Felix Salmon

Calomiris’s ridiculous take on the mortgage settlement

Cheyenne Hopkins of American Banker, who first published the terms of the proposed mortgage servicer settlement in March, has now got her hands on a ridiculous paper from Charlie Calomiris, Eric Higgins, and Joseph Mason, which says that the settlement is a bad one which could cost the economy $10 billion a year.

Counterparties

The Ceglia vs Zuckerberg lawsuit just got interesting. The emails which Facebook says are fake don’t seem that way to me — TBI

Sob story of the day, vulture-fund edition

Matt Wirz probably can’t be held responsible for the headline the WSJ put on his story today — “For Vultures, Slim Pickings.” But there’s no doubt that distressed-debt investors in Lee Enterprises are angry. And they’re angry for a very weird reason: after buying Lee’s debt at a 20% discount to face value because there was such a high likelihood of default, they’re now set to be repaid in full. That’s a 25% return in just over six months. Which certainly isn’t my idea of “slim pickings.”

Should the SEC try to boost the IPO market?

Clare Baldwin and Sarah Lynch are unambiguous: “As US regulators review rules on shares issued by private companies,” they write, “they must not make it too easy for hot Internet companies such as Facebook or Twitter to avoid the scrutiny that goes along with an initial public offering.”

The value of MarketRiders

Last year, looking at MarketRiders, I asked how much rebalancing is actually worth, in terms of basis points. I didn’t get a clear empirical answer — the responses in the comments ranged from zero to 150bp. But now Burton Malkiel, of all people, has come out against the service:

Counterparties

The Wall Street Mind: Oblivious — NYMag

Never tell someone they’re wrong on the internet without saying where & why — Culturing Science

Should bloggers get embargoed World Bank reports?

Does the World Bank have a beef with bloggers? According to Aidwatch it does:

This morning we learned that the World Bank does not consider bloggers journalists. According to Bank policy, it won’t give press accreditation to bloggers, denying them access to the media briefing center where new reports are released under embargo before they are published for the public.

Annals of C-suite dysfunction, Goldman Sachs edition

Ian McGugan has a good review of Bill Cohan’s huge new book on Goldman Sachs which includes an intriguing quote about how Bob Rubin “encouraged a culture of undisciplined risk taking” — something which goes directly against the reputation he’s spent many years cultivating. It comes from Chapter 15, which starts in the dangerous year of 1994 and which is full of juicy gossip about the very human frailties of the people running Goldman. Here’s more of it:

Adventures with stock market indexes, Nasdaq 100 edition

Dave Nadig and Paul Amery of Index Universe have the best explanation (and excoriation) of the weird Nasdaq 100 Special Rebalance this week. In a nutshell, when the Nasdaq 100 wanted to become an exchange-traded fund and make lots of money in the process, Microsoft would have accounted for more than 25% of the index if it was simply cap-weighted. So the index gurus artificially depressed Microsoft’s weighting in the index, while boosting the weighting of smaller companies.