Now raising intellectual capital


Why it pays to apologize. – BusinessWeek

Give Goldman Sachs credit for its adherence to rigorous, market-value accounting. — David Reilly.

Crush the U.S. Chamber of Commerce? — Economic Populist.

Don’t cut the payroll tax rate. — Bruce Bartlett

Happy now, all you whining small banks? — Noam Scheiber.

Deal makers pay tribute to Bruce Wasserstein. — Julia Werdigier.


Bruce Wasserstein, 1947-2009. — DealBook.

Wall Street firms are surprisingly tone deaf when it comes to bonuses. —

“Finding a job right now is extremely difficult.” (with scary chart) — the Federal Reserve Bank of Atlanta’s macroblog.

from Rolfe Winkler:

Lunchtime Links 10-14

JP Morgan blows out results (Bloomberg) It's good to be TBTF!

WSJ artist ripped off! (Hedcuts) You know those neat little illustrations that WSJ runs in the paper? Turns out an artist is ripping them off. "...MY DRAWING was given as a gift to Vaclav Havel who then re-gifted it for president Obama?! And it's now hanging in the White House?! You can bet your knickers I will do my damndest to let the President know he was scammed by the Spaniards and the Czechs! ;-)))"

$9200 per square foot for Hong Kong apt (AP) Must be nice digs.

Wall Street smarts (NYT)

10,000 apply for 90 jobs ( Building washing machines, pays $27,000, with benefits.


A mighty fortress: JPMorgan Chase wows. — Reuters.

“Unfortunately, it’s screw the shareholders!” a Bank of America director says in a January email. Investigators begin to leak as they shine a light into the murk of the Merrill deal. — Louise Story and Eric Dash.

Stop whining about Goldman Sachs’ bonuses. Here are nine things you should be upset about. — Barry Ritholtz.


Regulators are looking at “naked” access to high-frequency trading. — Wall Street Journal (And see Matthew Goldstein’s take on the retail victims of HF trading.)

If the White House “has hard numbers we can put on the benefits of big banks, please make these public. We can then weigh these against the obvious costs of running our financial system in this fashion – on this round alone: fast approaching 40 percent of GDP, i.e., the increase in government debt as a direct result of our financial fiasco; plus persistently high unemployment; millions of homes lost; likely permanent loss of output, etc.” — Simon Johnson.


Why we are still delusional about house prices. — Henry Blodget.

The Nobel winners in economics. Was Christopher Swann right? – Nobel Foundation, Justin Fox.

A back-of-the-envelope calculation of when the Federal Reserve should raise rates. — Paul Krugman.


Changes in hedge fund land: James Simons is retiring from Renaissance Technologies. — Reuters while Zoe Cruz is looking to start a hedge fund. — Wall Street Journal.

“If we don’t know which institutions are doing what–if we don’t actually monitor what we’ve regulated–then that regulation won’t work.” — Daniel Altman

from Rolfe Winkler:

Lunchtime Links 10-8

Palestinian investors in bombed Gaza smuggling tunnels demand make-goods from Hamas (Bloomberg)

Caveat Emptor--Treasury hails milestone in home loan modifications (NYT) The milestone is that 500,000 mortgage modifications have been started. But that's not a very big number and it doesn't mean that many will actually end up in a modification. And relatively few involve principal reductions, which is what's necessary for home prices to find a stable floor. That can happen via foreclosure, short sale or outright principal forgiveness. But someone will eventually have to recognize the loss due to the declining value of collateral.


Any new legislation on derivatives needs to treat them like any other financial instrument. — Barry Ritholtz.

If Warren Buffett is selling, should you be buying? Probably not. The story of the Symetra Financial IPO — Jonathan Weil

from Rolfe Winkler:

Lunchtime Links 10-7

Pelosi says VAT is "on the table" (Politico) A value-added tax makes good sense. But it should replace the income tax more than supplement it. Taxing consumption as opposed to saving would help re-balance the American economy. My personal preference would be to cut the size of government, primarily by raising the retirement age for Medicare and Social Security. That said, here we stand facing huge budget deficits that have to be closed. There's no painless way to do that and higher taxes are likely part of the solution. Much has been said on the topic here at Reuters: Chris Swann likes a VAT; James Pethokoukis says we need to cut spending first. They're both right.

Extend, amend and pretend in commercial real estate (WSJ, ht frog) "...banks have a few tricks up their sleeves to prop up their [commercial] real-estate assets: First, they are extending troubled loans instead of making struggling developers pay them off now. Second, the banks are essentially paying themselves interest from so-called interest reserves that were built into the loans, allowing the borrowers to keep putting off payments. Lately, the banks may also be able to forestall write-downs because few people are buying office buildings and shopping malls at the moment, so it is difficult to put a value on real-estate assets."