Felix Salmon

Even the Fed can’t get credit-card language right

CardHub.com has an interesting survey of the literature surrounding penalty interest rates on credit cards. Many of the biggest card issuers rank as “poor,” on the quality and transparency of their disclosures, although Wells Fargo stands out as being particularly good.

The new wave of bank taxes

Maybe this was inevitable: the UK has moved from its clever one-off supertax on bankers’ bonuses to a much more permanent — and indeed rising — tax on bank balance sheets:

The indignities of an investment banker in China

Whenever the subject of banker pay comes up, there’s always an apologist somewhere talking about how very hard these people work — nights, weekends, everything!


Why has the SEC subpoenaed Sam Antar’s emails to journalists? And his recent divorce records? — Portfolio

Ken Feinberg’s other job

If anybody other than Ken Feinberg were in charge, this would worry me greatly:

In the end, one aim of the fund—and a prime reason BP agreed to it—will be to minimize lawsuits against the company. To do that, Mr. Feinberg will offer big lump-sum payments to workers and businesses as an enticement to stay out of court.

The interchange win

It looks like interchange-fee regulation has made it through! That’s great news, and I’m not particularly concerned about the compromises that Dick Durbin made. The Fed can now consider fraud costs as well as transaction costs in setting the level of interchange fees — that’s OK, although it’ll probably just push further down the road the day when the U.S. will finally embrace the low-fraud EMV standard.

Time’s big new paywall

Is this new? Following a link from AR today, I ran straight into a Time Magazine paywall:

Politics of subprime datapoint of the day

Atif Mian, Amir Sufi, and Francesco Trebbi report, in a new paper:

We begin with an examination of the pattern of campaign contributions toward representatives from districts with a high fraction of subprime borrowers. From 1994 to 2000, mortgage industry campaign contributions toward these representatives are relative steady. However, beginning in the 107th Congress (2001-2002), there is a sharp relative rise in mortgage industry campaign contributions toward representatives from high subprime share districts. The relative increase accelerates through 2006. The magnitude is economically significant: a one standard deviation increase in the fraction of subprime borrowers in a given district leads to an 80 percentage point increase in the growth of mortgage campaign contributions from 2002 to 2006. In contrast, we see no effect for non-mortgage financial industry campaign contributions.

What would JP Morgan do with Arminio Fraga?

Citigroup famously paid $800 million for a young and doomed hedge fund, Old Lane, just so that it could hire its founder, Vikram Pandit. No one thinks that decision was a good one, in hindsight. But JP Morgan is setting its sights rather higher, looking to buy Gávea Investimentos, along with (one presumes) its founder, Arminio Fraga.