Felix Salmon

Citi’s expensive TARP exit

Citi’s paying big to exit TARP:

The moves will result in a pre-tax loss of $10.1 billion that will likely be taken in the fourth quarter from accounting charges taken on the value of the repaid preferred shares and the cancelation of the insurance plan. The new stock offering, meanwhile, will severely dilute erode the value of existing Citigroup shares.


Charlie Calomiris owns a bank! Which just got seized by the FDIC! — WaPo

Toyota to sell plug-in hybrid within two years getting 134 mpg — Bloomberg

Too-big-to-fail advertisement of the day

Here’s a full-page ad I just found in the WSJ; it seems that Bank of America considers $760 billion in lending to be “a good start”. Me, I consider it to be “too big to fail” and a clear sign that BofA needs to get smaller, not bigger. I do wonder: is there any point at which BofA would consider itself to be too big? Judging by this ad, it seems the answer is no.

How smaller banks would have helped shrink the CDO market

The WSJ has new details on how banks would pass CDO risk between each other in an improbably long chain:

Drug money and the financial crisis

How much money does the international drugs trade make, and how much of that money helped out the global banking system when liquidity dried up last year? According to the UN, the answer to both questions is “a lot”:

The upside of lo-fi

Tyler Cowen is weeping over the fact that younger listeners now prefer the sound of degraded-quality MP3s to that of CDs. Nick Spence has more, pointing out that this is just a 20-years-on reprise of the CD vs vinyl debate; his story ends with this quote.

The happy kind of mortgage default

Many congratulations to Mark Whitehouse for writing an evenhanded and even positive article about walking away for the WSJ. He says that “a growing number of families are concluding that the new American dream home is a rental”, and talks about Shana Richey, a schoolteacher who took a $430,000 no-money-down mortgage in 2004 on which she was making payments of $3,700 a month.

“Larry Bergman”, Overstock’s sock-puppet

Here’s the friend list of “Larry Bergman”, the Overstock-financed sock-puppet who helped to generate the notorious list of friends of those who are critical of crazy Overstock CEO Patrick Byrne. Gary Weiss has the details of exactly how that list was generated; although “Bergman” never asked me to be his friend, he friended a few friends of mine, and that’s all he needed to see my own friends list.

Don’t ask Taibbi to be Krugman

Andrew Leonard takes the Tim Fernholz approach to Matt Taibbi:

The co-optation of regulatory reform by Wall Street is an important story, and one that needs to be pressed at every point. It would be nice though, if the left could pursue that story without flaunting the same cavalier attitude toward the complexity of the economic challenges faced by the current administration that we are already so familiar with from the right.