Felix Salmon

Banks Fire Back at the US Government

March 11, 2009

The NYT and the WSJ both have big articles today on how highly-paid bankers are chafing in this brave new world of government restrictions on things like how much they’re paid. The NYT says that a lot of banks are itching to give their TARP funds back to the goverment, in order to give themselves more freedom of movement, while the WSJ looks at a lot of senior bankers simply leaving their jobs voluntarily, since "at the moment, no one can tell bankers whether they will or won’t get paid for the work they do in 2009".

Citigroup Questions

March 10, 2009

Are you reading thousand-word stories about how Citigroup managed to propel the stock market upwards on Tuesday? Bear in mind this: Citigroup rose the grand total of 40 cents per share — which means that its contribution to the 379-point rise in the Dow was a whopping 3 points. And at $1.45 a share, Citi is still, to all intents and purposes, trading at zero.

Was it All the Fault of the Quants?

March 10, 2009

The most emailed article on nytimes.com today is Dennis Overbye’s piece on quants — which has already resulted in something of a smackdown from Rick Bookstaber.

Quick Hits

March 10, 2009

I’m about to get on a plane, and don’t have the time to get to all of the stuff I want to write about. So a few quick hits:

Negative Global Growth

March 9, 2009

The World Bank’s pronouncement over the weekend is sobering:

The global economy is likely to shrink this year for the first time since World War Two, with growth at least 5 percentage points below potential.

Geithner to Citi?

March 9, 2009

I’m late to Joe Hagan’s profile of Vikram Pandit, and especially this intriguing passage about the decision about whom to replace Chuck Prince with as CEO of Citigroup:

Larry Gagosian, Too Big To Fail?

March 9, 2009

David Segal’s NYT profile of Larry Gagosian slaps the TBTF label on him:

Mr. Gagosian has achieved the contemporary art market’s version of too big to fail, though for reasons that have nothing to do with toxic assets. The glamour and networking energy that he has brought to the business added a zero to the price of just about everything, Ms. Bortolami says. If his business were to fold, the new buyers he brought to the market, as well as a lot of added, buzz-laden value, would disappear along with him.

Berkshire, Leverage, and Triple-A Ratings

March 9, 2009

On Saturday I said, without spelling things out, that all insurance companies are leveraged financial institutions. This resulted in pushback from Cap Vandal:

Souring FHA Loans

March 9, 2009

Well, that didn’t take long. In November, BusinessWeek had a big cover story on the way in which dodgy subprime lenders were moving into the formerly safe-and-boring world of FHA loans. And now the shoe is dropping: