It looks like Neel Kashkari did manage to get that financial-services job by year-end after all: he’s moving to Newport Beach and joining Pimco as a managing director in charge of “new investment initiatives” (which seems to mean, at least in the first instance, equities). You can be sure he’ll be earning substantially more there than he would have been making had he simply stayed in “Information Technology Security Investment Banking”, whatever that might be, at Goldman Sachs.
If you’re wondering how well a country can function in the absence of a working financial system, it might be worth taking a look at Iceland, where GDP shrank 5.7% in the third quarter, with no expectation of a bounceback until 2011. And for all that Reuters’s PR guru Jolie Hunt and others might love to go there on holiday, I don’t think the tourism market is going to be particularly big so long as there’s only 4.5 hours of sunlight per day. Meanwhile, Iceland’s enormous geothermal value seems to be accruing mainly to Alcoa rather than to the country’s citizens. The long night looks as though it’s going to last well past the March equinox: sunrise seems further away than ever.
Ken Vogel’s very good article on the rip-off gold merchants sliming their way around the broadcast punditosphere never attempts to guesstimate the total amount of money that’s changing hands here. But it’s clear that the gold bubble is bringing out some most unsavory profiteers, who are signing up right-wing talk show hosts as spokesmen and selling not bullion but coins, which they can mark up to basically whatever they like.
So, all’s well that ends well, right? The government’s making an $18 billion profit on its TARP bailout, or at least that part of it which went to the banks. (Never mind the $30 billion in losses on the money that went to AIG.) Kuwait has made $1.1 billion on its Citigroup investment — a gift horse the Arab state decided not to look in the mouth, selling out at a profit now rather than trying to hold on for further gains. And Singapore cashed in on Citi as far back as September.
The Economist has a great report on the market in Warhols, which turns out to have been written by Sarah Thornton. (Incidentally, if the Economist is going to encourage its writers to give radio interviews about their articles, isn’t it about time they had the occasional byline?)
Renee Richardson Gosline has done some research which, if it turns out to be true, could well show that the cost to established businesses of counterfeit luxury goods is actually negative:
A friend of mine took out a 5/1 ARM in early 2005, which is about to reset. Lots of other 3/1 and 5/1 ARMs are resetting over the next couple of years, which is one reason it’s important to keep interest rates low. The standard reset rate for a prime borrower is 1-year Libor + 225bp; with Libor at 1%, that works out at an extremely affordable 3.25% mortgage rate.