Felix Salmon

Catching up

May 18, 2009

So, what did I miss when I was off foraging for ramps (very successfully, I might add) in southern Vermont?

How much is rebalancing worth?

May 18, 2009

A couple of weeks ago, Lance Knobel asked me what I thought of MarketRiders after reading Erick Schonfeld’s write-up. I kept on meaning to get around to it — you know how these things are — but before I could, Ron Lieber beat me to the punch. Ron says he likes the service, which basically keeps track of your ETF portfolio and tells you when it looks like it’s in need of a rebalancing.

Hedge fund datapoint of the day

May 15, 2009

From Mark Gimein’s investigation of Paradigm:

An “Engagement Agreement” signed by Lotito, Jim Biden, and LBB Holdings, the partnership set up by the two Bidens and Lotito to buy Paradigm… promises James Biden and Lotito a “Placement Fee” of 10 percent of any money invested by clients they brought in.

A quick note on the yield curve for Alex Balk

May 13, 2009

Let’s say you have two apples. You’re scared of losing those apples, and you want to be sure that they’re absolutely safe. So you give them to the government, and in return the government promises to give you back two apples in a year’s time. You’re happy, and the government gets to eat your apples today, not worrying about paying you back until this time next year. So the government’s happy too. This is known as a “flat yield curve”, and it tends to happen when the economy is depressed and the general mood is rather grim.

Tuesday links have second thoughts

May 12, 2009

Bank of America to take Merrill public? Buying it was a pretty bad idea, so maybe selling it will work better!

Blaming CDS holders for a GM bankruptcy

May 12, 2009

The FT leads with a bold headline today: “Credit insurance hampers GM restructuring”. But the story itself is puzzling:

How to cure a municipal bond default with terrorists

May 12, 2009

Becky Shay reports on an empty prison in Montana:

The $27 million facility, which was built with revenue bonds, went into default last year. Bond payments are being made out of a reserve fund, which will have to be replenished and payments made, once revenue starts.

How much cap-and-trade is politically feasible?

May 12, 2009

John Kemp has a great column today on the politics of cap-and-trade in America. This is particularly interesting:

How we super-seniored the entire financial system

May 12, 2009

Gillian Tett was just in the office to talk about her new book; I interviewed her for Reuters TV, and the results should be up soon. But we got to chatting afterwards, and she made a great point which we didn’t cover in the more formal interview and which she says she would have liked to have put in her book. But since it’s not there, I can at least put it on YouTube. She talks about the Bistro deal (see Jesse for background on that), and how it can be seen as a metaphor for the financial system more generally: