Felix Salmon

Are private schools charitable institutions?

By Felix Salmon
August 25, 2009

In the US, I’m still holding out hope that university endowments will be taxed unless they can demonstrate that they’re actually spending their money on the public good. Thanks to the philanthrocapitalism blog, I now discover that a similar move is now afoot in England, which has told two independent schools that they will lose their charitable status unless they start educating poorer kids as well as those of the rich. The whines from the head of the Independent Schools Council are not very moving:

Annals of Icelandic overspending, Kaupthinking edition

By Felix Salmon
August 25, 2009

Baruch at Ultimi Barbarorum has uncovered this astonishing old ad for the now-highly-defunct Kaupthing bank:

Private equity releverages with a vengeance

By Felix Salmon
August 25, 2009

Warner Chilcott is paying $3.1 billion to buy the drugs business of Procter & Gamble. How much of that is its own money, and how much is debt? In the wake of the blowup of so many leveraged loans, one might expect the proportion of the sale price funded by banks to be low. After all, the banks don’t seem to be very keen to lend to anybody these days. But in fact, the banks are providing not half, not 75%, not even 95% of the total — they’re putting up a whopping 129% of the acquisition price.

Spain crumbles

By Felix Salmon
August 25, 2009

Neil Unmack is constructive about Spain in general, and Spanish banks in particular: Santander knows its own loan book better than anyone, he says, and if it’s happy to buy back billions of euros of its own bonds at 82% of par, it probably knows something the market doesn’t.

Regulatory consolidation

By Felix Salmon
August 25, 2009

Kevin Drum and Ryan Avent bring up the question of optimal regulatory structure, and I agree with both of them.

The good news about Bernanke

By Felix Salmon
August 25, 2009

It’s a sign of the severity of the financial crisis that Barack Obama is re-nominating Ben Bernanke as Fed chief now, in August, despite the fact that his term doesn’t end for another five months. It’s one of the few sources of potential uncertainty which the White House can address and resolve unambiguously, and it’s good that it’s happening.

Monday links have it both ways

By Felix Salmon
August 24, 2009

Krugman’s latest graph of U.S income inequality is fairly eye-popping

Noether’s theorem says a conservation law is a consequence of invariance, but in Santa Fe it’s the other way around

Reader’s Digest is still leveraged

By Felix Salmon
August 24, 2009

The implosion in the enterprise value of Reader’s Digest is astonishing — from $3.8 billion two years ago to somewhat less than $1 billion now, depending on how much the equity of the new company will be valued at when it emerges from bankruptcy, and assuming, generously, that the new debt is valued at par. Chelsea Emery talked to lawyer Richard Mikels:

Looking at banking in Switzerland

By Felix Salmon
August 24, 2009

I’m in Zermatt, Switzerland, where I’ve been invited to attend a symposium on the second anniversary of the financial crisis. I’ve only been to one presentation so far, but I’ve already learned two things: (a) that a lot of private bankers in Switzerland have degrees from the country’s famed hospitality universities (service culture is service culture, I guess), and (b) I can actually comprehend the gist of a speech given in German, if the slides are in English, and the points made are conventional enough.