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.
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.
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.
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.
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:
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: