Felix Salmon

What do credit-card interest rates reflect?

May 22, 2009

Next time someone tries to justify those 28% credit-card interest rates by talking about the highly-granular and ultrawonky credit analysis that the card companies do, just point them to this post at Rortybomb. Or, if that’s too long and wonky, just ask them why all that highly-granular and ultrawonky credit analysis seems to treat everybody exactly the same way: 2 days late on your credit-card payment, and boom, your interest rate skyrockets.

The politics of rating the USA

May 22, 2009

When I said yesterday that any S&P downgrade of the USA “would be entirely political”, I was referring not to US politics but rather to the internal politics of S&P and even of McGraw-Hill, its parent: my guess is that no such decision would be made without the explicit consent not only of McGraw-Hill’s CEO but even of its board.

The reality of Google PowerMeter

May 22, 2009


Kevin Drum is getting a bit ahead of himself, I fear, in his embrace of Google PowerMeter. He reproduces this chart, and says that the

Citigroup’s doomed IT strategy

May 22, 2009

Why do I get the feeling I’ve seen this movie before?

Citi had originally estimated it could save $3bn over three years by rationalising its operations and technology functions, which employs 140,000 people including 25,000 software developers – more than many IT companies.

A public service announcement

May 22, 2009

Are you thinking of buying or reading Edmund Andrews’s book about how subprime lenders drove him to insolvency? Read this first. And thank your lucky stars that there are bloggers out there (in this case, Megan McArdle) who do a much better job of policing NYT journalists’ memoirs than any MSM journalist is ever likely to.

When long-term investors panic

May 22, 2009

The WSJ published a rather odd column by Neal Templin on Thursday:

My company retirement accounts, despite what I thought was a relatively conservative mix, were down close to 35% in early March from the fall of 2007. That, in turn, forced me to do some painful thinking…

The US triple-A: Nothing to worry about

May 21, 2009

Bill Gross seems to have caused a bit of an uproar with his off-the-cuff comment to Reuters:

Will consumers give up their credit-card protections?

May 21, 2009

Dear John Thain wonders whether credit-card companies might ask would-be consumers to “voluntarily” opt out of the protections they’ve been given under the new regulations being passed in Washington; their ability to opt back in again would exist in theory but in practice be very hard to find.

Can we inject uncertainty into monetary policy?

May 21, 2009

Just had an interesting lunch with Nick Denton, who clarified that his 27% rise in revenues was year-on-year in the first quarter, and that the second-quarter rise in sales is even larger. He also talked about his decision to cut back in the face of a coming recession: while he has pangs of regret about selling Consumerist, he said, he also feels that recessions can be helpful when it comes to forcing business owners such as himself to take tough decisions they otherwise might be able to avoid taking.