Felix Salmon

Exclusives, embargoes, and art indices

If it’s true, it’s great news that the WSJ is putting the kibosh on the ridiculous institution of respecting embargoes fed to them by PR agencies. For something as important as a national data release, I can see why it’s a good idea to implement such a thing. But when it’s just some private-sector flack trying to orchestrate a publicity drive, there’s zero reason for large publications to play along.

Wednesday links have second thoughts

Assessing Treasury’s Strategy: Six Months of TARP: A monster 151-page report from Elizabeth Warren.

Subscription website datapoint of the day

The NYT gets some subscriber numbers out of the FT’s Rob Grimshaw:

The Web site of The Financial Times, FT.com, had more than one million registered users in 2001…

Housing market datapoint of the day

It’s a familiar story, but it’s told well:

If ever a city stood as a symbol of the dynamic U.S. economy, it was Detroit… Detroit cared less about how it looked than about what it did—and it did plenty. In two world wars, it served as an arsenal of democracy. In the auto boom after World War II, Detroit put the U.S. on wheels as it had never been before. Prosperity seemed bound to go on forever—but it didn’t, and Detroit is now in trouble.

Regulatory arbitrage datapoint of the day

capitalcushion.tiff

This chart comes from an excellent new publication by Goldman Sachs, called “Effective Regulation: Avoiding Another Meltdown”. On the left hand side is the amount of capital that a bank would need to have if it had $100 of mortgages on its balance sheet: 5%, or $5. Once it securitizes those mortgages and they become RMBS, however, the capital needed drops to $4.10.

The US banking system’s terrifying balance sheet

bailout2.jpg

This is a spectacularly good piece of information design, from Tyler at Zero Hedge. It repays a lot of looking at, and manages to encapsulate both the scale of the US banking system and the scale of the solutions which have been announced or implemented to date.

Taleb’s necessary and impossible wish-list

I hate listicles. But every so often, one comes along which is utter genius, and Nassim Taleb’s list of “Ten principles for a Black Swan-proof world” is one of those cases.

The great Greg Newton

In the wake of the global financial and economic meltdown, I wrote a big article for Wired magazine about how it was largely enabled by something called the Gaussian Copula Function. But the whole article was written, naturally, with hindsight. Who saw it coming? Greg Newton, for one, who blogged the Gaussian copula back in September 2005, and concluded:

The option value of coinage

Is that a coin in your pocket, or is it a unit of long base metal with an embedded American put option with infinite time to maturity? According to a new paper by Espen Haug and John Stevenson, it’s both. And what’s more, that embedded put is highly volatile: