We knew there was a lot of nuclear waste on Lehman’s balance sheet. But we didn’t know that was literally true:
Pejman Yousefzadeh is upset:
The brain drain that the American financial service industry may face thanks to increasing regulation, the pursuit of class warfare rhetoric and policies by the Obama Administration and its allies, and the tendency to blame the current economic downturn on entities like hedge funds, which had nothing to do with the financial crisis, will only serve to hurt the American financial service industry down the road.
Matt Taibbi is blogging over at True/Slant, the new website which managed to get itself a fully-fledged Mossberg review last week. Taibbi’s blog is fantastic, and the site looks great. But a few of the site’s early decisions make me bearish on its future.
Shortly after I started blogging for Portfolio, I was quite rude about a Ben Stein column in which he described the lack of any Wal-Marts in midtown Manhattan as “an enduring mystery of the retail economic world”. In September 2007, I officially started the Ben Stein Watch, on the grounds that “we have to stop Ben Stein from writing for the Times. Right now.”
Nick Gogerty has a great post using this chart to explain why mutual fund managers are doomed to underperform the stock market. Yes, stocks as a whole do rather well — but only if you include the really spectacular winners. If you buy the market and a whole and make money doing so, you’re basically following a strategy of making sure that you include the spectacular winners by making sure that you’re including pretty much everything.
Justin Fox does us all the favor of asking — again — why we’re bailing out banks rather than borrowers. If I had to give a simple answer, I’d say that it was because the failure of Lehman brothers has shown us that we simply can’t afford not to bail out the banks. If banks’ creditors in general, and their senior unsecured bondholders in particular, are forced to take massive haircuts on their holdings, we could suffer another sickening downward lurch in the fragile credit markets, with nasty knock-on effects for the economy.