Bailout

When states don?t pay their debts

Posted on June 17, 2010
Greg Ip reports on how Illinois is going to have to start making unnecessary unemployment payments just because it's refusing to pay its debts:

English masters of the dead bat

Posted on June 17, 2010
John Gapper isn't letting the World Cup get to him: he knows that when it comes to Tony Hayward's Congressional testimony today, the sports metaphor of choice has to come from cricket rather than football. "Tony Hayward plays a dead bat to Congress" is his headline, and he's right: Hayward isn't interested in winning anything, here, he's just interested in letting the hearing time out by being infuriatingly passive and unhelpful...

Interchange and free checking

Posted on June 17, 2010
Why do most people hate their bank? Because their relationship is based on the lie of "free checking", and a relationship based on a lie is always going to be a dysfunctional relationship. Checking is never free, but in recent years banks have been able to conjure the illusion of free through a system of regressive cross-subsidies, where the poor pay massive overdraft fees and thereby allow the rich to pay nothing...

Counterparties

Posted on June 16, 2010
Those tenacious payday telemarketers -- MSNBC

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Assorted wine (links)

Posted on June 16, 2010
My second wine column for Reuters is out, and in it I talk a little bit about my wine contests; previous installments can be found here, here, and here, and I should definitely thank Tamara Lover for the original idea. If you want the price-quality graph and scatter graphs for the Beaujolais contest, here they are; they look much more like Merlot than Pinot...

The BP downgrade cycle

Posted on June 16, 2010
Quote of the day comes from Fitch's Jeffrey Woodruff, in the wake of downgrading BP by a whopping six notches, to BBB from AA:

The stock-market panic abates

Posted on June 16, 2010
Here's the S&P 500 over the past five days -- days which have included not only the massive Greece downgrade by Moody's, but also big new developments on the BP front: the oil spill might be up to 60,000 barrels a day, it's setting up a $20 billion fund for claims, and is suspending its dividend.

Fixing bankers? pay

Posted on June 16, 2010
I'm at a conference on the Squam Lake Report this afternoon, where Harvard's Jeremy Stein has just given a very compelling presentation on the subject of executive compensation at banks. His bright idea is that you don't regulate the level of pay at banks, and that you certainly don't try to convert pay into stock, for reasons similar to those glossed by Justin Fox at HBR:

Fannie Mae?s unneccessary evictions

Posted on June 16, 2010
Last month, I badgered Goldman Sachs about the unhelpful, self-defeating, and cruel attitude of its Litton subsidiary towards homeowners offering an everybody-wins way of staying in their homes. That story had a happy ending. So if the Vampire Squid can do the right thing in these situations, what are the chances that Fannie Mae might be able to follow suit? I'm not optimistic: so far Fannie's flacks haven't even managed to respond to multiple voicemails and emails...

Who?s going to pay for deposit insurance?

Posted on June 16, 2010
Tim Fernholz has the details on the new FDIC deposit-insurance cap: it looks like the temporary $250,000 limit is not only going to be made permanent, but will also be made retroactive, to cover uninsured depositors in IndyMac. And then there's this:

Counterparties

Posted on June 15, 2010
England 1-1 USA in lego -- Guardian

Box-office futures start their very short life

Posted on June 15, 2010
The CFTC has approved trading in film futures. This means almost nothing. A handful of contracts will trade in the next few weeks, but once the financial regulatory reform bill is signed into law, all such trading will come to an end. The opponents of box-office futures never really thought that the CFTC would change its mind and prevent these futures from trading, so they went over the CFTC's head to Congress...

Doing curation right

Posted on June 15, 2010
Paul Carr has a nice old rant at TechCrunch about the way in which Forbes is moving to an unpaid-contributor model:

That Meg Whitman interview, in full

Posted on June 15, 2010
Every so often, a reporter gets a glimpse of the enormous amount of behind-the-scenes craziness that goes on in advance of even the most mundane interview. Rarely, however, does it become public that an interview preparation session resulted in a flack storming out of the company, taking the CEO to arbitration, and eventually scoring a six-figure financial settlement...

How comprehensive is Zipcar?s insurance?

Posted on June 15, 2010
Back in 2006, I started writing about Zipcar insurance. Zipcar -- which is going public in an offering worth as much as $75 million -- has a history of being more than a little disingenuous about the degree to which its drivers are insured. I spoke to them in February 2007, and they promised to change the language on their website; instead, in May 2007, they decided to start leaving sock-puppet comments on my blog, rather than actually do what they'd promised...

The NYT doesn?t care about posting primary documents

Posted on June 15, 2010
The NYT has a clear policy when it comes to primary sources -- if you're writing about a certain document, then you should link to it, if it's online. Increasingly, the NYT's journalists are actually doing that. On the other hand, when it's the journalists themselves who come up with the original documents, they tend to be very bad at putting them online...

Counterparties

Posted on June 14, 2010
Bloomberg commissioned a custom drawing of Helvetica for their new Businessweek logo -- Brand New

The divorce diet

Posted on June 14, 2010
Abby Ellin finds some interesting body-weight literature:

Talking to Sebastian Mallaby

Posted on June 14, 2010
Sebastian Mallaby came in to Reuters today to plug his new book, and so naturally we talked about hedge funds. He's more positive about them than I am, but even he reckons that they make sense as investments only for big institutional investors:

Homeownership and positive externalities

Posted on June 14, 2010
My post on falling homeownership sparked an interesting debate about whether and where one might find positive externalities associated with people owning their homes. Certainly a lot of old-fashioned home-improvement expenditures, which make sense insofar as they increase the value of the home, stop making sense when any increase in value just goes straight to the bank...

The Greece downgrade non-event

Posted on June 14, 2010
Here's a graph of the stock market plunge in the wake of Moody's shocking four-notch downgrade of Greece to junk status:

Did the failure of genomics doom the US economy?

Posted on June 14, 2010
Mike Mandel has an interesting nominee for the most significant economic event of the past decade: the failure of the Human Genome Project to become the medical and financial blockbuster that everybody expected tend years ago.

The Renaissance common-sense test

Posted on June 14, 2010
Robert Frey, formerly of Renaissance Technologies, has a new Fund of Hedge Funds, and good for him. He also lifts the kimono ever so slightly on how Renaissance works:

Zach Kouwe fired again

Posted on June 12, 2010
In February, a NYT blogger, Zachery Kouwe, was fired for plagiarism. The proximate cause of the firing was a complaint from the WSJ, but he'd had run-ins with other publications in the past, including nicking a memo from Dealbreaker without attribution...

Counterparties

Posted on June 11, 2010
Fidelity might be trading iShares for free. But its execution quality is atrocious -- Fundometry

The wrong kind of falling homeownership

Posted on June 11, 2010
Richard Florida has long been in the same camp as me on the homeownership front: it's too high, and creates problems like labor immobility and rental ghettoes populated only by people who can't afford to buy. Today he says that we've already had a "great homeownership reset", based on a paper by Andrew Haughwout, Richard Peach, and Joseph Tracy of the NY Fed...

How BP will announce its dividend suspension

Posted on June 11, 2010
The WSJ is running a poll asking whether its readers think BP will suspend its dividend; so far, with 2,342 votes, the results are almost exactly 50-50. But I think that Peston is right on this one and that the WSJ's readers are a bit behind the curve: the dividend supension is not a question of whether, but when.

BP: Still not as evil as Goldman Sachs

Posted on June 11, 2010
I love this chart from BrandIndex, showing responses to the question "If you've heard anything about the brand in the last two weeks, was it positive or negative?".

Is Basel III already prompting bank sales?

Posted on June 10, 2010
The WSJ cites an interesting reason why BofA sold its stake in Santander Mexico:

Counterparties

Posted on June 10, 2010
Lindsey Graham's climate-change U-turn (see update) -- TNR

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