Felix Salmon

Thursday links monetize their viewership

Waiting for CNBC: A tour de force from Tkacik.

Stress: A handy interactive graphic from the WSJ.

Rupert Murdoch’s empty defiance of the Kindle: Why is he trying to reinvent the wheel? See also Tomasky.

Stephen Friedman’s welcome resignation

As Kate Kelly prepares to launch her new book, she can add another scalp to that of Jimmy Cayne: Stephen Friedman, the chairman of the New York Fed, has resigned in the wake of her front-page article on Monday. His resignation letter is unapologetic (“although I have been in compliance with the rules, my public service motivated continuation on the Reserve Bank Board is being mischaracterized as improper”) — but if he really felt sure about that, it seems unlikely he would have timed his resignation to coincide exactly with the release of the stress-test results, thereby ensuring the absolute minimum amount of coverage.

The stress test’s biggest loser: GMAC

The stress test report is out, and the gory detail is all there on page 9 (which is page 10 of the PDF). The final row is the one everybody’s concentrating: the “SCAP Buffer”, or the amount of money these banks will need to raise in order to come into compliance with the stress test. By far the biggest number on that row is the $33.9 billion for BofA, but that’s just 2% of BofA’s risk-weighted assets. Check out, by contrast, the $11.5 billion that GMAC is being asked to raise: that’s a whopping 6.6% of risk-weighted assets.

The SEC is unsalvageable

This is one of the driest pieces of prose you’ve ever seen: a 64-page report from the Government Accountability Office on the subject of the SEC, entitled “Greater Attention Needed to Enhance Communication and Utilization of Resources in the Division of Enforcement”. The “Results in Brief” spreads over six pages and is full of stuff like this:

Which bankers will Treasury oust?

Ben Bernanke, Tim Geithner, and Sheila Bair have put out a statement which says that the stress tests aren’t just about capital:

The silly war on vulture funds

I was on The World Today this morning, talking about vulture funds:

The bill they’re talking about is this one, which is very similar to the Stop Vulture Funds Act being pushed by Maxine Waters in the US. Essentially it says that if you lend money to a country you have the right to get your money back — but if you then sell that loan to someone else after it has gone into default, the person you sold it to does not have the right to be repaid in full, and instead can only be awarded the amount they originally paid for the debt, plus a small set interest rate.

Bailout math, BAC edition

When the government announced stress tests on February 23, Bank of America stock closed at $3.91 a share. At that level, if the government converted $34 billion of preferred stock into common equity, it would have received 8.7 billion shares in Bank of America. There are 6.4 billion shares outstanding right now, which means the government would have ended up with a controlling 58% stake in the company.

CDS demonization watch, insurable-interest edition

A common meme among CDS pundits is that since credit default swaps behave in some ways like insurance policies, they should be regulated as insurance policies, and no one should be allowed to buy credit protection unless they have an insurable interest in the credit in question — that is, unless they loaned money to it.

Geithner’s TARP wish-list

Tim Geithner, in his NYT op-ed today:

Some banks will be able to begin returning capital to the government, provided they demonstrate that they can finance themselves without F.D.I.C. guarantees. In fact, we expect banks to repay more than the $25 billion initially estimated. This will free up resources to help support community banks, encourage small-business lending and help repair and restart the securities markets.