Felix Salmon

McNamara and model risk

July 7, 2009

Philip Delves Broughton notes that Robert McNamara, one of Harvard Business School’s most notorious graduates, basically did in the field of war what Wall Street quants did in the field of finance:

When journalism misses the big picture

July 7, 2009

Robert Teitelman thinks that since he’s in charge of a publication aimed at financial-market professionals, there’s no need to spend much effort on making it easy to read:

How did the automakers emerge from bankruptcy so quickly?

July 7, 2009

Micheline Maynard has a good 1,000-word article today on the surprising fact that both GM and Chrysler managed to exit bankruptcy in record time. But who or what should get the credit? Steve Rattner? The two judges involved? Section 363 of the federal bankruptcy code? And is this a heartening precedent for the wave of future bankruptcies which seems inevitable when all those leveraged loans mature over the next four or five years? Or is it a one-off, linked to extreme levels of government involvement, which is unlikely to be repeated?


July 7, 2009

Paul Collier is worried about the skewed incentives built in to any bonus system: the upside of taking risk — a big bonus — is much bigger than the downside if the risk blows up:

How to reform overdraft fees

July 7, 2009

A couple of very interesting comments have appeared on my blog entry on regulating bank fees in general, and overdraft fees in particular. J Mann asks what exactly I’m proposing, and what I think the consequences might be:

Why Mark Thoma doesn’t accept advertising

July 7, 2009

David Warsh has a good profile of Mark Thoma, who doesn’t get paid for blogging:

Regulatory arbitrage attempt of the day

July 7, 2009

Patrick Jenkins gives a good example of why insurance is not a sensible way to think about or regulate financial products:

Commercial real estate datapoint of the day

July 7, 2009

Worldwide Plaza is being sold after all (a previous deal fell through), and at what looks like a seriously knock-down price:

Why insurance commissioners should not regulate CDS

July 4, 2009

There’s a meme doing the rounds — I fear it may have been caught by my colleague Rolfe Winkler — that credit default swaps are insurance products, and that therefore they should be regulated by insurance regulators. So before this nonsense spreads any further, it’s worth explaining just why that’s a very bad idea.