Felix Salmon

Equities: The shift from active to passive

August 31, 2010

Sam Mamudi has found a new way to slice mutual-fund data, and the results are very interesting: the flows aren’t just from domestic funds to international funds, as we can see from the monthly ICI data, but also from actively-managed mutual funds to index funds.

Bad idea of the day: copyrighting cocktails

August 31, 2010

I wonder whether Chantal Martineau stopped to think about her timing, as she wrote her piece for the Atlantic on a movement pushing for the ability to copyright cocktails. Intellectual-property protection isn’t getting great press this week, as Paul Allen has turned overnight into one of the world’s most gruesome patent trolls.

Can the Fed’s helicopter drop money on Treasury?

August 31, 2010

Ricardo Caballero has an interesting idea:

The economy is barely muddling through. While some of this is unavoidable given the magnitude of the financial shock that is slowly working its way out of the system, macro-policy still has an important role to play in preventing a relapse. Unfortunately, the Federal Reserve has the resources but not the instruments, while the US Treasury has the policy instruments but not the resources. It stands to reason that what we need is a transfer from the Fed to the Treasury.

Sorkin, Dealbook, and linking out

August 31, 2010

On Friday, Dan Loeb released his second-quarter investor letter, which was immediately published by Dealbreaker. It’s a very political document, kicking off with a full page of quotations from various presidents (and, for some reason, Chinese general Liu Yazhou). It’s easy to see why Andrew Ross Sorkin uses it as the jumping-off point for his column today, headlined “Why Wall St Is Deserting Obama.” And as ever, the column is reposted at Sorkin’s Dealbook blog.


August 31, 2010

An Impressive New Feature Makes Gmail’s Inbox Smarter — GigaOm

Wherein a billionaire does enormous real-estate deals without having a clue what he’s doing — Curbed

How increased immigration would help fix the economy

August 30, 2010

Never mind the stimulus vs austerity debate: here’s something that both sides should be able to get behind. It’s a simple legislative fix which increases tax revenues without raising taxes; which increases the demand for housing; which increases the economy’s productive capacity; and which boosts wages for American workers. It’s about as Pareto-optimal as legislation gets. So let’s open the borders, and encourage much more immigration into the US!

Frannie’s juristic parasites

August 30, 2010

Everybody knows that the biggest winners from default and foreclosure are always the lawyers. But did you know that default fees on foreclosed properties alone are now being racked up at a rate of $2 billion a year? That’s the kind of money which attracts a lot of interest:

Litton, Goldman’s id

August 30, 2010

The apple, it seems, doesn’t fall far from the tree:

Litton Loan Servicing received more consumer complaints than any other loan servicer in the three years through June 2010, according to the Better Business Bureau. The 794 complaints against Goldman Sachs’ Litton led Morgan Stanley’s Saxon Mortgage at 631 complaints, American Home Mortgage at 597, Ocwen at 521 and Barclay’s HomEq at 161. The BBB gave Chase, Litton and Ocwen “F” grades due to the volume of complaints filed, their failure to respond and the seriousness of many complaints. Facing a BBB investigation in 2005 prompted by excessive complaints, the BBB voted to revoke Litton’s membership, but Litton promptly resigned. “They were arrogant,” said Dan Parsons, president of the BBB’s Houston chapter. “It was all about how much money they could make.”

Why official statistics are like corporate earnings

August 30, 2010

Mark Gimein uncovers some statistical legerdemain at the Harlem Village Academies, a pair of middle schools in New York. Let’s see how good you are at middle school math, by seeing whether you can answer this question correctly.