect of cigarettes?

Cigarette packages in Canada come with horrifying images and statistics about the damage they can cause to an individual's health. The picture below shows a graphic picture of mouth disease on a cigarette pack with a warning that cigarettes do indeed cause mouth diseases:

How much is your tree worth?

I noticed a very interesting sign tacked to a tree on the McMaster University campus recently:

What the heck happened yesterday?

The financial crisis of 2008 and 2009 was bad, but in some ways I think what happened yesterday was scarier.

In case you missed it, the Dow Jones index plunged about 10% in about five minutes. "About $700 billion of U.S. stock- market value was wiped out in less than 10 minutes," Businessweek reported. $700 billion. That's $1.2 million dollars down the drain every second. The Wall Street Journal reported that shares of companies worth billions of dollars earlier in the day were trading at one cent, while shares of Sotheby's briefly jumped from $35 to $100,000.

Vancouver's astonishingly high living wage

The Canadian Centre for Policy Alternatives released a study on Tuesday pegging the living wage in Metro Vancouver at $18.17. In other words, a family with two kids living in Metro Vancouver would have to have both parents working full-time at $18.17 an hour in order to meet its "basic needs."

Given that the minimum wage in Vancouver is $8 (or $6, if you have less than 500 hours of work experience), it seemed astonishingly high. As a 20-something guy who may one day want to start a family, it's a little bit nerve-racking to think that it'd take a salary of $36.34 per hour just to provide the most basic support to a wife and a couple of kids.

A brilliant (but controversial) idea

This is a brilliant idea. As reported in the Toronto Star, a prof has started a business where university papers are sent to India to be marked. It seems that the Indian markers can do the grading cheaper and more effectively than profs and teaching assistants at certain universities.

It's a great example of how comparative advantage and specialization can make life better. The Indian markers have a comparative advantage marking papers, and the profs have a comparative advantage in lecturing and research. Outsourcing allows the profs to focus on what they're good at and allows the Indian markers to make some money.