Felix Salmon

Laura Conaway asks why pedestrians walk in bike lanes, and reprints the photo above, which might well have been taken on Broadway, just south of 42nd Street. I know that stretch well — I bike down it on my way from work — and in general I stick to the road-for-cars, rather than risking life and limb on the bike-path-for-bikes.

This is a badly designed bike path, because of the location of the pedestrian zone you can see on the left hand side of the photo. There’s the sidewalk, and then the green bike path, and then the brown pedestrian zone, and then the black car lanes. When Broadway is bustling with foot traffic, it’s only natural for pedestrians to move back and forth between their two zones, especially during times when bike traffic is light.

But more generally I think it’s just that pedestrians were taught the rules of walking on streets by recourse to fear: look both ways, lest you get run over by a car. The natural corollary to such thinking is that if there’s no danger of getting run over by a car, there’s no need to look out for traffic. (If and when pedestrians do see me biking down the lane, they’re generally good enough to stay out of my way; the much bigger problem is the oblivious pedestrians, often listening to their iPods, who have no idea I’m there, and never stop to look.)

There’s also the natural impatience and pushiness of New Yorkers, who have a natural tendency to use bike lanes as a staging point in their rush to cross the street. No one in New York waits patiently on the sidewalk for the lights to change; instead, they inch forward on the road as far as they can without walking straight into the path of cars. They don’t worry about getting into the path of bikes, though, and if they see a bike coming, they generally stay put, since they couldn’t possibly step backwards. And if they’re crossing mid-block, which they often do, they generally take one step out from between parked cars before looking for traffic, since they know any car driving down the road won’t drive that close to the parked cars. (Bikes, again, they just don’t think about.)

Bicyclists, I have to say, are just as bad, if not worse: at intersections they never stop where they’re meant to, and instead stop either (a) right in the middle of the pedestrian crosswalk, or (b) right in the middle of the cross-street’s bike lane. (And don’t even get me started on the “bike salmon” who ride the wrong way down the block and seem to think that all bike lanes are two-way streets.) Although bikers get very mad at motorists, the fact is that car drivers are much more law-abiding than either bicyclists or pedestrians, and tend not to feel that the rules don’t apply to them. I’ve even noticed an increasing number of car drivers who seem to know the difference between a bike lane and a left-turn lane.

In northern Europe, everybody tends to be much better behaved. I think that’s learned: as the number of cyclists in a city rises, two things happen. Firstly drivers and pedestrians become more conscious of the fact that a cyclist is likely to be on the road. And secondly there’s an increasing number of what you might call non-brave cyclists, who don’t consider biking to be some kind of urban warfare and who are more likely, at the margin, to simply follow the rules of the road which they know so well from driving cars. Eventually their good behavior rubs off onto the more reckless.

Ultimately I think it all comes down to a combination of visibility and civility. As bikes and bikers become more visible, everybody else will be more conscious of them. And as they feel more noticed and less victimized, they will start to behave more responsibly to other road users, on foot and in cars. Who will then start to reciprocate even more. The problem is this takes years; it doesn’t happen overnight. And in the meantime there will be nasty bike-pedestrian collisions, some of them unspeakably tragic. My friend Josh Phillips died in 2006 after hitting a pedestrian on his bike. The pedestrian wasn’t malicious, just oblivious. But that’s no solace to Josh’s family and friends.

Update: Walking back from lunch, I noticed this scene on 41st and Broadway. You can shout as loud as you like, this obstacle won’t get out of the way. And as a result you can see two bicyclists having to detour into the pedestrian zone.

After a decade of Manhattan apartment prices going up, it’s only reasonable to expect them to go down for a few more years at least. That’s one reason to rent rather than buy right now. Another is that renting is still substantially cheaper than buying. So the rental market should be quite hot, right? Not so much:

We just released our rental report for the second quarter and the results sounded vaguely familiar to the sales trends. Rental inventory is rising at a 28.8% clip. There was a 17.5% year over year decline in rental price per square foot and a 58.3% decline in the number of new rentals.

Part of the problem is that apartments which just can’t be sold are being rented out instead. (Think Tim Geithner.) As a result, rental inventory is rising fast, which is depressing rental prices.

But what explains the plunge in the number of rentals? It seems that in a down market, people are simply much less likely to move house than they are in an up market — and that goes for renters as well as buyers. Partly, I’m sure, the reason is the depressed job market: new jobs are a big reason for people to move. But can that explain a 60% decline in rentals even as there’s a sharp drop in sales as well?

Jimmy Lee on Rupert Murdoch, after the successful acquisition of Dow Jones:

James B. Lee of JPMorgan Chase & Company, who has represented clients in some of the biggest deals in history, said of Mr. Murdoch, “nobody else I have ever banked could have pulled it off.”

Rupert Murdoch on Jimmy Lee:

News Corp.’s Murdoch says he consults regularly with Lee, and gives him a great deal of credit for helping him buy Dow Jones in 2007 — a deal many believed was impossible, because the Bancroft family that had owned the company for 105 years was thought to be totally opposed to the idea.

“He knew it was something I’d given a thought but he actually made the contacts and got things together,” Murdoch told TheStreet.com. “Without him it wouldn’t have happened or would have happened much later.”

Robert Reich blogs the recovery, and says something very similar to what I said yesterday in San Diego:

My prediction? Not a V, not a U. But an X. This economy can’t get back on track because the track we were on for years — featuring flat or declining median wages, mounting consumer debt, and widening insecurity, not to mention increasing carbon in the atmosphere — simply cannot be sustained.

The X marks a brand new track — a new economy. What will it look like? Nobody knows. All we know is the current economy can’t “recover” because it can’t go back to where it was before the crash. So instead of asking when the recovery will start, we should be asking when and how the new economy will begin.

This is related to Mohamed El-Erian’s “new normal” idea — while previous recessions were part of economic cycles within a certain economy, what we’re going through right now is a painful disruption from that economy to something else. I fear that the flat or declining median wages, however, might well survive the transition — at least so long as unemployment continues to remain as high as it is now. Which is one reason not to worry overmuch about inflation: if consumer spending accounts for 70% of the economy, and consumers don’t have any money, it’s really hard for prices to rise very quickly.

JP Morgan has taken an entirely sensible step with respect to the pricing and sale of its TARP warrants:

The bank has waived its right to buy the warrants and will allow the Treasury to auction them in the public market, which bank executives say will result in an actual market price.

This is a great idea: just auction the warrants off to the highest bidder. Banks want the warrants to be bought, because it reduces the amount of control that the government has over them. But they don’t necessarily have any particular need or desire to buy back those warrants themselves — the same end can be reached by means of selling them to some other bidder. And the less of their own capital they spend on warrant buy-backs, the more well-capitalized they are and the less prone they are to government interference.

Under the terms of the TARP recapitalizations, it seems that banks have to give their permission before the warrants can be auctioned. Banks should go ahead and give that permission with alacrity, especially if their chances of buying back the warrants on the cheap have now dwindled away. If someone else buys the warrants, banks get all the upside of removing themselves from the government yoke, with none of the downside of having to pay lots of money to do so.

Fake Alpha

The market’s inflation expectations are hard to find. But possible! http://bit.ly/4lB2lS

I’m sure I’m way late to this, but I just found Rob’s Transformers 2 FAQ and boy is it genius

Bundanoon, Australia, may be first town in world to have banned bottled water

Fischer Black, prescient futurist

USA Today with the best story yet on the “overdraft protection” racket

If this happens, I’ll cancel my print subscription.  I need to be able to share the stuff I’m reading.

Kwak schools Carney on bankslaughter; Avent also piles on

The new edition of Garner’s Modern American Usage

Jesse Eisinger joins ProPublica

What on earth are the regulators doing objecting to the new consumer-protection agency?

City Walks Architecture: New York

I’m no great fan of the Senate, and especially of the way in which you seem to need a 60-40 supermajority to get just about anything passed these days. But then along comes the House to make the Senate look great:

A majority of House members have signed onto a bill to reverse the closing of 789 Chrysler dealerships and block General Motors Corp. from closing more than 1,300.

Notes Kevin Drum:

This is a wholly nonideological porkfest, with 133 Democratic cosponsors and 88 Republican cosponsors. (So far.) Which just goes to show: under the right circumstances, bipartisanship isn’t dead after all.

In our bicameral system, this is exactly the kind of thing that the Senate was designed to stop becoming law. Congressional districts are small enough that individual auto dealers can wield a lot of power with their Congressperson; states, by contrast, are large enough that individual auto dealers have little if any clout with their Senators. But it’s still utterly depressing that Congresspeople are out signing the Automobile Dealer Economic Rights Restoration Act of 2009, which is designed to do an end-run around one of the most successful bankruptcy proceedings in living memory, and which would singlehandedly put the US auto industry onto yet another road to ruin.

I can hope only that this is gesture politics: safe in the knowledge that this act will never become a law, politicians can sponsor it without fear of its repercussions. Ah, the circus that is DC.

Although I’m generally a fan of credit unions, and I’m certainly a fan of bicycling, I’m not at all a fan of this new bike-loan product:

* Rates as low as 7.50% APR*
* 12-month term
* Borrow up to $2,500
* 100% financing of bike plus accessories

One of the best things about bikes is that they’re cheap. Yes, it’s easy to spend $2,500 on a bike if you put your mind to it — or much more even than that. But the only people buying $2,500 bikes should be people who can easily afford to pay cash for them: no one should be taking out a loan for that kind of luxury.

With any luck Eric Matthies will weigh in on this question on his blog — he knows much more about biking than I do. But my gut feeling is that the price-quality correlation when it comes to bicycles is pretty low, and that much of the time it’s actually negative. (What you gain in terms of lower weight — which is generally what you’re paying the big bucks for — you often more than lose on the functionality front.) If Portland credit unions want to encourage daily bicycling, I don’t think that a $2,500 racing bike is exactly what the doctor ordered.

I’ve spent the past day in San Diego (that’s why blogging’s been light) and my mode of transport while I was here was a rented Bianchi Cortina — a very nice bike which retails at $429. My feeling is that $400 is pretty much the maximum sensible price for a new bike for anybody who needs to borrow money to buy one. Maybe make it $500 with the accessories (helmet, lock, lights) included. But $2,500 is just silly.

Update: Eric Dewey from the credit union offering the loan pops up in the comments to say that the high limit was put in place as a sign of support for Portland’s custom bike builders. Which is nice. But I still like to think that we’re moving towards a world where people only buy a custom bike after they have the money to do so.

Yes, Vikram Pandit is still a robot. Here’s his latest press release:

Vikram Pandit, Chief Executive Officer of Citigroup, today announced several senior management changes to support the company’s business and strategic priorities and to ensure that proper management is secured to lead these efforts.

“Our relentless focus on executing against our strategic priorities at Citi continues as we remain focused on rationalizing Citi Holdings, and on Citicorp as our core operating business,” Mr. Pandit said. “We are making consistent and substantial progress towards these goals. The senior management changes I am making today will further help in positioning our company for the future.”

Some of these changes make sense — Bill Rhodes, for instance, was always CEO of Citibank more in name than in fact. But others simply smack of yet more deckchair rearrangement, especially after the last reshuffle, in August, has already been re-reshuffled. It can’t be good that Citigroup is now on its fifth CFO in as many years. And it’s certainly not good that Pandit announces these major changes with a bunch of meaningless management jargon instead of any kind of vision.

Those first two paragraphs of the Citi press release are worth reading closely, since they reveal how utterly vapid the Citi business model really is. When all you can do is talk in a pro-forma way about “strategic priorities” and “positioning our company for the future”, it’s pretty clear that you don’t really have a clue what you’re doing, or why.

CEOs always resort to increasingly-frantic and increasingly-frequent management reshuffles before they themselves are ousted. And with the well-respected commercial banker Gene McQuade now running Citibank, I suspect the board will be mulling seriously whether they should elevate him to the top job. I give him a year to prove himself at Citibank, and then, if he succeeds, the poisoned chalice that is the job of Citigroup CEO is probably his if he wants it.

Anecdotally (which means that I don’t have any empirical data on this, but it feels this way), transportation spending is second only to defense spending when it comes to waste, inefficiency, and a general syndrome of money going to politically-influential districts rather than where it would make the most sense.

But then the Obama administration started banning earmarks in the stimulus bill and, I thought, leaving decisions on the allocation of funds to an independent central authority rather than to bickering legislators. I was rather surprised, then, to read this:

The stimulus law provided $26.6 billion for highways, bridges and other transportation projects, but left the decision on how to spend most of it to the states.

The results have been predictable: disproportionate amounts of money for roads in the middle of nowhere, while important urban transit projects go unfunded. Seattle, for instance, got none of the first tranche of federal stimulus funds; Charlotte got less than 2% of North Carolina’s.

This is why we need an Urbanist Party: so that city-dwellers can finally punch their weight in politics (Obama is the first president from a city in living memory) and so that local, state and federal government starts paying much more attention to the people who really make any modern economy run.