Felix Salmon

Friday links dress up

Felix Salmon
Aug 15, 2009 02:01 UTC

Vikram Pandit stabbed on CNBC

The WSJ’s cool bank-failure animation

You’re Paul Krugman, ferchrissakes. You think MSNBC won’t invite you back if you don’t wear a tie?

Jaw-dropping reporting on Fiji Water by Anna Lenzer in Mother Jones. Don’t miss.

This dress has been marked down by 91%! It must be a steal! Even if it’s fugly and $2,499

Amy Wicks says initial bids for BusinessWeek could be more than $35m, and then drop in subsequent rounds

What is it with Bloomberg’s Singapore bureau and uncritical interviews with investors talking their book?

Meredith Whitney is now a broker-dealer?!  

Annals of bonkers car-friendly policemen, part 451

You get drunk, you kill a pedestrian with your car, and you get…suspended for a season?


Zactly with that NFL suspension. How is it that Vick goes to prison for dog fighting, but Stallworth gets a slap on the wrist. Not saying Vick didn’t get what he deserved. Just saying that Stallworth isn’t getting anything close to what he deserves.

A good friend said it best, “If I ever get in big trouble, I’m calling Stallworth’s attorney!”

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Charts of the day: Securities regulation and national income

Felix Salmon
Aug 14, 2009 20:54 UTC

Ana Carvajal and Jennifer Elliott of the IMF have a new paper out which takes international data from Iosco, the International Organization of Securities Commissions, and looks at how assiduous regulators are in about 80 different jurisdictions. They’re looking at enforcement, which comprises three Iosco principles:

Principle 8: The regulator should have comprehensive inspection, investigation and surveillance powers.

Principle 9: The regulator should have comprehensive enforcement powers.

Principle 10: The regulatory system should ensure an effective and credible use of inspection, investigation, surveillance and enforcement powers and implementation of an effective compliance program.

They then chart whether these principles get implemented better as countries get richer:



The upshot is that although securities regulators’ legal powers are generally pretty much in place in poorer countries, they’re not effectively implemented there — in order to have any faith in your securities regulator, you basically need to live in a high-income country.

There’s also that interesting dip, in the lower chart: securities regulation is actually less effective in upper middle-income countries than it is in poorer countries. Maybe that’s because the elite in poor countries don’t need to flout securities laws to get rich: they only start playing in domestic markets, and enjoying de facto impunity there, when their countries become that much more developed.

Advice for infrequent bloggers

Felix Salmon
Aug 14, 2009 19:43 UTC

I never find status-update posts (“I’ll be away from this blog for a while”) particularly helpful, so I tend not to indulge in them myself. But at least I have some non-negligible number of readers who return to the blog on a regular basis and might conceivably wonder what happened to me. If I was a blogger with the grand total of one blog entry since May, why would I put up a post saying I was back? Conversely, if I was a blogger who had posted just two blog entries since June, why would I put up a post saying I was going away?

Of course, the great thing about blogs is that you can say whatever you like, no matter how banal. But at the same time, the great thing about RSS is that you don’t need those regular readers in order to get read: your subscribers will read you if and when you post something, and they’re quite likely to be the readers with their own blogs, who will link to you and get the news out that way. I have dozens if not hundreds of infrequently-updated blogs in my RSS reader, and I generally prefer them to the frequently-updated blogs: when something appears in them, there’s a good chance it’s pretty noteworthy. Unless, of course, it’s just a status update.


Lazy and spasmodic bloggers, among whom I number myself, can only hope that RSS becomes more popular outside journalistic circles.

The AP’s be-evil policy

Felix Salmon
Aug 14, 2009 17:40 UTC

Zach Seward got himself a great scoop when he procured a confidential AP memo which takes a very aggressive stance about protecting the company’s intellectual property. Here’s how the memo begins:

The evidence is everywhere: original news content is being scraped, syndicated and monetized without fair compensation to those who produce, report and verify it. AP’s legal division continues to document rampant unauthorized use of AP content on literally tens of thousands of Web sites. The problem is quickly spreading to mobile, where new applications are cropping up daily that do little more than repackage the efforts of AP and others, siphoning off consumers and revenue from those whose content is being exploited.

It continues by talking about “the urgent need to regain control”, adding that “it is difficult to overstate the importance of taking action at this moment… AP has both business and legal imperatives to assert its intellectual rights”.

This is all pretty unambiguous stuff. But Seward seems to be backpedalling desperately from the obvious conclusions, after one conversation with the AP’s general counsel, Srinandan Kasi.

Kasi said that the AP thought Andy Baio’s Associated Repress site was “wonderful”. He said that a hypothetical blogger copy-and-pasting an entire news article would probably be “perfectly fine”. He even, pace those “new applications cropping up daily” in the mobile space, said this:

A mobile developer who wanted to include the AP’s articles or videos in an iPhone application could do so, probably without paying for access. Addressing the hypothetical developer, he said, “If this becomes a runaway success, I want to be part of this kind of business arrangement with you. In the meantime, if you want to experiment, go at it.”

The impression that Kasi gives, via Seward, is that the AP is benign at heart:

When you look at the things that we’ve actually enforced or pursued, it’s a small handful of situations. Even the ones where there’s a lot of noise being made, it is to point out the kind of conduct, of systematic conduct that we want to have addressed. But if you really push it to the extreme of, ‘OK, how many do we legally enforce in a court of law?’ It’ll be less than the number of fingers on a single hand.

This is really hard to square with the black letter of the memo, with its talk of the “legal imperatives” facing the AP. And in fact, if you examine it closely, it’s much more invidious than it sounds.

Essentially, the AP is encouraging the rest of us to remix its work — on the understanding that, statistically speaking, most of us will fail. On the other hand, if we succeed — if we go viral, like Shepard Fairey, or start making non-trivial ad revenue, like Newser, then they’ll come at us with expensive lawyers, and they won’t be friendly. What’s more, they feel that it’s strategically necessary to be very aggressive in protecting their intellectual property in such situations.

This isn’t a FUD campaign designed to make people wary of using AP content. It’s worse than that: it’s an attempt by the AP to outsource innovation to others, and then, in the handful of cases where the innovative gamble pays off, grasp substantially all the benefits of that innovation for themselves. Call it a “be evil” strategy. How else can you explain the Fairey lawsuit?


To be a bit fairer to AP here, they are also just following a standard yield management principle for intellectual property enforcement: go where somebody is making some dough, so you can get a share.

An example from another business is Microsoft Office. Worldwide, millions of people pirate it, including a majority of consumers in the US. But Microsoft focuses enforcement on businesses, where the money is easy to collect, and on large scale pirates, where the impact is great. The rest of us, not so much.

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How the Fed second-guesses its own independence

Felix Salmon
Aug 14, 2009 16:56 UTC

Greg Ip says that the Fed would have expanded its quantitative-easing program by now were it not for political considerations:

If the programmes are doing some good, why is the Fed not expanding them? The outlook has improved, for one thing: America’s economy is levelling out, it noted on August 12th. But the main reason is political, not economic. The Fed’s Treasury-purchase plan prompted charges that it was inviting hyperinflation and had subordinated itself to the government’s deficit needs. Alan Greenspan, a former Fed chairman, says inflation will exceed 10% if the Fed fails to shrink its balance-sheet and raise rates, and 3% for a time even if it does.

Needless to say, that is not the Fed’s view: it still foresees rising unemployment and falling inflation. But many officials have concluded that, for now, the benefits of buying more Treasuries do not outweigh the costs of a damaging rise in inflation expectations and a perceived loss of independence.

I can see why the Fed would decide against printing more money if doing so raised inflation expectations in a harmful manner. But that’s a basic consideration in making monetary policy decisions, and doesn’t really count as “political, not economic”.

So what’s the political consideration here? If second-guessing politicians means that the central bank fails to do something it would otherwise have done, then that central bank has lost independence. If the Fed’s doing what the politicians want, it has lost independence already. So what’s it worried about?

I think that what Ip is trying to say is that central banks have a lot of independence so long as inflation expectations are low, but if they’re perceived to have lost their grip on inflation, then that perceived independence can evaporate very quickly. (This is all about perceptions, interestingly enough: inflation expectations, rather than actual inflation and perceived independence, rather than actual independence.) And so in order to maintain a reputation for independence, they will be inclined to favor the arguments of political hawks. It’s a way of second-guessing themselves into having less independence in reality, just for the sake of keeping more independence in the public mind. Or something.

That said, at the margin, this phenomenon acts in favor of tighter monetary policy, even as politicians generally tend to agitate for looser monetary policy. So maybe these things largely cancel each other out.


Protection of big brother bank is more important then public interest. 1) Fed by large part controlled by big brother bank. 2) US government policies are by large influenced by large corporate sponsorship.

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Art in a recession

Felix Salmon
Aug 14, 2009 15:13 UTC

In 2007, hot young artist Doug Aitken unveiled a massive public video-art project at MoMA. Sleepwalkers featured A-list celebrities, acres of publicity, and millions of dollars in production costs; its Flash site alone almost certainly cost many multiples of the total budget for Those About to Die Salute You, the utterly insane and hugely enjoyable public-art project put on by Duke Riley at the Queens Museum of Art last night in conjunction with the Brooklyn Museum, Bronx Museum of the Arts, and El Museo del Barrio.

Do check out the Flickr slideshow of the event, or you could try my own wobbly video, which at least gives a flavor of just how anarchic the whole thing was, and how much fun everybody was having.

The two events encapsulate a lot of the upside to the downturn in the art market. The expensive Manhattan-based project was somber and highbrow and quiet; the cheap chaos in Queens was raucous and bloody and quite probably illegal, especially when the fireworks started exploding at the end. (No wonder the museum director was looking a little stressed.) The MoMA project was organized to the finest detail, and projected onto Yoshio Taniguchi’s pristine walls; there was a vague plan behind the Riley event, but it started going awry at roughly the time that the toga-clad crowd started throwing tomatoes at each other before the boats had even appeared, and it all went magnificently downhill from there. (Perhaps the free beer for anybody in a toga played a part.)

free beer

Needless to say, this is not the kind of art that highbrow art collectors tend to spend millions of dollars on — while Duke Riley is doing admirably well as an artist, financially speaking he’s no Doug Aitken (yet). But then again, the art market, with its obsession with price as an indicator of quality, was the last thing on anybody’s mind last night. We were far too busy throwing tomatoes, getting wet, and enjoying the freedom that comes with near-zero budgets.

Update: The NYT has some great reporting; Gothamist has  fabulous photos.


I think we as a nation should start working together to change the way our country is going by helping those who are feeling it the hardest and helping to stop families from losing their homes in foreclosure and evictions. We like to say that the government should be the ones to take over. I say its time to stop waiting and start changing. If each person who says “there’s nothing I can do to change the economy donated fifty cents to a dollar to charities like
http://WWW.HELPFOROURHUMANITY.COM, it would end tens or thousands of families depression from this recession which would free up spending from stressed families , help create jobs through work programs, and circulate funds through out the community starting from the mortgage company, and landlord, on down to the plumber who can now afford to be hired, and the store who gets his business for the part. So I say suck it up America and lets finally become a nation that helps its self instead of waiting to see others do what needs to be done now.

- Posted by Chris

Truth in public relations, Blackstone edition

Felix Salmon
Aug 14, 2009 13:43 UTC

Blackstone’s Steve Schwarzman made a ridiculous $702 million last year, according to The Corporate Library, and Scott Malone of Reuters phoned for a reaction:

“This is absurd,” said Blackstone spokesman Peter Rose.

Well, yes, Peter, it is. But maybe not in the sense that you mean.


Oh Felix, you are so funny. Of course over 99% of this “compensation” is the vesting of equity grants he received in exchange for his partnership interest in the firm he founded, and thus is simply paper-compensation (he owns the same amount of the firm, before and after vesting). But why get facts get in the way of a good laugh.

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Thursday links regress

Felix Salmon
Aug 14, 2009 05:03 UTC

Why is it so hard to find a foreign-bond ETF?

The Bernie Madoff Dining Index

“Thinking up the right regression to run can be worth millions.” (Irony alert: This appears on Steve Levitt’s blog.)

Not only does the iPhone blend, it also burns! And gets shot up with a 9mm pistol! To an Arcade Fire soundtrack!

What it’s like to eat at El Bulli, told in a photographic cartoon.

Gawker reads Sarah Palin’s new Facebook post and says “there’s just no way” Palin wrote it.

The NYT’s refreshing wine club

Felix Salmon
Aug 13, 2009 21:08 UTC

The New York Times needs all the revenue sources it can get right now, so it’s licensed its brand to the Global Wine Company and created the New York Times Wine Club. This is a good thing, and not only because it brings money into the NYT’s coffers: it’s also the first such wine club I’ve seen which works in a non-evil manner.

Yes, like other wine clubs, you can sign up to receive a shipment of wine every 1, 2, or 3 months. But unlike any other wine club I’ve seen, you can also simply order a single shipment of wine, without then having to opt out of getting future shipments automatically.

I have no idea whether these wines are any good, or worth the money. But I do know that any “club” which doesn’t try to lock you in to a subscription is breath of fresh air.


Ironically, as I read this in this morning’s NYT an advertising insert for the WSJ Wine Club fell out of my paper!

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