Tuesday links are likely to be disappointed

By Felix Salmon
April 28, 2009

Frozen-out Stanford investors petition Congress: They were happy parking their money in an offshore bank when it offered too-good-to-be-true yields. But now that bank has imploded, they want onshore financial protections. Good luck with that.

Maiden Lane Transactions: Lots more information on them than we’ve had until now, and all of this could easily have been published at the time they were set up. Alea says that the first one is “strangely made of 80% agency CMOs”.

Ben Graham would be proud: When two economically-identical instruments trade at wildly different prices: the GM example.

Heckle and Chide: Results of a Randomized Road Safety Intervention in Kenya: Putting up signs in minibuses seems to do a good job of reducing traffic accidents.

Blogonomics, or the economics of writing for “free”: Some good analysis from SMI.

Lazard Surprises the Street With a Loss: Even the advisory shops are losing money now.

Bank of America Chief in Battle to Hold His Job: There seems to be a real chance that shareholders might succeed in ousting Ken Lewis. It might not be probable, but the fact that it’s even possible is a sign of the times.


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Have you watched Eric Ronsenfeld’s talk at MIT about LTCM? It’s quite good. One of the more compelling parts of the lecture happened about 50 minutes in when he describes the Fed and the systemic dangers posed by the failure of LTCM. In particular, he talks about how hedged positions with low NET risk become two separate, unhedged positions were LTCM to have gone into bankruptcy, because LTCM hedged with different counterparties. Furthermore, he cites this specific effect as the Fed’s main worry back then. He also explains that this effect was also the reason why Lehman’s bankruptcy caused so much damage. (So much irony!)

Posted by Trieu | Report as abusive

Apropos the BoA piece and Lewis’s survival chances, it seems to me that one of the greatest institutional failures in this market crash is the refusal – through sloth or passive collusion – of institutional shareholders to wield the power of their vote. Witness the very high percentage of proxies voted in line with management during the past 2, 10, 50 or 100 years – pick your period – regardless of the economy.

It would be interesting to hear your analysis why passivity is preferred to activism, especially in these times when lots of CEOs should long ago have been directed to the unemployment office by their shareholders.

Posted by Thomas Pindelski | Report as abusive

I don’t like lookig at Felix every time a reuters news story is presented. He’s not he face or voice of anything. I expect reuters to be less promotional.


you don’t need to know my last name. I will have less faith in you and rely on reuters less in the future if you choose to not pay attention to comments like this.

Posted by mike | Report as abusive

Who is felix and why are we bombarded with him? Try living up to a higher standard of journalism.


Posted by mike | Report as abusive

Am I getting through that I don’t like Felix or are you simply resistant to any commentary that is contrary?

Posted by Mike S | Report as abusive

I will make sure to no longer click on reuters. It’s a shame after all these years. You are no longer reliable.

Posted by Mike S | Report as abusive