Felix Salmon

No time to worry about CalPERS

April 12, 2010

Well done to CalPERS for responding forcefully to a rather silly Stanford policy brief which gets very alarmist about California’s pension liabilities. There are so many enormous and immediate fiscal problems facing California right now that it seems utterly pointless to put out a paper saying that the state should inject $200 billion into its pension funds — especially when the logic of the paper is as confused as this:

Counterparties

April 12, 2010

Nina Munk on Peter Gelb. Didja know that Met chorus members make $175k + hugely generous benefits? — VF

Vikram Pandit’s $350 glass of wine

April 12, 2010

Andrew Ross picks up on this anecdote from Roger Lowenstein’s new book:

The problem of executive pay did not admit to an easy fix. Well into the crisis period, when banks such as Citigroup were operating on federal investment and when Citi’s stock was in single digits, Vikram Pandit, the CEO, was observed with a lunch guest at Le Bernardin, one of the top-rated restaurants in New York. Pandit looked discerningly at the wine list, saw nothing by the glass that appealed, and ordered a $350 bottle so that, as he explained, he could savor “a glass of wine worth drinking.” Pandit drank just one glass; his friend had none.

The silver lining to synthetic CDOs

April 11, 2010

One of the more thought-provoking bits of the Shleifer paper on financial innovation is this part of the model:

How financial innovation causes crises

April 11, 2010

Nicola Gennaioli, Andrei Shleifer, and Robert Vishny have a great new paper out entitled “Financial Innovation and Financial Fragility”.* It doesn’t break a lot of new conceptual ground, but it’s very thought-provoking, and it helps to codify in a formal way the serious problems with financial innovation. Their conclusion is spot-on, I think:

Counterparties

April 10, 2010

Pay for the FT with Foursquare points! — TBI

I tried the 3D burrito, but it gave me a headache — YouTube

“Chairman/CEO Russell Gerdin’s base salary in 2009 was $300,000. Once you add in all his stock awards, options, 2009 bonus, non-equity incentive plan, perks, gross-ups, and “All Other Compensation” his salary swelled to… $300,000.” — Footnoted

Why Greece won’t go Argentine

April 10, 2010

John Hempton of Bronte Capital sent me a pushback note in response to my post on Greece this morning:

The Magnetar Trade

April 9, 2010

Back in July, ProPublica announced it was hiring my friend Jesse Eisinger as an investigative financial journalist, and ever since then a lot of people have been very interested in what he’s been working on. Today, we find out, with the publication of a 6,600-word story on a hedge fund called Magnetar, co-written with Jake Bernstein.

Ben Baldanza defends charging for carry-ons

April 9, 2010

Blog comment of the day comes from Ben Baldanza, the CEO of Spirit Airlines, with a crystal-clear explanation of why his fees for carry-on baggage make a lot of sense. It’s really worth reading the whole thing, but here’s the gist: