Felix Salmon

What was special about the Dead Presidents?

The Dead Presidents CDOs now reportedly being investigated by the Justice Department were not your garden-variety synthetics:

Counterparties

John Powers is a genius. Watch the 6 min intro to his film here, or live — Star Wars Modern

Gold and the worry trade

Is it a coincidence that the price of gold hit an all-time high just as David Cameron was becoming the prime minister of Britain? Yes. But it’s also indicative of the enormous amount of uncertainty that continues to pervade the market. If you’re just looking at the stock market, you’re not looking at the most sensitive barometer of fears about the global economy in general and the eurozone in particular. As Paul Krugman notes, the euro/dollar exchange rate is probably a better place to look, and that’s now back down below 1.27, after trading at 1.50 as recently as December. For what it’s worth, here’s the price of gold in euros:

Real income datapoint of the day

Manhattan incomes rose by 35.5%, in real terms, between 2000 and 2008. Manhattan, Kansas, that is. Meanwhile, in much more educated and vibrant cities like Raleigh and Austin, real incomes fell substantially. What’s going on here? Mike Mandel looks at the numbers:

Europe: It’s more than just government debt

02marsh-image-custom1.jpgRonan Lyons is unimpressed by the now-viral NYT graphic showing the web of debt within Europe. It’s particularly unfair to his native Ireland, he says:

Counterparties

The winner’s curse implies that Labour and the Lib Dems should allow a Tory minority government making huge spending cuts — Guardian

Nassim Taleb didn’t cause the crash

Of all the silly theories about the cause of Thursday’s stock-market plunge, I’m not entirely sure why the WSJ has decided to give particular credence to the idea that it can all be traced back to a single $7.5 million trade for 50,000 options contracts. Lots of options trades of that size take place every day, and just because this one happened just before the market fell doesn’t mean it was the cause of the crash.

Why Greece might not default any time soon

Anna Gelpern has the smartest take on why Greece won’t default, which kicks off with this powerful truth:

Waiting for details on the trillion-dollar rescue

It’s not all that easy to tell, but it looks very much as though most of today’s market rally is a function of the ECB deciding that it can start buying bonds in the secondary market after all. The trillion-dollar announcement from the EU looks big and grand, but ultimately is so vague that few market participants would place much stock in it.