Recent events have brought to light that a famous research paper by noted economists Carmen Reinhart and Kenneth Rogoff published in the 2010 National Bureau of Economic Research working paper series contained serious programming, methodological, and statistical errors. Their paper claimed to show that there is a sharp decline in GDP whenever an economy reaches the 90% debt level. Policy makers at the European Commission and in Washington paid heed to these results and formulated real policies such as "debt stabilization" in Europe and the sequester in the USA that have led to sustained high unemployment and weakened economies. But subsequent analyses have shown that no such 90% cliff exists.

The ongoing gyrations of the stock market over the past few months have spread panic not just throughout the markets, but into the rest of the economy and the political sphere. There are some who assert that this is due to the recent downgrade of the American credit rating by Standard & Poor's (S&P), but an analysis with Mathematica suggests that other factors may be at play. Using the FinancialBond function for a zero-coupon continuously compounding bond price, we discover the inverse relation between bond prices and yields (y) given below. As the bond price increases, the yield y decreases. As bonds are bought, their prices go up and the corresponding yields drop. Looking at the U.S. yield curve using Wolfram|Alpha at the end of July and eight weeks later below, the yields on long-term 10-year treasury bonds have dropped from 2.82% to 1.84%, which is a historic 50-year low. This shows that investors are now more likely to buy long-term U.S. government debt, which is puzzling behavior if they are panicked by the S&P downgrade.

Mathematica 8 added a slew of powerful finance functions to its already large list of capabilities when it was released last November. To help highlight some of these features as well as assist those who want to use them, Wolfram Research is presenting both a finance workshop and a free seminar at the Club Quarters, Wall Street hotel in New York City on September 15.

It has been a roller coaster ride for the stock market lately. On August 1, the United States government avoided a default by a last minute deal to raise the debt limit. A few days later, we witnessed the first ever downgrade of U.S. credit by Standard & Poor's. Using Mathematica's TradingChart command, we can witness the stock market's immediate negative reaction to the downgrade. Note: Mouse over the chart to see the daily open, high, low, and closing price of the S&P 500 index.