Felix Salmon

Counterparties

The SEC: Still toothless — Bond Girl

You want to move your money. But where to? USAA Bank would be a good choice — BankSimple

Gorton’s triple-A error

Beware of academics wielding exclamation marks!! Gary Gorton is a very highly respected professor in the fields of finance and economics, but that doesn’t stop him throwing double-shrieks into his official paper for the US Financial Crisis Inquiry Commission. Here they are, in situ:

The connection between airport security and credit cards

While I was waiting in an interminable security line at America’s friendliest airport today, a woman’s voice came over the intercom and scolded us that it was basically our fault that the screening was taking so long, and proceeded in a mildly unintelligible voice (the intercom’s fault, not her own) to go into great detail about exactly what had to be done with both small and large containers of liquids, gels, aerosols, and whatnot. People who didn’t fully understand the liquids-and-gels policy, she said, were causing unnecessary delays for everybody else.

Did Charlie Gasparino get Teri Buhl fired?

It’s well known that Charlie Gasparino likes getting into mini-feuds with reporters who write about him, myself included. It’s part of what makes him Charlie, and he’s welcome to call me a twerpy nutjob as much as he likes. But he and former Trader Monthly publisher Randall Lane now seem to have gone far beyond name-calling on blogs: it looks as though they have gone so far as to get a full-time reporter fired from her job, in retaliation for her writing about them.

Counterparties

Sad I can’t make this — BLDG

A very smart post by Avent: residents of dense neighborhoods fight development just as much as suburbanites — The Bellows

The blameless Spotted Owl

There’s a nice empirical post-script to the debate over the economic effects of classifying the Spotted Owl as an endangered species. Freakonomics cites a study putting the effect at $46 billion, but others, including John Berry, who wrote a story on the subject for the Washington Post, think it’s much closer to zero.

Was BofA pulling Lehman’s balance-sheet tricks?

John Hempton is the kind of guy who compares the numbers for quarter-by-quarter average assets in Bank of America’s annual reports with the numbers for total quarter-end assets in its quarterly reports. And guess what — if you look at the year 2006, BofA’s total assets were always substantially lower at the end of the quarter than they were over the course of the quarter as a whole.

Greenspan’s error

Sam Jones has the clearest, shortest rebuttal of Alan Greenspan’s 66-page Brookings paper that I’ve yet seen. And most impressively, Sam wrote it more than a year ago. While Greenspan is becoming increasingly contrite about his failures of regulatory oversight, he still continues to say that his monetary policy was blameless in the crisis, since during his tenure short-term rates, which the Fed controls, ceased to have much if any effect on mortgage rates, which were the key driver of the global housing bubble.

Is there an alternative to exchange-traded CDS?

I just had an interesting conversation with a senior market participant about the optimal way to structure and regulate the CDS market, compared to the proposal which has now been put forward by Chris Dodd. Essentially, there are two options here: you can either consolidate all the different functions (trading, matching, confirmation, clearing, information warehousing) onto a handful of big global exchanges — or you can disaggregate those functions and allow competition in each of them separately.