Felix Salmon

The Chevron poll

By Felix Salmon
December 17, 2010

WaPo’s Paul Farhi has the story today of PFC Opinion Research, which is offering journalists $250 to talk on the phone for 25 minutes about their opinions of the oil and gas industry. News reporters might be supposed to keep their opinions out of their copy, but Farhi makes it very clear where he’s coming from on this front:

Rent-vs-buy calculation of the day, Nouriel Roubini edition

By Felix Salmon
December 17, 2010

Back in May, Nouriel Roubini held his book party at DBGB. He obviously likes the location, since in September he paid $5.5 million for the triplex penthouse upstairs. (EV Grieve has the photos of what is now the most expensive apartment ever sold in the East Village.)

What did hedge funds know about the Picower negotiations?

By Felix Salmon
December 17, 2010

Is there such a thing as insider trading in things which aren’t remotely securities? On Monday, the NYT had a report headlined “Speculators Are Eager to Bet on Madoff Claims”, saying that hedge funds were bidding somewhere around 30 cents on the dollar. Meanwhile, Barbara Picower was coming to the end of months-long negotiations which culminated this morning in the announcement that she would return $7.2 billion for the benefit of those defrauded by Madoff.

Counterparties

By Felix Salmon
December 17, 2010

The Books Ngram Viewer is amazing, see eg this or thisGoogle Labs

Tyler Cowen’s advice for planning a wedding — MR

“From the standpoint of publicly funded art, the censors have won.” — NYRBlog

The cost of bailing out Frannie

By Felix Salmon
December 16, 2010

Let’s say I buy a $3,000 pair of handmade shoes but don’t have that kind of cash to hand, so I put them on my credit card. I then rack up another $2,000 in penalties and interest before I’ve paid them off. Then the total cost associated with my poor investment in footwear is $5,000. The credit card company bailed me out but charged through a lot of money for doing so, and the money is absolutely part of the total sum I end up paying for those shoes.

The Fed’s bold move on debit interchange

By Felix Salmon
December 16, 2010

The Fed’s swipe-fee proposals are out, and the market action in Visa and Mastercard — both of them are down more than 10 percent today — tells you everything you need to know. Basically, big card issuers won’t be able to charge more than 12 cents per transaction for debit-card purchases, and under one alternative their fees might be kept as low as 7 cents per transaction. That’s a massive reduction from the levels we’re seeing right now, which can range as high as 2 percent.

Rating structured bonds is impossible

By Felix Salmon
December 16, 2010

Re-remics are a regulatory arbitrage with negative economic value — you take a bunch of bonds , and then spend lots of money on bankers and lawyers and ratings agencies in order to transform them into other bonds. The financial-services industry gets lots of lovely fee income, which ultimately comes out of the pockets of the beneficial owners of those bonds. And no one makes out more handsomely than the ratings agencies, without whom none of this would be possible: it’s their precious triple-A ratings which make the arbitrage attractive in the first place.

Veblen good of the day, Julie Mehretu edition

By Felix Salmon
December 16, 2010

Do finance types pay millions of dollars for art because of how good it is — or do they pay millions of dollars for art precisely because it costs millions of dollars? If there was any doubt before, you only need to listen to Lloyd Blankfein, talking about the art in his lobby: