Felix Salmon

The weak-small-bank meme

I’m not convinced about a the “too puny to succeed” meme, as evinced today by Binya Appelbaum and David Cho:

Financial innovation of the day: smaller fonts

Josh Reich explains how overdrafts work, in the real world:

It is pretty easy for a bank to clearly communicate your available current balance. But look at the language that banks use to describe available balance, with additional complexity from pending bills that have yet to be posted, checks that have been authorized but not cleared and temporary holds placed on the account. These are not difficult concepts to understand if you take the time, but banks go out of their way to make it as hard as possible to really understand what is going on with your own money. They have no incentive to help you understand, as a confused customer is a profitable customer. We’ve joked that one of the greatest innovations in banking is ever-decreasing font sizes.

Greek bailout chart of the day

Do you find the latest news from Greece a mite confusing? After saying that Greece “cannot sustain the deficit reduction that these hard measures aim to achieve” if its borrowing costs remain in the 6.3% range (which doesn’t seem so high to me), Greece’s prime minister went on to say that he had not asked for any money from the IMF or anybody else.


Please scientists: give up your faith in “statistical significance” (which you get wrong) and go back to replication — Science News

Climate Desk Bleg 2

Thanks partly to SXSW and partly to my own atrophied reporting muscles, my climate desk piece is going very slowly. And so I’m going to try another bleg here.

Repo 105: “Like, whatever”

Max Abelson has talked to three former Lehman executives about the Valukas report, and you can see why they requested anonymity. Here are some of the gems from Senior Executive #2:

Advertising on the iPad

There was another panel today on the iPad and the future of magazines, this one featuring my friends Rachel Sklar and Jacob Lewis. Jacob was pretty downbeat about the ability of the iPad to rescue the economics of the magazine industry, for two reasons; one, I think, is much better than the other. The good reason is that Apple jealously guards the demographic information of the people who download any given app from the iTunes music store, and publishers are hobbled if they don’t have a lot of detail on the demographics of their readers.

When mortgage companies give up money

The ultimatum game has shown repeatedly that people aren’t profit maximizers if they think that the profit-maximizing outcome is fundamentally unfair. And it turns out that the same is true of mortgage companies. Here’s Dean Jens, telling the story of a short sale of a house with two liens:

The economics of aggregation

How geektastic is Mark Thoma’s economics of aggregation post? Here’s the question he asks: