Comments on: Counterparties http://blogs.reuters.com/felix-salmon/2011/03/15/counterparties-320/ A slice of lime in the soda Sun, 26 Oct 2014 19:05:02 +0000 hourly 1 http://wordpress.org/?v=4.2.5 By: dWj http://blogs.reuters.com/felix-salmon/2011/03/15/counterparties-320/comment-page-1/#comment-24827 Tue, 15 Mar 2011 15:18:21 +0000 http://blogs.reuters.com/felix-salmon/?p=7611#comment-24827 I would, though, like to push back against Surowiecki’s explanation why “owners and players don’t benefit equally when football becomes more profitable.” In saying “the values of the franchises increase”, he’s presumably capitalizing anticipated increases in profit in the future that accrue to the owners, while ignoring future increases in profit that will accrue to future players.

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By: dWj http://blogs.reuters.com/felix-salmon/2011/03/15/counterparties-320/comment-page-1/#comment-24826 Tue, 15 Mar 2011 15:11:54 +0000 http://blogs.reuters.com/felix-salmon/?p=7611#comment-24826 If there is a good reason for salary caps, I think a reasonable solution would be to say that the salary cap in each season will be 15% (or thereabouts) higher than the average team payroll the previous season; salaries then keep rising until several teams no longer find the cap binding, but they continue to serve their stated purpose of keeping spending less variable between teams. Of course, this would also thwart teams’ efforts to collude to keep salaries overall down, which wouldn’t go over well with them.

A good free market will, except possibly during a strong recovery, always have a firm or two on the brink of bankruptcy, and it would be worth it, if the NFL is going to a more free-market model, for them to have a plan as to what to do if a team does go bankrupt. I’m not sure the NHL has provided a great model for that.

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By: TFF http://blogs.reuters.com/felix-salmon/2011/03/15/counterparties-320/comment-page-1/#comment-24820 Tue, 15 Mar 2011 11:19:37 +0000 http://blogs.reuters.com/felix-salmon/?p=7611#comment-24820 AHP is doing an excellent job of “putting their money where their mouth is”. If they can make this model profitable, it may also cause other institutions to rethink their practices (or other small groups to imitate them).

One of the main concerns of the big banks appears to be the “moral hazard” of allowing some homeowners writedowns. They fear that *all* underwater homeowners will then want them (bankrupting the banks). Their present policy is designed to delay recognition of the losses until (they hope) something changes.

AHP doesn’t face that obstacle.

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By: johnhhaskell http://blogs.reuters.com/felix-salmon/2011/03/15/counterparties-320/comment-page-1/#comment-24817 Tue, 15 Mar 2011 08:16:36 +0000 http://blogs.reuters.com/felix-salmon/?p=7611#comment-24817 Breaking news: Angelo Mozilo settles with SEC for $67.5 million. Next up: midterm election results

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