Felix Salmon

The ever-expanding FDIC

April 7, 2009

Andrew Ross Sorkin has been digging around in the FDIC’s charter, and has discovered that it is barred from incurring any obligation greater than $30 billion. Which is a bit inconvenient, seeing as how it’s about to guarantee as much as $1 trillion as part of the PPIP bank bailout program.

How much extra money is really in the G20 package?

April 7, 2009

First, there was the G20 communique:

The agreements we have reached today, to treble resources available to the IMF to $750 billion, to support a new SDR allocation of $250 billion, to support at least $100 billion of additional lending by the MDBs, to ensure $250 billion of support for trade finance, and to use the additional resources from agreed IMF gold sales for concessional finance for the poorest countries, constitute an additional $1.1 trillion programme of support to restore credit, growth and jobs in the world economy.

Another reason why inflation is a good idea

April 7, 2009

Megan McArdle is unhappy with the state of green consumption:

When I look back at almost every “environmentally friendly” alternative product I’ve seen being widely touted as a cost-free way to lower our footprint, held back only by the indecent vermin at “industry” who don’t care about the environment, I notice a common theme: the replacement good has really really sucked compared to the old, inefficient version.

Stanford’s last days of freedom

April 6, 2009

Allen Stanford has given an interview to ABC news, and it makes for compelling viewing. He’s tearful, he’s aggressive, he’s delusional, he’s hilarious: he seems entirely convinced that he wasn’t running a Ponzi scheme, even as he complains about being “forced to fly on a commercial plane for the first time in almost two decades”. My favorite bit:

Which is worse, the pyramid scheme or the PR firm?

April 6, 2009

I just got this press release from Ashley Wallace, of Ronn Torossian’s notorious 5WPR firm:

Monday links are fiscally expansionary

April 6, 2009

So let’s see if this stuff really works: Baruch on fiscal policy, making the point that while we can’t ignore the Great Depression, we also can’t use it as a useful precedent.

Useful foreign word of the day: herenakkoord

April 6, 2009

One of the handier concepts to have come out of a foreign dictionary during this crisis is that of Anstaltslast, the German idea that if the state owns a company, then there’s an implicit government guarantee on that company’s liabilities. Essentially, it means that once a bank is nationalized, you can lend to it as much as you like, safe in the knowledge that you’ll get all your money back in full and on time.

It’s a wonder anything ever gets done in Washington

April 6, 2009

I’m late to Phillip Swagel’s must-read account of the history of the financial crisis through the eyes of a Treasury official; David Wessel and Nemo have good summaries.

The Geithner Death Star

April 6, 2009

Mike at Rortybomb has a very scary and quite compelling post about the Geithner bank bailout scheme. Basically, he says, it looks very, very similar to the kind of schemes that Enron used to game the market back in the bad old days.