Felix Salmon

Chart of the day, US taxes edition

Felix Salmon
Mar 16, 2011 00:39 UTC

Ask, and you’ll receive an explanation of what this chart means.


tax_burdenthinOne way to look at this chart is in horizontal slices. Right now, for instance, if you look along the bottom of the chart, you can see that the line is bluest at the right-hand end, and reddest in the middle-class zone up to roughly $100,000 a year in annual income. When the chart is blue, that means you’re paying less tax than people on your income level have done historically, and when it’s red that means you’re paying more.

Looked at this way, you can see that taxes were generally very low up until about 1930, and they were generally pretty high in the 1940s and 1950s. And then something interesting happens around 1970: different parts of the population start being taxed in very different ways. So people earning roughly $10,000 to $50,000 a year had historically very low tax rates between about 1970 and 1980, while people earning more than $1 million a year (in 2011 dollars) have been doing very well for themselves since about 1990.

Another way to look at the chart is to look at vertical slices of it. For instance, the slice for people earning $1 million per year, in 2011 dollars, is on the left. In this case, the very rich had it best during the Gilded Age of the 1920s, and were taxed most heavily in the 1940s and 1950s. During the 1980s they were taxed at a historically-normal level, and today they’re undertaxed by historical standards.

But the main takeaway from the chart, at least for me, is that taxes in general have been declining for a long time now, especially on the rich. Which is one big reason why the fiscal situation looks unsustainable: we’re just not raising enough money in taxes to be able to pay for the amount we spend each year. With entitlements on both the retirement and healthcare side of things certain to rise inexorably for the foreseeable future, the chart is going to have to get redder from here on in. It’s not a question of whether, it’s just a question of when.


If you want to generate a chart or graphic which illistrates that the lower and middle classes get the short end of the tax stick you need to use “historically relitive” rather than absolute numbers, nonlinear axis scales and the like.

The federal income tax burden has fallen BELOW ZERO for several MILLION filers. Including some filers that earn up to $40,000.

I am a strong vocal supporter of the EITC because it promotes socially desirable behavior like work rather than non-work.

While it is true that todays tax code treats the wealthy better than at any time since the 1920′s it is also true that the tax code treats the working poor better today then at any time in U.S. history.

Social security taxes are also negitive. Workers on average collect slightly more in benifits then they paid into the system.

Medicare taxation is negitive in the extreem… current retirees are collectively receiving many dollars of healthcare benifit for each dollar they paid in during their working lives.

Social Security can easialy be saved in its current form with relitively small ajustments.

The scope of services covered by medicare will be cut by at least 50%. Yet that won’t be anywhere near as bad as it sounds. Most countries spend less and get better results than we do in the U.S.

Best hopes for an tax system that continues to strongly reward work and one that rewards savings and investment even more strongly than the current system.

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A newspaper paywall done right

Felix Salmon
Mar 15, 2011 22:18 UTC

Alan Mutter has a great example of how to put up a paywall the right way. The Augusta Chronicle put a paywall in place in December — and since then traffic is up by 5%. (One proviso here: that seems to be a year-on-year comparison, and so traffic might have fallen from its levels immediately before the paywall was implemented, the numbers are unclear.)

The Chronicle’s paywall is both cheap and porous. It’s on a meter system, with readers allowed to read 25 “premium articles” per month before they’re asked to pay. Taking a leaf from the Economist’s book, the Chronicle defines premium content as anything which appears in print. Online, however, it’s very unclear what counts as a premium article, and in reality most readers will never come close to that limit.

Once you’ve reached the limit — something only the most loyal readers do — you’re asked to pay the low price of $6.95 a month for full digital access. If you’re a print subscriber, which is likely, the price is even lower — just $2.95 per month.

As a result, the number of people buying digital subscriptions is low. But there’s no reason why paywalls should be hugely remunerative right out the gate.

Executive editor Alan English understands very clearly that the value of paywall need not reside in its revenues: “The act of placing a value on our journalism may be more important than any penny we ever collect,” he told Mutter. “It’s a powerful statement from the publisher and positions us distinctly in the market.”

In other words, the idea here is that people who read the Chronicle’s website are now being told quite explicitly that they’re reading valuable journalism. That, in turn, means that they will value and respect it more than they would some free sheet.

And once the paywall is securely in place, the Chronicle can tighten it up slowly, over time, with subscription prices rising and the monthly quota falling. (As indeed it has already fallen: at launch the meter was placed at 100 premium articles per month.)

I said back in November, just before the Chronicle paywall was launched, that if I was charged with maximizing paywall revenue, I’d start at just a buck or two a month, to attract as many subscribers as possible and to get them used to the idea of paying for content online. Once the subscriber base hit a critical mass, then I’d start raising the rate, as quietly as possible. It would take a few years, but the end result would be many more people paying for their online subcription than if you started off with a rate remotely comparable to the price of the print subscription.

The Chronicle team seems to understand this; it remains to be seen whether the executives at the NYT will work it out as well. I’m not a fan of the NYT paywall, partly because its readers already value its journalism very highly and so it’s less in need of signaling mechanisms than the Chronicle is. On top of that, nytimes.com is an important part of international web-based conversations in the way that chronicle.augusta.com can never be, and so the downside to the NYT if it gets this wrong is much larger.

Now that the decision to launch an NYT paywall has been made, however, and tens of millions of dollars have been spent developing it, I do hope that they will be smart enough to roll it out slowly, with a low price and high quota for the first few months. If they do that and traffic doesn’t fall, they’ll be much better positioned over the long term than if they come out of the gate annoying a lot of readers who are currently not willing to pay for news online.


Felix, thank you for your insight. The “metered” concept is an interesting one and seems to have especially strong merit in the context of an already established paper where publishers are concerned about the public outcry to a paywall. We worked with a local newspaper who had not transitioned their content online and we were able to start them off, with a paywall at full price, right from the beginning with strong success. An effective strategy for transitioning a paper that has already made itself available online would require more thought and might do well to include a metered approach.

You touched on the concept of your “most loyal” readers. My colleague published an article on the subject that takes a different approach – I’ll include a link below and would appreciate your thoughts!

http://sabramedia.com/blog/what-online-n ewspapers-can-learn-from-social-networks

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Why market aftershocks will continue

Felix Salmon
Mar 15, 2011 17:58 UTC

Neil Hume asks whether the stock-market plunge in Japan is an “overreaction,” as markets around the world are exhibiting enormous volatility and uncertainty for obvious reasons.

My feeling is that what we’re seeing in the markets today is entirely rational, and that a 3-day move in the Nikkei of less than one annual standard deviation is actually pretty modest given the enormity of what has happened in that country since the earthquake hit early Friday morning.

The main way in which the world has changed since Friday is that tails have got a lot fatter. It’s far too early to tell what the long-term effects of the earthquake and tsunami will be on the Japanese economy, on the future of nuclear power as an alternative energy source to fossil fuels, on the size of Japan’s holdings of foreign securities, or just about anything else. But the effects will be real, and there’s a significant chance that they will be large.

In general, markets do two things in the face of uncertainty: they fall, because reliable predictability is valued more highly than the unknown; and they become more volatile, because it’s that much harder to value future income streams. And both of those effects are magnified when you’re in an economic environment of zero interest rates. That’s because the discount rate at which you value future income is very low, with the result that modest changes to a value here or a rate there can have extremely large effects in terms of present value.

That helps explain why the Nikkei plunged so dramatically in the fall of 2008, going from 12,000 to 8,000 in the space of a month. By those standards, a fall from 10,500 to 8,500, as we’ve seen in the past three sessions, is pretty much in line with what happens to Japanese stocks in the face of a major market event.

The most likely outcome here is that Japan will spend a lot of money to rebuild its economy, but not so much that the national finances will be disrupted massively. There’s still a long-term fiscal problem in Japan, but the short-term liquidity situation is solid, and a major natural disaster like this one is a no-brainer of a reason to put fiscal worries on the back burner and stimulate the economy with much-needed reconstruction spending.

That said, however, there are definitely less likely scenarios out there as well which are much more gruesome for Japan and indeed for the entire world. With the probabilities attached to those scenarios being impossible to calculate, expect to see continued volatility in global asset markets for at least as long as the news out of Japan remains in flux — and possibly for quite a while after that, as well. This earthquake literally shifted the world’s axis: there’s a good chance it’ll do so metaphorically as well. If you’re a bold macro-fund manager who can see five moves ahead and loves to play in volatile markets, this is heaven for you. The rest of us are just going to suffer from aftershocks for a while.


Most of the world economies are tottering and are very vulnerable to unforeseen and in some cases unpredictable calamities (be they due to human foibles or to natural causes). We have seen two prodigious examples of this in the last week or so.

Firstly, the Fed’s Ben Bernanke was worried about deflation, and he that that “a little bit of controlled inflation” would be a good idea. (I believe that Ben gets most of his great ideas while sitting on the toilet seat). Anyway, he printed and dumped on the world market an obscenely large amount of US dollars. While most of the effects of this action have not as yet played out, almost immediately world food prices soared. (This dollar debacle was not the sole cause of this, but it was certainly the precipitating factor.) Most of the population of the oil rich middle east and north Africa are poor and spend about 80% of their income on food. All of a sudden, due to this Bernanke foible, many could no longer buy food or eat. Some of the unintended consequences of this increase in food prices caused demonstrations, riots, and a civil war, and the ousting of governments that that were friendly (bought and paid for) to the US government. Of course, the CIA was completely surprised by this, and as a result of the CIA non-performance, the surprised Obama needed two or three days to get his act together (the situation was extremely complex).

Of course, the other great surprise was the Japanese disaster, which will have many still unknown drastic and long term effects on the US and other world economies.

The conditioned Obama administration response to these situations is “not to worry–we can handle it–we can manage the situation”. Yeah, sure they can!

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Felix Salmon
Mar 15, 2011 06:31 UTC

American Homeowner Preservation Buying Pools of Defaulted Mortgages & REO’s: An intriguing and hopeful development — Shame the Banks

Angelo Mozilo’s settlement with the SEC: $67.5 million — SEC

The SEC Saw Gupta as a Clear and Present Danger to Shareholders — CNBC

Surowiecki explains why the NFL players should win the current dispute — TNY


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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Don’t donate money to Japan

Felix Salmon
Mar 14, 2011 18:12 UTC

Individuals are doing it, banks are doing it — faced with the horrific news and pictures from Japan, everybody wants to do something, and the obvious thing to do is to donate money to some relief fund or other.

Please don’t.

We went through this after the Haiti earthquake, and all of the arguments which applied there apply to Japan as well. Earmarking funds is a really good way of hobbling relief organizations and ensuring that they have to leave large piles of money unspent in one place while facing urgent needs in other places. And as Matthew Bishop and Michael Green said last year, we are all better at responding to human suffering caused by dramatic, telegenic emergencies than to the much greater loss of life from ongoing hunger, disease and conflict. That often results in a mess of uncoordinated NGOs parachuting in to emergency areas with lots of good intentions, where a strategic official sector response would be much more effective. Meanwhile, the smaller and less visible emergencies where NGOs can do the most good are left unfunded.

In the specific case of Japan, there’s all the more reason not to donate money. Japan is a wealthy country which is responding to the disaster, among other things, by printing hundreds of billions of dollars’ worth of new money. Money is not the bottleneck here: if money is needed, Japan can raise it. On top of that, it’s still extremely unclear how or where organizations like globalgiving intend on spending the money that they’re currently raising for Japan — so far we’re just told that the money “will help survivors and victims get necessary services,” which is basically code for “we have no idea what we’re going to do with the money, but we’ll probably think of something.”

Globalgiving, it’s worth pointing out, was created to support “projects in the developing world,” where lack of money is much more of a problem than it is in Japan. I’m not at all convinced that the globalgiving model can or should be applied directly to Japan, without much if any thought about whether it’s the best way to address the issues there.

That said, it’s entirely possible that organizations like the Red Cross or Save the Children will find themselves with important and useful roles to play in Japan. It’s also certain that they have important and useful roles to play elsewhere. So do give money to them — and give generously! And give money to other NGOs, too, like Doctors Without Borders (MSF), which don’t jump on natural disasters and use them as opportunistic marketing devices. Just make sure it’s unrestricted. The official MSF position is exactly right:

The ability of MSF teams to provide rapid and targeted medical care to those most in need in more than 60 countries around the world – whether in the media spotlight or not – depends on the generous general contributions of our donors worldwide. For this reason, MSF does not issue appeals for support for specific emergencies and this is why we do not include an area to specify a donation purpose on our on-line donation form. MSF would not have been able to act so swiftly in response to the emergency in Haiti, as an example, if not for the ongoing general support from our donors. So we always ask our supporters to consider making an unrestricted contribution.

I’ve just donated $400 in unrestricted funds to MSF. Some of it might go to Japan; all of it will go to areas where it’s sorely needed. I’d urge you to do the same, rather than try to target money at whichever disaster might be in the news today.

Update: Some bright spark has set up a “Socks for Japan” drive. I’m not making this up. I trust that none of my readers are silly enough to send socks to Japan, but this is a great indication of how wasteful a lot of well-intentioned giving can be.


Scream of a stranded family

I had a brilliant college student stranded. I’ve studied on Accounting Issues. I’d like to read ca. I have a good job with the passing of ca. CA had the opportunity to read, but the money needed for reading my family has ($5000) of that money. ‘ve Spent quite a hardship in the lives of students leaving the past. Only extra-time job and private tuitions to pay back the money by himself and his family came to this. We are two brothers and two sisters. Father did not have parents. And she needs better treatment Asusha him. My younger sister is studying in the Computer Science subject’s eyes suddenly a problem has arisen. Doctor says its better to treatment. The younger brother of the bones of disease cancer Aaffected. Everyone fairly offer cooperation treatment. The doctor said it would be a long-term treatment. The younger sister of the technical college studies. I have all the family. The whole family is depending on me. I think the problem is that the earth and all the dangers of this family. Everyone needs emergency treatment. Lack of funds can not be treated. What is the earth that man has no self goodheart ? For a little money to Risky Families in this sector.

This extreme danger capacity argue to protect my family. You’ve come to the aid. If people are to people. Of course this is an extreme danger if it is true, I will help by donate me money. If you give me at least one coin in the penetrate much for me. Now that’s no way to collect the money needed urgent not signs. Disturabance in the goverment found the right way do it again. Eager to apply all of you. Sector behind me money if my family will benefit too. Let me wish all of you the money behind a sector. I can not wait to jump on this earth is related to the family….

Wretched Beings
Contact Address ;—

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Felix Salmon
Mar 14, 2011 08:07 UTC

Transcript of Warren Buffett’s Interview With the FCIC — Santangel’s Review

State Department’s P.J. Crowley stepping down — CNN

$60k fine for blogger who reported truth — Boing Boing

Japan Earthquake: before and after — ABC

A great post on the Economics of Bike Lanes — Olaf Storbeck

Knight donates nearly $1 million for a news-tailored CMS — Nieman Lab

Some great news on the Gaby Giffords front — Politico

Banks and merchants are trying to turn the debit interchange debate into a consumer issue, which it really isn’t — Fee Fighters


The debit card fee issue is interesting.

The banks want to be able to charge what they want, just as if they were working in a free-market, capitalist system. Government regulators setting fees is very similar to a heavily-regulated utility.

On the other hand, they fully expect to be treated as privileged TBTF institutions, able to uniquely tap into very low interest funds at the Fed and Treasury windows. In a crisis, they expect to have their incredibly risky behavior covered by the government so that they can survive intact, without bond-holder, share-holder or employee losses.

So we have a conundrum. They are either a regulated utility or a free-wheeling hedge fund. Being both is unacceptable from a societal standpoint.

I say we let them choose.

They can be either: TBTF status with utility-like regulation, including setting compensation limits and fees; or they can be free-wheeling with the ability to fail in a crisis.

This latter category would need to come with some required limits on either size or leverage ratios to avoid massive economic and financial system damage. So the entrepreneurial spirits within the organization could haive off separate units as it gets bigger, so that they can continue to make large profits and reap the rewards without endangering the system.

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Why the Fed needs to get its act together on payments

Felix Salmon
Mar 12, 2011 21:33 UTC

I’ve known Josh Reich, BankSimple’s CEO, for a while now, but it’s only today that I managed to sit down and have a serious conversation with CFO Shamir Karkal. He’s a very interesting guy — go check out his latest blog entry on the rise of Credits and you’ll see what I mean. Our discussion today was largely about payments, an area where BankSimple stands out starkly from the mass of banks and credit unions by being in favor of lower debit interchange fees.

The debit interchange debate is at full volume right now, as banks try to lobby Congress to weaken the part of the Dodd-Frank law which essentially forces the Fed to bring interchange fees down to a very low level. And both sides — banks vs merchants — are putting a lot of money and effort into noisily pushing their side of the story. It was only when I sat down with Shamir that I finally found someone with a considered middle-ground view. And he makes a lot of sense.

The big picture here starts with the fact that there are very good public-policy reasons for central banks to assiduously regulate payments mechanisms and ensure that they clear at par. Paper checks are very expensive to process, for instance, but if I write you a check, the amount of money that I spend and the amount of money that you receive are identical.

In much of the world, bank transfers work the same way. If you give me your bank account details, I can transfer money straight from my account to yours, and you will receive the exact amount of money that I sent. In Scandinavia, this happens in real time: I can transfer money to you now, and you can see that money appear in your bank account minutes later.

The US is far behind on this front; bank transfers are so cumbersome, time-consuming, and expensive that a huge company called PayPal has grown up to try to make money out of providing an easier way of doing things. But people have a tendency to send money via PayPal by typing in their credit-card number, and in that case the amount of money received is significantly less than the amount of money sent. In other words, PayPal does not always clear at par, and that’s both a weakness of the system and an explanation of how come it was sold for well over a billion dollars.

Right now, debit cards can’t be used for person-to-person payments. There are companies like Square popping up to try to change that, but again they take their cut, with the effect that debit does not clear at par. If you pay me $100 with Square, I’ll receive $97.50.

This is a problem, because it makes payments difficult and inefficient. We’re at a restaurant, and we don’t want to burden the waiter with two different cards. So I pick up the check and you transfer half the total bill directly from your account to mine. That should be easy, but it isn’t. And if one of use has to pay a fee for doing that kind of thing, it’s never going to happen.

The next important realization is that payment mechanisms are fragmenting, but are also subject to enormous network effects. The cash-and-checks duopoly over payments lasted a long time, but is long gone now, and there’s a huge push towards lots of other payments systems, from mobile to debit to things like Facebook Credits. And what all of them want is ubiquity and scale. There’s no point in me signing up for PayPal if you aren’t signed up too. But if everybody’s signed up, it’s great.

Once a payments system gets enormous, it then has the ability to start extracting rents. This is exactly what happened with debit cards: in the beginning, they were very cheap, as banks encouraged merchants to accept them. Once substantially all merchants did start accepting debit cards, the banks then embarked on a process of extracting rents by steadily increasing debit interchange fees. And left to their own devices, they will continue to raise those fees steadily and inexorably. This goes against the public interest, and it’s an abuse of the banks’ monopoly position.

Enter the central bank. In a sensible system, the central bank should constantly be keeping a close eye on what’s happening in the payments space, and trying to maximize the ease with which people can transfer money to one another while at the same time being able to keep an eye on money laundering.

This is not uncommon in much of the world, especially in Scandinavia. Payments systems there don’t make lots of money for the banks, but they do help the economy as a whole run much more smoothly.

In the US, however, this doesn’t happen at all, for two main reasons. Firstly, the banks are far too big, too powerful, and too important to the economy as a whole. As such, they’ve effectively captured their regulators, to the point at which the Fed considers its main job to be to safeguard the health of the financial system rather than to minimize inefficiencies in the economy as a whole.

On top of that, the US has a rigid rules-based system rather than a more flexible principles-based system. As a result, no matter how much the Fed looked into the system of debit interchange, it was effectively powerless to prevent massive fee inflation unless and until Congress gave it a mandate to do so. That mandate arrived with Dodd-Frank, but again the Fed’s pretty powerless to do anything intelligent or inventive: it has no choice but to implement the Durbin amendment exactly as it’s written. So the whole battle is being played out in front of Congress. What should be a matter for technocrats is instead being decided by politicians, and it’s rare that ever results in an improvement.

In a sensible system, we wouldn’t need the Durbin amendment at all, because the Fed would have been on top of the debit interchange situation all along, and would have pushed hard on the banks to ensure that they didn’t start extracting rents from what is at heart an extremely cheap and efficient payments utility. But because of the way the Fed’s set up, they couldn’t or didn’t do that.

What this means is that as payments go mobile, we’re going to have exactly the same problem all over again. The banks will coalesce around some kind of mobile-payments solution, they will support it until it becomes broadly adopted, and then they’ll start extracting as much money from it as they can get away with. And the Fed will look on, powerless, until someone like Durbin comes along to legislate a one-off solution which will almost certainly not be optimal.

All of which is to say, we desperately need the Fed to move to smart principles-based regulation with real teeth, at least when it comes to payments. But I fear there’s precious little chance of that.


Your comments reflect what is a common global issue with the incumbent banks and the regulators. Whether it is the recent spate between the EPC and the European Commission on SEPA end dates or creation of Faster Payments in the UK, there is one common theme. The business case for innovation within incumbents versus the new players is inherently different. Improving the overall efficiency of the financial supply chain will remain a pipe dream.

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Board compensation datapoints of the day

Felix Salmon
Mar 11, 2011 15:43 UTC

Should there be some kind of cap on director compensation? The question arises in Duff McDonald’s Fortune profile of Rajat Gupta from October:

His long career as a well-connected corporate consigliere made Gupta highly coveted as a director. Between 2006 and 2009, Gupta picked up seats on the boards of five public companies — American Airlines parent AMR, global outsourcer Genpact (of which he is also chairman), Goldman Sachs, audio equipment giant Harman International, and Procter & Gamble. He also joined the supervisory board of Russia’s Sberbank and the board of the Qatar Financial Centre. Altogether, those positions paid him more than $3.2 million in 2009.

Gupta has drawn criticism for his hefty board income. He left his position with Sberbank in June. But in 2008, he was paid $525,000 — more than he made for his Goldman board seat — to sit on the board of the bank, the largest in Russia and Eastern Europe by assets, while the next-highest-paid director earned only $110,000. The question of whether he could actually be “independent” while being paid $525,000 was a serious enough one that RiskMetrics, the corporate-governance watchdog based in Washington, D.C., advised minority shareholders to vote against his nomination in 2009. He was reelected anyway.

If a director is being paid half a million dollars a year by a company, that seems to me a pretty effective way in which the management of the company can capture the director. And earning $3.2 million in one year from non-executive board positions alone is just bonkers.

But wait a minute, Gupta has a rival in the insane-board-remuneration stakes! Step forward Cathie Black, who contrived to take home $3.3 million from IBM last year. Admittedly, that wasn’t all for one year’s work: she retired from the board and cashed in all the shares she held in the IBM Deferred Compensation and Equity Award Plan, under which her $260,000 annual director’s fee gets paid out in stock and held by the company.

I do understand that board members of big corporations are often very wealthy people, and that therefore it takes large sums of money to so much as get their attention. But that’s not always the case. Here’s Warren Buffett, in his latest annual letter:

The directors who represent you think and act like owners. They receive token compensation: no options, no restricted stock and, for that matter, virtually no cash. We do not provide them directors and officers liability insurance, a given at almost every other large public company. If they mess up with your money, they will lose their money as well. Leaving my holdings aside, directors and their families own Berkshire shares worth more than $3 billion. Our directors, therefore, monitor Berkshire’s actions and results with keen interest and an owner’s eye.

I’m particularly impressed, here, by the lack of D&O insurance — although I suspect that the directors might just buy their own insurance personally. But this, to me, is pretty much the ideal board, comprised of real owners of the company, who don’t need to be attracted with quarter-million-dollar annual retainers or Deferred Compensation and Equity Award Plans. As an individual shareholder, I’d be much more comfortable being represented by a Berkshire-style board than by the kind of people who feel the need to charge $525,000 a year for their services.


The effect is even more interesting when you consider board members who give the appearance of being independent, e.g., academics and college presidents, for whom the director’s fee is a very substantial income supplement. For example, Mary Sue Coleman, President of the University of Michigan, is one of two academics who are members of the board of Johnson & Johnson. The $200K plus that they receive is more significant to them than it is to many board members who are wealthier. The academics appear to be independent but often are the least independent because the prospect of losing an amount of money that would change one’s financial life is not something anyone wants to face.

Very useful when it comes to having a vote against being acquired (and losing that board position) or against firing a CEO (like Bill Weldon at JNJ).

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Felix Salmon
Mar 11, 2011 07:04 UTC

Fed capture watch: its report says wrongful foreclosure can only happen when the owner isn’t delinquent — HuffPo

Duff McDonald’s October profile of Rajat Gupta — Fortune

Fred Goodwin has obtained a super-injunction preventing him being identified as a banker — Telegraph


Are the TBTF banks still buying up small banks? I know there were some mega-mergers in the midst of the collapse (esp. Wachovia and Washington Mutual), but I thought that the small bank failures were being bought by private investors and other smaller banks.

Why were the TBTF banks allowed to take over their TBTF peers? Because nobody else was big enough to absorb them? I can’t see any better alternatives on those. Not in the midst of financial collapse.

“Why would you wait until your CD’s come due to make them find your accounts?”

Why would I bother checking on CDs *before* they came due? They were in the system, somewhere, just not easily accessible. The interest was correctly credited (to within a few cents — the formula I use isn’t quite exact).

Old habits die hard, I guess. Still, you would think that people would eventually question whether the benefits of banking with a giant aren’t outweighed by the risks?

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