Felix Salmon

Regulators should play to their strengths

August 23, 2009

The first thing that regulators do isn’t regulate: the first thing that regulators do is try to maximize their own power. Then, and only then, do they even think about using that power. Item:

The Flaw of Averages

August 23, 2009

I’m not generally a fan of management books, maybe because I’m not a manager. So it’s probably just as well that I didn’t realize that The Flaw of Averages, by Sam Savage, was a management book before I started reading it. The highest praise I can give it is that I finished reading it — all the way through — which is something I don’t think I’ve ever done with a management book. Savage is a clear and gifted writer, which helps, and I’m interested in the subject matter, which also helps.

Those underperforming bond funds

August 22, 2009

Most investors have a significant exposure to bond funds. But according to S&P’s latest SPIVA report — by far the best comparison of fund performance to underlying indices — nearly all of those bond funds have underperformed their indices:

Friday links are significant

August 21, 2009

Bad idea du jour: Murdoch hiring bloggers, putting them behind a paywall

Koons’s personal collection: “Poussin, Dali, Picasso, Magritte, Picabia. Egyptian antiquities. And Manet’s last significant nude.”

Loans aren’t better than securities

August 21, 2009

A bad asset is a bad asset, whether it’s a loan or a security. And the distinction between the two isn’t particularly helpful, as is evidenced by equal-and-opposite newspaper stories today.

Disaggregating Zero Hedge

August 21, 2009

I first heard the name Daniel Ivandjiiski associated with Zero Hedge in March of this year, before the blog really took off. I do believe that he’s just one of many contributors who use the pseudonym “Tyler Durden”, but he’s the only one I’ve ever heard identified, and I think he’s been there for quite a while. He has reportedly said that he’s just a contributor, not a founder, but I’m not sure that distinction really means very much.

Where Rubin went wrong

August 21, 2009

Charlie Gasparino is right:

If there’s one certainty of the past decade of Wall Street greed and government mismanagement of the economy, it’s that Citigroup was a grossly mismanaged institution. Eventually, the federal government was forced to prevent what would have been the largest bank failure in U.S. history by pumping some $50 billion in capital into the bank, and guaranteeing hundreds of millions in toxic assets.

Should banks extend and pretend?

August 21, 2009

There was a nice little debate among the Reuters commentary group this morning about an increasingly-common way of dealing with dodgy loans: what some are calling “extend and pretend” and others refer to as “delay and pray”. Basically, you just roll over bad-but-performing loans as they come due, rather than take any losses associated with the borrower’s inability to make a big principal repayment. Rolfe Winkler, for one, thinks it’s a very bad idea:

The tattooed MBA

August 20, 2009

The conversation in the comments to my tattoo post has become very interesting, and now Ryan Avent weighs in with his take: