Felix Salmon

Bair’s chutzpah

Many thanks to Paul Solman for putting my question to Sheila Bair. Her answer is quite astonishing in its chutzpah:

The too-big-to-fail debate continues

Economics of Contempt defends too-big-to-fail banks:

The point of creating CDOs was to generate a mezzanine tranche, which investors, who had a seemingly insatiable thirst for yield, would gobble up. Goldman (and other dealers) couldn’t place the super-senior tranches, so they held the super-seniors on their books and hedged all that risk by buying CDS protection from AIG (and the monolines)…

Two safe havens

I got two smart responses to my assertion that there’s no safe haven for investors these days. Jared Woodard at Condor Options responded with 1,500 words on how investors in an S&P index fund can buy put options to protect their downside: “any hedging at all is better than none,” he writes. Meanwhile, maynardGkeynes left a much shorter comment:

Awarding online journalism

I got a phone call this morning from one of the judges of the Loeb awards. A Loeb is one of the high-prestige gongs that important business and financial journalists love to award to each other, and it’s a fundamentally conservative animal: the NYT and WSJ always get lots of nominations and awards, and the winners are generally the kind of long-form investigative pieces which, say, the Pulitzer jury loves as well.

Counterparties

Craig Brown channels Gladwell — VF

James Meek meets President Obama in Arlington — NYDN

Thanksgiving feast, circa 1881 — NYT

A gorgeous power-of-ten visualization — Utah

Lou Dobbs, in verse — Newsweek

One advantage of citizenship over a green card: authorities can’t threaten you with deportation to get a plea bargain — WSJ

Will small banks replicate big banks?

Mark Gimein says that we shouldn’t worry too much about the problem of too-big-to-fail, because the alternative to one big bank failing is lots of small banks failing:

Strange bedfellows: Jon Stewart and Patrick Byrne

Remember the Jon Stewart interview of Jim Cramer where Stewart pulled out a secret weapon to unleash upon his unsuspecting guest?

The Goldman Sachs Foundation’s torrid 2008

Goldman Sachs has provided Reuters with a copy of the Goldman Sachs Foundation’s 2008 tax return. Why the NYT didn’t just put it online I have no idea, but in any case here it is, all 297 pages of it.

Happy 10th birthday, Financial Modernization Bill!

Ten years ago today:

SEC. SUMMERS: Let me welcome you all here today for the signing of this historic legislation. With this bill, the American financial system takes a major step forward towards the 21st century, one that will benefit American consumers, business, and the national economy for many years to come…