Felix Salmon

Toxic asset datapoint of the day, Lehman edition

We knew there was a lot of nuclear waste on Lehman’s balance sheet. But we didn’t know that was literally true:

The secret stress tests

If a bank passes a meaningless stress test and nobody hears about it, will the Treasury market rally? Or will there just be lots more volatility in bank share prices?

Let’s hurt the American financial services industry

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.

Blogonomics: True/Slant fails the interactivity test

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.

Ben Stein Watch, RIP

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.”

Saturday links reach the end of the road

Job Sprawl: And why it’s not a great idea to start extrapolating.

Look Into the Sun: The no-advertising business model. Doesn’t seem to be doing particularly well these days either.

Stock return chart of the day

stocks.jpg

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.

Unemployment datapoint of the day

Justin Fox revisits the January payrolls report, and finds some scary numbers most of us missed the first time around:

Why it’s better to bail out borrowers than banks

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.