Now raising intellectual capital

from Rolfe Winkler:

Lunchtime Links 9-16

Me talk presidential one day (GQ, ht Felix) A former Bush speechwriter explains just how confused the White House was last fall when it was racing to release TARP.

Building code? We don't need no stinking building code (PDF, ht Danny Watts)

Is the Fed on the side of investors? (Jack Ciesielski) No. Fed Governor Elizabeth Duke wants to give banks more leeway to use "amortized cost" accounting, i.e. to ignore fair value. But without fair value, "how else can investors assess whether or not management is dragging its feet on recognizing impaired assets? They can't - not with straight amortized cost accounting, which demands an impairment model requiring a high-voltage cattle prod to get managers to recognize writedowns."

Warren Buffett might have saved Lehman! If he knew how to check voice mail... (Time) Nah, he's too smart....he wasn't going to jump on the Lehman grenade...

Facebook says it's "cash flow positive" (Bits) I'm curious: Over what period are they measuring? And what are the components of the revenue line? Are they cash flow positive this month? Or for the full year and going forward? It would be easy to make a claim like this in a month when they aren't making big CAPEX investments, for instance. And what about the top line? Is the revenue all recurring? Their ad revenues can't be that great. Last I checked, social media was not a popular ad buy with advertisers. Ad rates are pretty low relative to content sites like, for instance, So I have my doubts...

from Rolfe Winkler:

Lunchtime Links 9-15

Wells Fargo fires exec over Malibu house scandal (Reuters)

Warren: "Until we have a credible liquidation threat, we don't have capitalism in America" (HuffPo) Yeah, we need better resolution authority for big financials, but we should break up banks so that they aren't large enough to pose a systemic risk in the first place. By the way, for all the folks out there that think the government "made money" when Goldman bought back TARP warrants at a small profit, Warren reminds us that they still have $13 billion of your money that was passed through AIG.

Citigroup explores bid to pare U.S. stake (WSJ) Speaking of the canard that we're "making money" on the bailout, it's unfortunate this piece ends by noting that taxpayers are up $9.8 billion on their Citi stock. The reason the equity has positive value is because the rest of the capital structure is being supported by taxpayers. And the ultimate cost of that support is likely to be significant.

from Rolfe Winkler:

Lunchtime Links 9-11

MUST READ--Big food vs. big insurance (NYT)"What happens when the health insurance industry realizes that our system of farm subsidies makes junk food cheap, and fresh produce dear, and thus contributes to obesity and Type 2 diabetes? It will promptly get involved in the fight over the farm bill — which is to say, the industry will begin buying seats on those agriculture committees and demanding that the next bill be written with the interests of the public health more firmly in mind."

Condo owner finds out he's been living in (and renovating) the wrong unit (

from Rolfe Winkler:

Lunchtime Links 9-9

A little judge who rejects foreclosures (NYT)

New York nears charges on Merrill deal (WSJ) Judge Rakoff complained that the SEC wasn't going after particular individuals responsible for misleading BofA shareholders. NY AG Cuomo is taking charge...

Consumer credit declines sharply (CR) Big news that hit yesterday. Another interesting chart from EconomPic Data.

from Rolfe Winkler:

Lunchtime Links 9-8

Cornell Undergrad Tuition + Room/Board = $50,114 (Cornell) Happened upon this table after I wrote my column on the rising cost of college last week. I'm not saying this is representative of most colleges. It isn't. Still, the size and consistency of the price increase is remarkable. If the government stopped providing so much credit, schools wouldn't be able to raise prices like this.

Copter aids rescue of bride-to-be (WaPo) A proposal that didn't exactly go as planned...

from Rolfe Winkler:

Labor Day Links

(Reader note: Just a reminder for those who wish their links to open in a new tab, you can either right click the link and select "open in new tab" or click the scrolling wheel and it will happen automatically)

Wall St. pursues profit in bundles of life insurance (NYT) Securitizing mortgages is dead, so Wall St. needs a new financial product to package and sell to investors. According to this article, they may have found the product in life settlements, though Felix notes this may be much ado about nothing.

from Rolfe Winkler:


(Reader note: here at Reuters we've been discussing the merits of opening links in a new tab vs. the same one. So I'm going to experiment for a week with links in the same window. If you prefer them to be opened in a new tab, just right click)

(Reader note #2: I'm away this weekend with limited access to the internet, so posting will be light.)

from Rolfe Winkler:

Daily Distractions 9-3

Banks need to end $1 trillion kick the can game (Bloomberg) Great column from David Reilly. I've been working on FAS 166/167 -- the new accounting rules that will force banks to bring assets back onto their balance sheets -- and hope to have something to add to the conversation soon.

UK says cash is for buffers (WSJ) Hopefully that's where it will be allocated.

Captain Morgan may set sail for tax benefits (LA Times)

Sheila Bair and the case against a super regulator (Ed Harrison)

Japan's new first lady says she rode UFO to Venus (Reuters) "While my body was asleep, I think my soul rode on a triangular-shaped UFO and went to Venus," Miyuki Hatoyama, the wife of premier-in-waiting Yukio Hatoyama, wrote in a book published last year. "It was a very beautiful place and it was really green."

from Rolfe Winkler:

Daily Distractions 9-2

(This week has been particularly slow from a news not a lot of links on topic today. I'm sure readers probably prefer that!)

Wells Fargo to repay TARP, not raise equity (Bloomberg) Ugh. Wells is sitting on a fairly toxic loan portfolio. They want out of TARP, because that's the only emergency rescue that comes with any strings, but they aren't going to raise new equity capital to protect the balance sheet. That would dilute existing shareholders, the biggest of which is Warren Buffett.

from Felix Salmon:

Late links, September 1

Ex-girlfriend ignoring you? There's an app for that

Taibbi on TARP math: "like calculating fund returns by only counting the stocks that have gone up"

Stanford receiver Ralph Janvey has paid his PR firm $165k. Which doesn't seem to have done his image any good.