With most of the papers caught up in discussion of the Columbia tragedy, economic and financial news has been pushed off the front pages. So here's a question: How effective is the market at processing the kind of negative information inherent in this news -- and in processing negative news in general?

To answer the first question, we can go back to the explosion of the shuttle Challenger in 1986. Within an hour of the news crossing the wire at 11:47 a.m. that day, subsequent stories identified Lockheed Martin (LMT - commentary - Cramer's Take) (shuttle ground support), Rockwell (COL - commentary - Cramer's Take) (maker of the shuttle and main engines), Morton Thiokol (solid-fuel boosters) and Martin Marietta (external fuel tanks) as being involved with subsystems that might be implicated in investigations. As a fascinating 1998 paper points out, the market focused early on Morton Thiokol, with its stock showing a one-day -11.86% return, more than six standard deviations above the firm's average daily return.

This time around, stories are focusing on the Columbia's external fuel tanks and possible damage done by insulation to the shuttle's heat shield. The effects will be most focused on Boeing (BA - commentary - Cramer's Take), which acquired the space business of Rockwell International in 1996. It also maintains the orbiter as part of a 50/50 joint venture with Lockheed. And it's worth pointing out that Lockheed merged with Martin Marietta back in 1994, the maker of the external tanks.

In related news, how quickly does the market process bad news? Surprisingly slowly, an interesting recent study suggests. It shows that stocks hit by negative news tend to drift downward for as long as 12 months after the news, creating a marked and persistent anomaly. The effect is more pronounced in smaller stocks, but it is noteworthy across capitalizations and has been around for some time.

Economist and New York Times columnist Paul Krugman drives me crazy. He is, of course, a brilliant economist, but he has (at least) two irritating habits: making screwy appeals to authority and writing increasingly screechy screeds about the Bush administration.

I'm not going to argue whether he is right or wrong, but I do want to point out that many of his proofs ("most economists think. ...") are not proofs at all, just lazy rhetoric. That said, he is still the columnist I read most regularly on the Times editorial page, so infuriating people is obviously an effective marketing technique.

We've all seen the studies: Dividend yield is a reasonable predictor of share price over period X. Or some other indicator is a useful predictor. And then it stops working. This excellent paper dives into the necessary question: How many of these studies are actually artifacts of the fact that share prices generally trend upward over time? And how many studies are equally invalidated by straight-up data snooping? The surprising answer: many of them. This paper is a must-read for anyone with an interest in financial research, or how it is wrong-headedly reported.

Finally, some quick hits:

The (ahem) crisis in the U.S. economy.

Fire Abby Cohen; hire Lee Larick (retired school principal in Bothel, Wash.).

Viruses are getting smarter.

Burning cash rather than fossil fuels at Ballard.

The further decline of Gretchen Morgenson -- she's now apparently rewriting press materials as columns.

Have you googled yourself lately? You should -- it could be costing you.

Gerry Levin tells his side in the AOL Time Warner (AOL - commentary - Cramer's Take) saga.

Dissident economists fight against being (further) marginalized in academia.

The information inherent in IPO book-building.

More than $2.5 billion in preferred shares could be called this year.

Handy-dandy tip sheet to previous bank crises -- fun for the whole family.

Shorting stocks, Shariah-style

RFID is about to explode. (I agree.)

The space shuttle must be stopped.