Felix Salmon

When demand slopes upwards

November 9, 2009

At least between, say, $3 and $6 per bottle:

Supplying wine to sell at $5, $4, $3 or even two bucks per bottle is not that difficult once you set out to do it. Cheap surplus grapes, cheap surplus wines, low-cost winemaking processes and economies of scale all contribute to extreme value supply. Nope, supply is easy. The challenge, until recently at least, has been selling the stuff.

Airport security datapoint of the day

November 9, 2009

The GAO reports on the TSA. File under “why doesn’t this surprise me”:

TSA lacks assurance that its investments in screening technologies address the highest priority security needs at airport passenger checkpoints. Since TSA’s creation, 10 passenger screening technologies have been in various phases of research, development, test and evaluation, procurement, and deployment, but TSA has not deployed any of these technologies to airports nationwide… Deployment has been initiated for four technologies–the ETP in January 2006, and the advanced technology systems, a cast and prosthesis scanner, and a bottled liquids scanner in 2008… in the case of the ETP, although TSA tested earlier models, the models ultimately chosen were not operationally tested before they were deployed to ensure they demonstrated effective performance in an operational environment. Without operationally testing technologies prior to deployment, TSA does not have reasonable assurance that technologies will perform as intended.

Doing due diligence on Galleon

November 7, 2009

I’m late to Sam Jones’s article about investors who did due diligence on Galleon and decided to stay away, but I think it raises a number of silly ideas which ought to be put to rest.


November 7, 2009

“The Volkswagen Beetle did far more damage to the environment than the Hummer ever did, or will” — TBM

Mutual fund fee datapoint of the day

November 6, 2009

What happened to mutual-fund fees and expenses in the wake of the financial crisis? Lipper has crunched the numbers, and it seems that the tumble in the stock market didn’t have much effect on expenses:

John Reed apologizes

November 6, 2009

John Reed wasn’t even on the list of people who I thought should apologize for their role in creating the bubble which led to the financial crisis. But good for him for doing so:

Headless BofA

November 6, 2009

Mark DeCambre is right: it seems that BofA is going to remain headless at least until Thanksgiving. No outsider seems to want the job — the list of people who have turned it down seems to include everybody who works or has ever worked at JP Morgan, plus former BofA executive Michael O’Neill, who went on to head up both Barclays and Bank of Hawaii. Meanwhile, the leading insider, Brian Moynihan, can’t conceivably be tapped until after his Congressional testimony on November 17.

A global problem with no solution

November 6, 2009

Mohamed El-Erian, the CEO of Pimco, sent me a note this morning which sums up the dire straits of the economy, as revealed in today’s employment report, in one sentence:


November 6, 2009


In October, the number of unemployed persons increased by 558,000 to 15.7 million. The unemployment rate rose by 0.4 percentage point to 10.2 percent, the highest rate since April 1983. Since the start of the recession in December 2007, the number of unemployed persons has risen by 8.2 million, and the unemployment rate has grown by 5.3 percentage points.