Felix Salmon

Vindictive servicer of the day: ING Direct

By Felix Salmon
December 29, 2010

I’m a longstanding fan of American Homeowner Preservation, which has found a clever way of keeping underwater homeowners in their homes while minimizing the loss to their lenders. Even the red-in-tooth-and-claw capitalists at Goldman Sachs can understand that. But not, it seems, the idiots at ING Direct:

A guide to the market oligopoly system

By Felix Salmon
December 28, 2010

Oligopoly_lo.jpg

A couple of months ago, I bought this drawing from New York artist William Powhida. It’s called “A Guide to the Market Oligopoly System”, and it’s lots of fun, as well as being very astute.

Counterparties

By Felix Salmon
December 28, 2010

Wherein Ken Griffin praises an executive for saying that the story of Amaranth’s portfolio platform integration was one she could tell her grandchildren — ZH

Lessons from Japan’s fiscal disaster

By Felix Salmon
December 27, 2010

When it comes to overindebted countries which can’t stop spending, it’s pretty hard to compete with Japan. The fact that everybody picks up on when reporting on the 2011 budget is that debt issuance is going to exceed tax revenues for the second year running — or, to put it another way, that more than half the budget is being paid for by borrowing rather than taxes. For me, however, the scarier fact is that more than half of government tax revenue is going to go straight back out the door in debt-service payments.

The longevity trend bond arrives

By Felix Salmon
December 27, 2010

Swiss Re reinsures a lot of life insurance. As a result, it could lose billions of dollars if a lot of insured people die young, due to pandemics, terrorism, or the like. To hedge that risk, it has sold about $1.8 billion in mortality bonds to date. Such bonds earn a healthy yield, so long as there’s no big rise in mortality. If there is, then the bondholders lose some or all of their principal, and it’s used instead to make those unexpected life-insurance payouts.

The Gordian nightmare of public pensions

By Felix Salmon
December 27, 2010

Maybe it’s because I’m European, but I simply cannot get my head around a developed nation where people with lifelong service in the police or the fire brigade can find themselves with no pension at all. Zero. But if you’re unlucky enough to have served in Prichard, Alabama, that’s the situation you’ve found yourself in for the past 14 months

Union contract of the day, NCUA edition

By Felix Salmon
December 25, 2010

Robin Sidel reports on the NCUA’s new budget:

The 2011 budget for the National Credit Union Administration, which insures about 7,400 credit unions, will rise 12% from the prior year, fueled partly by contractual pay raises for unionized employees…

Accountants in the firing line

By Felix Salmon
December 23, 2010

As Caleb Newquist notes, most financial reporters cover the accountancy industry “once in a lunar eclipse on the winter solstice.” So it’s fantastic to see Bloomberg’s Jonathan Weil coming out with two incisive, hard-hitting columns in succession on the subject.

Using Twitter to predict stock moves

By Felix Salmon
December 23, 2010

This paper, which has now become a fully-fledged hedge fund, is certainly good at hitting buttons: not only does it include Twitter and stocks, but it even finds room to include an important role for Google n-grams!