Felix Salmon

Why Greece shouldn’t worry about its CDS

By Felix Salmon
February 23, 2010

This isn’t the first time that George Soros has wheeled out this particular argument against credit default swaps:

The UK government and vulture funds

By Felix Salmon
February 23, 2010

The UK government has finally published — in the waning days of the Brown government — its take on vulture funds, and whether there should be legislation trying to ban their activities. It’s not clear whether the report has the backing of the Conservatives, but it is clear that a lot of good-faith hard work has gone into it, and that it’s not in any way a knee-jerk piece of populist financier-bashing, a la Maxine Waters.

The systemic risk of the repo system

By Felix Salmon
February 23, 2010

Tyler Cowen has a copy of Gary Gorton’s new paper, and likes it. The excerpt he gives us raises a serious point about fragilities in the banking system: banks fund themselves in the repo market so much that they need about $12 trillion of collateral just to keep ticking over. So if you implement a 20% haircut on repos, banks would need to raise $2 trillion, which is impossible.

Counterparties

By Felix Salmon
February 23, 2010

On Warren Buffett’s Olympic-grade ex post rationalizations — Jeff Matthews

Goldman belittles Greece’s billions

By Felix Salmon
February 22, 2010

Memo to Lucas van Praag and the rest of the Goldman Sachs communications machine: you are broadly considered to be out of touch, living large on Planet Billions while the rest of us struggle in one of the harshest economic environments of the post-war era. You might want do something about that. Characterizing €2.367 billion as being “a rather small” amount of money is not going to help.

Jed Rakoff, iconoclastic littérateur

By Felix Salmon
February 22, 2010

Are you still working your way through that 10,600-word Paul Krugman profile in the New Yorker? If you haven’t finished it yet, I strongly suggest you give up — you’re not going to learn much, beyond the names of his cats — and go read Jed Rakoff’s ruling in SEC vs Bank of America instead. It’s much more trenchant, much better written, and much more interesting.

Investment banking fee datapoint of the day

By Felix Salmon
February 22, 2010

The outcome of this suit — if it’s ever made public — is going to be very interesting. JP Morgan advised Consolidated Minerals when it received a series of takeover offers: as the adviser to the target company, it was pretty much guaranteed a fee, no matter who ended up buying the company. The question is just how much of a fee it was going to get.

The new world of credit cards: Still treacherous

By Felix Salmon
February 22, 2010

Barbara Kiviat asks whether credit card companies “might be getting their groove back”, and cites this chart:

Counterparties

By Felix Salmon
February 22, 2010

Wajahat Ali vs Wells Fargo: An astonishing loan-mod tale — McSweeney’s