Opinion

Felix Salmon

Conflict disclosure of the day, Forbes edition

Felix Salmon
Dec 1, 2010 21:49 UTC

Hal Scott has an op-ed in Forbes, taking the Obama administration to task for supporting the Argentine government in its court fight against holdout creditors. As the prospect of sovereign default spreads from emerging markets to the euro zone, Scott wants the US to do everything it can to encourage other governments to never default. “Default,” he writes, “should only be a last, disgraceful resort.”

What I’m most interested in here is the way that Scott is identified:

Hal S. Scott, a professor of international finance at Harvard Law School, has filed an amicus brief in the Argentine litigation.

This is true, but it needs to be parsed very carefully to be properly understood. In reality, Scott is a paid partisan in the Argentine-debt wars, and has been for years. In September 2006, he released a paper entitled “Sovereign Debt Default: Cry for the United States, Not Argentina”, which can be found hosted on the website of ATFA, the vulture-fund-backed pressure group which is the lobbying arm for Argentina’s holdout creditors. (ATFA also emailed me to make sure I’d seen Scott’s piece in Forbes.)

Scott’s 2006 paper was very radical: it suggested massive changes to the Foreign Sovereign Immunities Act which would be tantamount to repealing the entire thing. He said that “the US should endeavor to give creditors the same rights against sovereign borrowers that they have against private borrowers” and that if foreign central banks have assets in the US or Switzerland, those assets should be “available to be attached in satisfaction of debts owed by the sovereign” — as should sovereign payments to the IMF. Creditors should also, he said, be able to seize state-owned companies if those companies were owned by a state in default.

This is very extreme stuff, and violates every norm in international diplomacy: it’s never going to happen. Scott’s paper was a salvo in the court battle over Argentina’s debt, and I have always assumed that it was paid for—as was his amicus brief—by Argentina’s creditors. (Scott was writing briefs siding with them as long ago as 2004.) But as Charles Ferguson showed so well in his movie Inside Job, academics are incredibly bad at disclosing even when they’ve been paid by vested interests, let alone how much they’ve been paid.

Scott, then, is hardly a disinterested law professor here, as a naive reading of his Forbes bio might suggest. Is it too much to ask that he disclose that he’s been paid by Argentina’s creditors, even if he doesn’t have to give a dollar amount?

COMMENT

DanHess, pity historians whining about “imperialism” were not as forgiving.

Posted by Danny_Black | Report as abusive

The new Gawker Media

Felix Salmon
Dec 1, 2010 17:07 UTC

Gawker Media’s big company-wide redesign, a year in the making, will finally come out of beta on January 3. It will the biggest event in Gawker Media history, for all three arms of the company—editorial, sales, and technology. It’s a concerted attempt for Gawker Media to stop being a blog network and start being something much more ambitious. And while that will be most immediately visible in the way that the blogs look, a massive change is taking place on the sales side, too: Chris Batty, Gawker Media’s semi-legendary head of sales, is leaving the company.

Gawker Media has had more than its fair share of staff turnover, of course. Much of it, especially at the Gawker flagship, has been detailed obsessively in the press. But above the editorial fray, the executive team has been constant all along: Nick Denton, the owner and CEO; Gaby Darbyshire, the general counsel and COO; Tom Plunkett, the CTO; and Batty, the VP of sales and marketing, working alongside the VP of sales, Gabriela Giacoman. Batty’s departure marks the first visible fracture in this team, and is a sign of just how far-reaching Denton’s changes really are.

This is a monster post, so I’ll put the rest below the fold. The stuff about Batty and Gawker Media’s revenues comes near the top, the stuff about corporate structure and valuation is near the bottom.

(more…)

COMMENT

I tried, I really did. And you know this subject better than most anyone too (well, outside of Gawker) so there’s plenty of insight offered up, for which thanks is due.

But this….

“..to a large degree he’s personally responsible for the reputation that blogs have among the population at large.”

…just made me go “WHOAAAA!!!!” You really think that, Mr Salmon?

Posted by ottorock | Report as abusive

Transferring money gets easier

Felix Salmon
Dec 1, 2010 15:05 UTC

It’s far too difficult to send money to your friends, family, or acquaintances.

At the moment, in the U.S., you basically have three options. You can try to do it physically, in person, with cash; that’s cumbersome, and often the reason you want to send them money is precisely because they’re paying cash for something and you want to pay them back. You can write them a physical check, which is even more cumbersome, and requires you to either carry your checkbook around or else start sending the payment in the mail. Or you can send them money through PayPal, which requires that they set up a PayPal account, and which often leaves them with less money than you sent, if you attached your PayPal account to your credit card.

If you live in Europe, or Canada, or just about anywhere else in the world, however, it’s easy—all they need to do is give you their account details, and you can transfer money directly from your account to theirs, for free. The lack of this basic banking functionality essentially explains why PayPal was created in the first place—by rights, if the U.S. banking system were remotely efficient or sensible, PayPal would never have existed.

Finally, however, that’s changing—and not just at forward-thinking credit unions and community banks. Citibank is now offering Popmoney, a service from CashEdge which allows Citi customers—and customers of 164 other banks—to send money easily to anyone in the U.S. with a bank account. If you send it straight to their account, the money simply appears there, just as it does in Europe. Alternatively, you can send it to their email address or mobile phone number, as you would with PayPal; in that case, they need to provide their bank account details to Popmoney before they can get the cash.

Citi has another service, too, called Inter Institution Transfers, which allows you to transfer money from your bank accounts at other banks straight into your Citi account.

These are basic wire transfers, but they don’t come with fees of $25 or more for the privilege: instead, they’re free. (Although, slightly ominously, Citi says that Popmoney pricing “is subject to change.”)

Tom Noyes had a good blog post about this back in October—I’m late to this story—saying that with this move, “Citi is now the leader in mobile payments.” But in fact he understated the extent of Popmoney: you can send money to anybody with a bank account, not just to anybody with a bank account at a Popmoney-enrolled bank.

For reasons I don’t understand, the big three retail banks are not following Citi down this path; instead, they’re laboriously trying to build their own systems to replicate Popmoney.

It’s all a bit depressing that these kind of systems have to be built at all, and aren’t just baked in to the national payments operating system, as it were. I’m sure that while Citi is offering Popmoney free to its customers, it’s still paying CashEdge some serious money for use of their technology.

The only thing I wonder about is whether Americans will ever get into the habit of happily giving out their bank account details to their friends and acquaintances. Most Americans, in my experience, think there’s a huge security risk to doing that. I think they’re probably wrong, but I’m not sure: is there a good overview, anywhere, of how safe or risky it is to give out such information?

COMMENT

The Custom House division of Western Union (based in Victoria, BC) is a great service for international money transfer. You can set up wires, electronic funds transfer (account to account) or mail checks. The fees are quite competitive with banks.

Posted by Weevie | Report as abusive

Counterparties

Felix Salmon
Dec 1, 2010 05:02 UTC

What your $3,000 bought in Haiti. The principal of a rural school dreamed of a new schoolhouse. It didn’t work out — NPR

Google beatbox — Kottke

Investing in America’s Economy: A Budget Blueprint for Economic Recovery and Fiscal Responsibility — Our Fiscal Security

Do you have a No Pre-Set Spending Limit Credit Card? Are you worried about your FICO score? Then read this — CardHub

Fiji Water Reverses Plans to Quit Fiji — NYT

Pentagon says ‘don’t ask, don’t tell’ repeal unlikely to hurt military effectiveness — ABC

Kardashian Kard pulled amid complaints of “egregious fees” — LAT

The Telegraph Media Group’s head of technology on why paywalls make no sense — Telegraph

Gavyn Davies with a smart big-picture take on Europe — FT

My favorite bit of the Taiwanese-animated Ireland-crisis story is the protestor with Father Ted’s “careful now” sign — NMA

The only fair way to admit people to Harvard is to randomize admissions — Crimson

COMMENT

I did four in the Navy with some ‘Nam including some hunker-in-the-bunker time with live ammo close at hand. There were gays in every one of my units, and we knew, and they knew we knew. They were still my friends, and it just never was an issue.

The results of this survey were absolutely unsurprising to me, and reflected my own experience. That said, if gays come out in the Marines, they will probably be dead Marines.

Posted by ARJTurgot2 | Report as abusive
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