Felix Salmon

Retiree income datapoint of the day

The group of people hit hardest by interest rates are those used to living on interest payments. “The elderly and others on fixed incomes have been especially hard hit,” reports Stephanie Strom. But just how hard have they been hit?

Teflon Buffett

Warren Buffett is a lovable, avuncular chap, not one of those axe-wielding CEOs who are feared by employees and idolized by the kind of red-claw capitalists who think that firing lots of people is a major leadership skill. Yet somehow he seems to have fired 21,000 people — 8.6% of his workforce — over the past year. And the cuts are being felt hardest by Berkshire’s poorest employees: some 3,000 textile workers have lost their jobs at Fruit of the Loom in El Salvador.


Treasury provides an unlimited guarantee for Frannie, formalizing what’s existed de facto for decades — Reuters

Why Goldman could go short mortgages

Blake Hounshell asks (of me specifically, no less) why “other banks didn’t follow Goldman’s lead when in December 2006 the firm turned bearish on the mortgage sector”.

Is there a Goldman CDO scandal?

The big story on this slow news day is the NYT’s 3000-word story on Goldman and synthetic CDOs, which now has a formal response from Goldman itself.


Mean-reversion vs momentum strategies: The former is safer, the latter can make you much more money — Kid Dynamite

Euphemisms of the day, Dubai edition

Maria Abi-Habib reports:

Gulf News, a newspaper part-owned by a senior government minister in the United Arab Emirates, has told its journalists to avoid using the words “bailout” and “default” when writing about Dubai’s debt crisis…

Did Oppenheimer’s Core Plus funds rise or fall in 2008?

Mish has found something very odd indeed from Oppenheimer Funds. Its Fixed Income Core Plus strategy was marketed to the Illinois Bright Start college savings plan, with disastrous results: parents thought they were making a conservative investment for imminent college-tuition needs, bechmarked to the Barclays aggregate index, which rose more than 5% in 2008. Instead, they wound up in a crazy leveraged vehicle with total losses of 38% in 2008 and more in 2009.

How big of a problem is cybertheft from banks?

The WSJ’s front-page story yesterday was clear and unhedged:

The Federal Bureau of Investigation is probing a computer-security breach targeting Citigroup Inc. that resulted in a theft of tens of millions of dollars by computer hackers who appear linked to a Russian cyber gang, according to government officials.