Felix Salmon

CNBC’s Joe Kernen reports the news in the morning in a fast-paced environment where it’s difficult to be 100% accurate. If you write a book, by contrast, you have the time to make sure you get things right. So it’s good to see that now Kernen is plugging his book, he has no time for baseless factoids. Oh, who am I kidding:

Q: Give us some examples of how you see business people portrayed in the media.

A: There was a study done of TV which looked at hundreds of hours of prime time. You were four times more likely to commit a crime if you were a CEO than if you were a drug dealer or a gang leader.

Does he mean this study, by Ray Surette, author of Media, Crime, and Criminal Justice: Images, Realities and Policies? Here’s what it found:

Hm, no, he can’t mean that study, because it doesn’t show anything like what Kernen is talking about. Businessmen only accounted for 24% of crimes on TV even when you include crimes which were ordered by businessmen but carried out by professional-criminal flunkies. Meanwhile, it stands to reason that 100% of drug dealers on TV commit a crime — since by definition they’re being portrayed as illegally dealing drugs.

So maybe Kernen’s not quoting a study at all, and instead is quoting a half-remembered 1979 polemic by — wait for it — Ben Stein. Cecil Greek summarizes:

Ben Stein wondered why prime time crime consisted almost exclusively of white upper-class violence. After watching thousands of hours of TV crime shows, he reported never to have seen a major crime committed by a poor, teenage, black, Mexican, or Puerto Rican youth, even though in reality they account for a high percentage of violent crime.

Most likely, Kernen’s just quoting something somebody told him at dinner one evening, and which sounded too good to fact-check. After all, that’s the way that CNBC works. You just put a lot of shouty people on the TV saying things of dubious coherence, sit back, and enjoy the cacophony.

Kernen works in a world where ratings are more important than accuracy, and he’s just carrying that philosophy over to the book-publishing business. I doubt that his publishers, the “dedicated conservative imprint” Sentinel, mind in the slightest.

DSK and the Rikers Redemption — FT

Jon Stewart Takes Down Ben Stein — Gawker

The astonishing story of the Tokelau teenagers — GQ

Aid Watch, RIP. A sad day — Aid Watch

SecondMarket has now released LinkedIn’s price history. So why wasn’t this information in the S1? — All Things D

Kathleen Madigan blogs — without linking to — the latest FOMC minutes, and picks up on an important point: the Fed is keeping rates low largely because it sees little risk of wage inflation. If and when wages pick up, the Fed isn’t particularly worried about inflation. “But if wages pick up,” she writes, “the Fed may step in.”

Mark Thoma is unimpressed by this: “We are much too worried about a wage-price inflation cycle breaking out and causing problems,” he says. “If the Fed is too trigger happy, it could snuff out the recovery it is hoping to bring about.”

There’s a good reason to be sanguine about rising wages, and that’s rising food and energy prices. The Fed prefers to look at core inflation when setting monetary policy, on the grounds that food and energy prices are too volatile for it to be able to control, or tend to be cyclical. But they loom large for Americans when it comes to the cost of living, and wage increases are needed to pay for higher grocery bills and more-expensive tanks of gas.

John Kemp does a good job of explaining why the Fed should look at headline rather than core inflation. But at the same time, it probably should keep an eye on wages as well. After all, wages are pretty much the one thing which wasn’t hurt by the recession:

To put this in terms even a politician can understand, the average weekly paycheck is now $787.19. That’s $59.78, or 8.2%, higher than it was at this point four years ago — and the rate of increase in wages is not slowing down. If you have a job at the next election day, you’ll likely be earning between 8% and 10% more than you were when Barack Obama was elected. This country has many problems, unemployment first and foremost among them, but stagnant wages and employees being underpaid are pretty low down the list, if they’re on it at all.

I do think that productivity gains should go more to labor and less to capital, but in the first instance that should take the form of increased hiring, rather than wage increases for the already-employed. Those of us with jobs are the fortunate ones — and yes, if we’re paid more, we’ll spend more, and that in turn is likely to show up in higher prices. The Fed is probably right to be worried about wage inflation. But that just means that it should look for ways to divert that money into new hiring, rather than raising rates to choke it off altogether.

The IMF has released a one-page factsheet on the selection process for its top job, which is not very easy to understand. But the main message is reasonably clear: we have a process for choosing the managing director which we’ve followed in the past, and we’re not going to make any indication that the process will be any different this time around.

There are basically two ways that the managing director can be chosen. There’s the smoke-filled-room approach which has always been used in the past, and which will, it seems, be used this time too. Here’s how the IMF describes it:

An Executive Director may submit a nomination for the position. When more than one candidate is nominated, as has been the case in recent years, the Executive Board aims to reach a decision by consensus.

Alternatively, there could be a more qualifications-driven approach, as suggested by Mohamed El-Erian, with “an internationally balanced committee” evaluating applicants based on qualifications alone (rather than nationality), and putting forward two or three finalists for the board to vote on, based on the same criteria.

The official criteria make no mention of nationality, of course — but they don’t need to. Since we’re now officially using the same process that was in place in 2007, it’s reasonable to assume that the same kind of candidate is going to win. In other words, Christine Lagarde — who has all of DSK’s qualifications, plus the added bonus of being a woman. Maybe next time we’ll have a transparent selection process. This time it’ll be business as usual.

Why is LinkedIn doing so well on the stock exchange today? At $100 per share, by one measure it’s the most expensive stock in America. Evan Newmark has one theory: it’s because the IPO price was raised, by Morgan Stanley, by $10 per share shortly before the offering was launched. By doing that, he says, they increased the size of the pop:

Strangely, jacking the price by 30% made the offering even more enticing for lots of prospective IPO buyers.

The laws of supply and demand may say the higher the price, the less the demand. But again, that’s common sense and this is Wall Street, where a higher price equals more demand, where if the other guy wants something, then you want it even more.

Does this explain why the shares rose as high as $122 apiece this morning? No: that’s mainly just a function of the fact that it’s all in the hands of the day traders and the speculators right now. And the fact that if you buy the right hot internet stock even at the very top tick of the day, you can still make a fortune over the long term.

Take Baidu, for instance, the post-bubble record holder when it comes to first-day pops. It went public in 2005 at $27 per share, and closed that day at $122.54 — a gain of more than 350%. Today, it’s trading at $134 per share. Which might not seem like much of a gain, until you realize that there was a ten-for-one stock split last year: it’s up more than ten times from that IPO-day high point.

My feeling is that LinkedIn is going to remain hot until Facebook goes public and it’s no longer the only way for most investors to buy shares in a social network. I’ve had two conversations with LinkedIn fans over the past couple of days, and I still don’t really understand what they see in the company, or the website, beyond the fact that it’s a good way of finding and vetting possible employees or business partners. Which, admittedly, is a great niche to be in, if you can monetize it somehow.

And even at a capitalization of $10 billion, LinkedIn could still be acquired quite easily by Facebook, especially after Facebook goes public. And that is going to be a hot IPO. Maybe if they price it at a $70 billion valuation, it’ll be worth $150 billion by the time the day is out.

Just how corrupted was the culture of Rajat Gupta’s McKinsey? Suzanna Andrews reports:

McKinsey had a culture of superiority, says one longtime client, who declined to be identified, adding that consultants at the firm really seemed to think they were better than anyone else in the business world. This CEO is still shocked recalling an incident in the late 1980s, when a McKinsey team offered to provide him with a road map of what his competitors were doing. When asked how they could produce such information, he was told that McKinsey also worked with his competitors, but he could trust McKinsey to know what was confidential information and what was to be kept private. He says arrogance permeated the firm. The usual rules seemed not to apply. When this CEO listened to a wiretapped phone call from July 2008, in which Gupta relayed to Rajaratnam the details of the Goldman board’s discussions about buying a commercial bank, it sounded to him just like Gupta consulting a client.

Gupta seems to have been directly violating internal McKinsey rules for years:

As the managing director and then as senior partner of McKinsey for four more years before he retired, he ran his own consulting business on the side — a violation of McKinsey rules…

While Gupta was devoted to his philanthropy in India, his quest to amass great wealth led him to lapses in judgment, says Bala Balachandran, dean of the Great Lakes Institute of Management in Chennai, India, and a friend for almost three decades.

“He wanted a billionaire’s life and the question for him was how could he become a billionaire in a short time,” Balachandran says.

If Andrews’s CEO was shocked by what a presumably-representative McKinsey team would do in the course of normal business, one can only imagine what Rajat Gupta and Anil Kumar got up to at Mindspirit, the company set up by their wives (!) to consult for InfoGroup CEO Vin Gupta — or what services Gupta provided to Genpact which resulted in him getting 81,405 stock options at a strike price of less than a buck apiece. Genpact, whose sole client is GE, another McKinsey client, is currently trading at $16.88 per share, which means that Gupta’s options in the company are worth well over a million dollars.*

And Andrews does put forward one explanation of why Gupta might have been giving such valuable information to Raj Rajaratnam. It’s not because he was being paid for it directly, but rather because he had much bigger ambitions: he was negotiating with Rajaratnam for a 10 percent to 15 percent stake in the Galleon International Fund in exchange for attracting investors and becoming the fund’s chairman. And the wiretaps don’t end there:

Listening to the pleading tone in Gupta’s voice as he pitches himself to Rajaratnam is almost painful. “I can be helpful in Galleon International, by the way—not Galleon International, Galleon Group,” he says, apparently angling for a bigger job. “I mean you’ve given [me] a position in Galleon International, that’s good enough. I, I … ,” he breaks off.

It seems clear that Gupta had various personal crises and issues which obviously aren’t reflective of McKinsey as a whole. But at the same time, this quiet man who described himself as a servant to McKinsey’s partners was clearly never going to crack down on any of them if and when they started pushing the envelope in terms of fishing for clients by trading in confidential information. Unless and until some heads start rolling within McKinsey, it’s fair to assume that many of the most successful Gupta-era partners remain. And we’ve been given precious little reason to trust in their integrity.

Update: Gail Marold of Genpact responds in the comments, saying that Gupta provided no consulting services beyond his capacity as a director. And although Genpact did start life as a division of GE, it now gets 62% of its revenue from non-GE clients.

Greg Mankiw is right about Treasury bonds — Mankiw

Bill Keller, previewing his column: “It won’t be a media column (at least mostly not), and it won’t be an op-ed column (no unfettered opinion)” — WWD

IMF Managing Director Dominique Strauss-Kahn Resigns — IMF

Bloomberg’s Mark Deen REALLY loves Christine Lagarde — Bloomberg

Bernie Madoff’s bottle of brown mystery liquid sells for $950 — CNN

Moe Tkacik’s brilliant analysis of the DSK situation as emblematic of New Economy power and gender inequalities — Reuters

In Media Coverage, Deficit Eclipses Unemployment — National Journal

My NBC hit about DSK. Note the shout-out to Lee Buchheit at the end — NBCNY

What’s the world’s largest offshore tax haven, where foreigners’ accounts don’t need to be reported? USA! — iWatch

Sharing Information Corrupts Wisdom of Crowds — Wired

Bill Keller, who proposes that Twitter makes you stupid and says that allowing a 13-year-old onto Facebook is like passing her a pipe of crystal meth, has responded to my last post about him in an email to Steve Myers:

Felix Salmon simply doesn’t know what he’s talking about. The Times takes care of its family — including our drivers, fixers and translators. We do not discuss the details of compensation (for anyone, including staff correspondents) but we fulfill our obligation to employees, including local hires, who are hurt or killed in the line of duty, and to their families in the case of death. (Yes, this includes Mohamed Shaglouf.)”

Keller’s latest column, with its nostalgia for a time before slide rules and even the printing press, is an indication that he’s utterly incapable of leading a 21st-Century news organization into the future. But his email to Myers is an indication that he can’t even read.

Let me try again, since I obviously failed to make my point the first time around: there is a huge debate raging in various social-media channels about the way that the NYT and other news organizations treat the local fixers who work for international reporters and photographers; Myers does a great job reporting on that debate. Keller wrote a column on the subject of wartime photographers right as the debate was raging. And in that column, he didn’t mention the debate at all; didn’t address any of the issues surrounding it; and didn’t even name a single one of those drivers, fixers and translators.

The NYT is being accused of acting as though the local fixers are less important than its flown-in superstars; Keller, in this column, acted as though they simply didn’t exist.

Shaglouf is the perfect case in point. He was with two NYT photographers — Tyler Hicks and Lynsey Addario — who were abducted in Libya; they were released, while he is assumed killed. Their names appear in Keller’s column; Shaglouf’s does not.

When “the Times takes care of its family”, in Keller’s words, part of that care is seen in public columns like Keller’s, or Mike Kamber’s eulogy to Chris Hondros and Tim Hetherington — another article which mentioned zero local fixers, living or dead. A simple blog post, like Tim McGirk’s heartfelt remembrance of Raza Khan on Time.com, can mean a huge amount to a grieving family. Khan was killed while driving Addario. Here’s what Keller had to say about Khan to Myers:

Keller said that case was “sad but considerably different” from Shaglouf and the three local hires killed working for the Times. “He was a short-term hire retained to take journalists to a refugee camp and back. It was not a dangerous assignment.”

Keller put it this way: “If something like that happened to a driver you hired in New York, you would feel terrible, but would you believe you had an obligation to compensate his family? I doubt it. Even so, the Times raised a few thousand dollars for his family in Pakistan.”

Somehow I doubt that these words will provide the succor, back in Pakistan, that McGirk’s did. And note too, that just after saying that he never discusses the details of compensation for anyone, Keller goes right ahead and says the the NYT raised a few thousand dollars for Khan’s family. Rules are made to be broken, I guess.

In any case, my point was never that the NYT didn’t compensate the families of local fixers injured or killed in the line of duty. I’m sure that the NYT lives up to whatever it considers its obligation to be in such cases. But I’m equally sure that local fixers are not treated the same way as foreign reporters and photographers.

But what’s undeniable is that Keller, when writing about the human cost of war reporting in the NYT Magazine, completely ignored those fixers. That’s what I was talking about. And all I needed to do to know it was read his column.

Remember the Pimco chart which showed emerging countries trading through the G7? Turns out it was a mistake: Pimco was using the SovX Western Europe index, and not the SovX G7 index that it referenced in the relevant footnote.

The Western Europe index includes all of the PIIGS, including Greece, so it’s hardly surprising that it’s trading pretty wide right now. But in fact, if you look at Markit’s official numbers, it’s not trading quite as wide as the emerging-markets index:

How come Markit has the WE index trading tight to EM, while Pimco has the indices the other way around? The answer is pretty technical: the official Markit indices only go back to 2009, while Pimco wanted data going back to 2003. So Pimco put together their own proxy for the indices, which is simply the arithmetic average of the various components in the index. The actual Markit methodology, by contrast, is a bit more complicated: the components are weighted by present value.

Where does this leave Pimco’s thesis? The original chart showed the spread between emerging and advanced economies, and it’s fair to consider all of western Europe to be advanced economies. So the big picture there is absolutely right. But if you just look at the spread between emerging economies and the safest G7 bonds, the movement there is far less dramatic:

There’s much less risk between emerging-market nations and the safest and richest sovereigns in the world than there used to be. But there’s still a significant spread there, of well over 100bp. (It was actually 137bp yesterday.) There’s probably no such thing as a risk-free asset any more. But if you’re looking for something close, you’re still better off in the G7 than you are in the emerging markets.

The Economist has one list of William Hill odds for who’s going to succeed Dominique Strauss-Kahn as managing director of the IMF; William Hill itself has a slightly different list. I would be much obliged if a reader in the UK would please pop down to William Hill for me and place a lot of money on Christine Lagarde at 20-1, as she’s listed on the William Hill site, or even at 14-1, where the Economist has her.

Kemal Dervis is the clear favorite here. But I don’t buy it: for one thing, the single most important issue facing the managing director of the IMF right now is Greece. And the bad blood between Greece and Turkey is so deep and so ingrained that I simply can’t see how any Turk could be credibly impartial on the subject of Greece.

Second-favorite is Montek Singh Ahluwalia, who at 67 is too old for the job. He’s followed by the top EU official on the list, Axel Weber. Again, given that the head of the IMF is going to be essentially brokering a deal between Greece, on the one hand, and Germany, on the other, it doesn’t make sense to me to put a German in that job.

Also near the top of the list are Gordon Brown, who’s already been ruled out by David Cameron; John Lipsky, who’s American and therefore a non-starter for anything but a temporary position; and Peer Steinbrück, who’s also German. Interestingly, Arminio Fraga is not on the list at all, and neither is Turkish finance minister Mehmet Simsek, one of the few people to openly lobby for the position.

If it were possible to short these odds, I’d happily short all Turks, Germans, and North Americans, including Mark Carney and Agustin Carstens. But since it’s not, I’ll make do with a long bet on Lagarde. Anybody willing to help me out?

Update: William Hill have now tightened Lagarde in to 10/1. Still worth a £25 bet, though. Thank you Matt!

This is what happens when high-minded journalists like Lauren Kirchner and David Plotz talk to each other:

LK: Do you ever fear that there will be, if not more websites, more people on staff at websites who are devoting their days to linking and summarizing, more than people producing original content? What if we run out of people doing original content and there’s nothing left to link to?

DP: That’s one of the things that I think about when I’m talking to young journalists, is that so many of them are going to go into jobs that are not reporting jobs, or even editing jobs—they are aggregation jobs. That’s a worry.

Plotz does go on to say, quite rightly, that “there’s been just a massive proliferation of new journalistic content.” Kirchner’s dystopia of a world with “nothing left to link to” has never been more distant. But at the same time, Plotz seems to agree with Kirchner that if you’re linking and summarizing, you’re not producing original content, and the rise of such activity is worrying.

I don’t like repeating myself, but I’m too lazy to rewrite this, and it was buried in a much longer piece when I wrote it last September:

The biggest thing that’s missing in the journalistic establishment is people who are good at finding all that great material, and collating it, curating it, adding value to it, linking to it, presenting it to their readers. It’s a function which has historically been pushed into a blog ghetto, and which newspapers and old media generally have been pretty bad at. And of course old media doesn’t understand blogs in the first place, let alone have the confidence or the ability to incorporate such thinking into everything they do.

Think about it this way: reading is to writing as listening is to talking — and someone who talks without listening is both a boor and a bore. If you can’t read, I don’t want you in my newsroom. Because you aren’t taking part in the conversation which is all around you.

When journalists apply for jobs today, they’re usually given some kind of writing test. Certainly the people hiring them will look at their clips. Everybody cares about how good a writer you are. So long as you write well, it seems, that’s all that matters.

But if I were hiring, the first thing I’d look at would be the prospective employee’s Twitter feed. What are they linking to? What are they reading? If they’re linking to great stuff from a disparate range of sources, if they’re following smart people on Twitter, if they’re engaged in the conversation — that’s hugely valuable. More valuable, in fact, than being able to put together an artfully-constructed lede.

So I’m not worried in the slightest by the rise of aggregation jobs, and of people devoting their days to linking and summarizing. That’s a crucial journalistic skill and service, it’s what readers want, and there aren’t nearly enough people who are good at it. It’s certainly much more useful than being the 35th reporter in a press conference, writing down whatever the Important Person up front is saying, or being part of some media scrum trying to get a quote out of Dominique Strauss-Kahn’s lawyer.

What people like David Plotz ought to do, I think, is start treating great aggregators with the same respect with which they treat great journalist-writers. The value added is greater, and the skillset is rarer. But it’s going to take a while to get there.

Update: Kirchner responds, via email:

You, accidentally or not, took one small part of my Q&A with David Plotz out of context and, in doing so, misrepresented the entire gist of the conversation. The Q&A was conducted to supplement a chapter of the recently-released Grueskin/Seave report, a chapter that explores the topic of aggregation in news websites. I chose to talk to Slate editor David Plotz for a supplementary piece precisely because Slate was one of the very first pioneers of news aggregation, back when it launched in 1996-97.  Plotz stresses the value of aggregation throughout the conversation–that was, in fact, the whole point of the conversation.

Plotz actually also spoke at length about what makes a good “Slatest” editor, and the talent that Josh Vorhees brings to the task of choosing and framing stories for the list — an exchange that I ended up editing out for length, but not because I disagreed with him. Then, at the end of that conversation, I asked one of those devil’s advocate hypotheticals, “Do you ever worry that we’re spending too much time on this” kind of thing. I was not representing my own opinion (or any kind of “dystopian” worldview) when I asked that question; I was just offering it up as a question.  He said that “no,” it is not a worry, and that’s where it ended.  So I found it strange that you picked out that exchange and represented our conversation as two journalists “worrying” about aggregation.

Steven Levitt isn’t very good at introspection. “I was outraged a few weeks back when the U.S. government cracked down on internet poker,” he writes, adding that “it took me a while to figure out why.” Well, I can tell him why he was outraged: he’s a gambler (he’s especially fond of the horses), and gamblers don’t like it when the government cracks down on gambling.

But no — after all that while thinking on the question, it turns out that Levitt’s own proclivities aren’t the reason he was so outraged. Instead, it’s the Daughter Test:

It wasn’t until the U.S. government’s crackdown on internet poker last week that I came to realize that the primary determinant of where I stand with respect to government interference in activities comes down to the answer to a simple question: How would I feel if my daughter were engaged in that activity?

If the answer is that I wouldn’t want my daughter to do it, then I don’t mind the government passing a law against it. I wouldn’t want my daughter to be a cocaine addict or a prostitute, so in spite of the fact that it would probably be more economically efficient to legalize drugs and prostitution subject to heavy regulation/taxation, I don’t mind those activities being illegal…

The “daughter test” makes it clear why I find the U.S. government’s stance against internet poker so ridiculous. When I imagine my daughter growing up to be a professional poker player, my reaction is to think that would be a great outcome!

Off to the side, in a photo caption, Levitt says that he’d love it if his daughter “became a poker champion.” But it’s insane to legalize an activity on the grounds that some tiny fraction of the people doing it are very successful at it. After all, the vast majority of poker players never go pro, and the vast majority of poker pros never become champions. Overall, the number of people who lose money playing poker is much larger than the number of people who make money at it.

Meanwhile, Levitt says that he wouldn’t want his daughter “to be a cocaine addict” if such activity were legalized. He says nothing about her becoming a gambling addict — just as he says nothing about her becoming a successful legal cocaine merchant who makes lots of money selling the stuff and who doesn’t use it herself.

The point here is that it’s the job of the government to look after the weakest members of society. Ultimately, if someone becomes a drug addict or loses their life savings gambling, it’s society as a whole which has to pick up the pieces and support that person. And so the government has an incentive to circumscribe such activities and even make them illegal — even if a handful of people could engage in them successfully.

I’ve tried playing online poker myself, and didn’t enjoy it all that much: for me, the pleasures of a poker game are first and foremost social ones, rather than being mainly gambling-related. Gambling serves very little in the way of public utility, and it makes sense to regulate it. Should online poker be banned entirely? Unless and until there’s a robust regulatory infrastructure in place, yes. Casinos are very carefully regulated, and I’m not sure it’s even possible to regulate online poker sites that assiduously. But certainly up until now those sites have been operating more or less outside any regulation at all. Which is why it makes sense to me that they were shut down.

Update: Some very smart pushback in the comments, none more so than a great entry from QuantPoker. Here’s some of it:

Realistically, depending on whose numbers you like, we can look at the players that make up the poker world in these pieces:

1%-5%: People at risk for being problem or addicted gamblers — Indeed these people should not be playing poker, and we should want regulations that help them control their harmful relationship with the game (I’ll get to this later).
10-15%: Players who derive significant income from poker — Not much to say here, but note that these profits are not necessarily unduly at the expense of the 1%-5% of addicted gamblers, but mostly against like-minded strategic competitors who happen to be slightly weaker at the game than them.
80%-89%: People who responsibly enjoy poker — Whether they are slight winners or slight losers, poker is a unique strategic competition that offers many social and personal benefits to its players (for one, certainly that the average person is bad at pricing and managing risk, and poker teaches that quite well). When a rational, well-minded, non-addicted person chooses to play poker, as economists, we should infer that they’re doing so *because they are deriving benefits in excess of the costs*!

…

Even if you take the worst-case-scenario assessment of poker as potentially harmful to too high a percentage of society, the risks are still much, much lower than other things that our society and government has already approved of. Alcohol is the obvious example. The majority of people enjoy alcohol responsibly and gain social and personal benefits from it, but a minority of people do significant harm to themselves and others through it.

Many congratulations to the Port Authority of New York and New Jersey, which is about to snare the most glamorous and high-profile anchor tenant possible for its flagship 1 World Trade Center property. But the Port Authority is getting more than just the whiff of high fashion here. Charles Bagli reports that Condé Nast is going to pay “an estimated $2 billion over 25 years” for 1 million square feet in the building: that’s a lot of money.

$2 billion for 1 million square feet is $2,000 per square foot. That’s an impressive average price of $80 per square foot per year. And even from day one, Condé’s getting no bargain here:

The publisher is expected to move about 5,000 employees to Floors 20 through 41 at 1 World Trade Center sometime in 2014, when its annual rent will start at a little more than $60 per square foot, or roughly the same amount it is paying today at 4 Times Square…

Its rent is somewhat higher than those in recent deals at 7 World Trade Center or the World Financial Center, according to real estate brokers.

It seems that Condé is agreeing to 2% annual rent increases here: you need an initial rent of $62.44 per foot in order to get to $2,000 over 25 years. That’s a good 20% over what Moody’s agreed to pay to anchor 7 World Trade Center next door, back in August 2007 before the financial crisis really hit.

It looks as though Condé is getting the bottom 22 floors of the building; one assumes that the 1.6 million square feet of office space in the 48 floors above Condé will go for even more, especially now that they come with added essence of Condé. And that means, in turn, that rents from 1 World Trade should pretty easily cover its $3.3 billion in construction costs.

What about the high maintenance and security costs for the building? Back in September, Joe Nocera wrote that the Port Authority would need to “charge $130 a square foot to break even on the building” — a number that the Port Authority itself said was far too high, and which didn’t make much sense to me, either. It’s unclear how much of the security costs are going to be borne by the Port Authority rather than the NYPD. But either way, there’s no reason to make Condé pay them.

I’m looking forward, then, to the World Trade Center site becoming a vibrant and exciting neighborhood, anchored by a buzzing skyscraper at its northwest corner — just across the street from Goldman Sachs — and by a beautiful transit hub a little further east. It’s taken far too long to get there from here. But better late than never, especially if the redevelopment is now starting to pay for itself.

Greece: it’s “soft restructuring” time! And no, no one has a clue what that might mean — Reuters

Artisanal Food Fight: London’s Farmers’ Market Showdown — Atlantic

Slate distances itself from Slate.fr, doesn’t link to the article in question. (Slate editor Jacob Weisberg, by contrast, did link to it, on his Twitter.) — Slate

Why running for president as a Republican has become nearly impossible — Reuters

What’s the value of a $2,475 hotel-room upgrade? (Given that DSK can’t accept presents worth more than $100) — Slate

If Arnie’s affair had been public in 2003, California’s deficit would be half as bad today — MoJo

Adventures with blind tasting, Champagne edition — Buzzfeed

As the debate over the debt ceiling has heated up over the past month, the yield on the ten-year bond has plunged, from 3.57% on April 11 to 3.12% today. This is not a market which fears catastrophe come August 2. So it’s easy to see why Republicans simply don’t believe Tim Geithner when he tells them that if the debt ceiling isn’t raised by then, we will have some kind of macroeconomic Armageddon.

Remember, the House Republicans were told in no uncertain terms — by George W Bush, no less — that if they voted against TARP, that would have equally catastrophic consequences. Bush’s threat was more credible than Geithner’s, and the Republicans in the House were less truculent then than they are now. And even so they voted against TARP.

On the other hand, this kind of thing simply is about as far from responsible lawmaking as you can get:

Dennis Ross, a House Republican and a member of the Tea Party caucus, told Reuters: “I’m not an economist, but I have maintained a household. The federal government owns 70 per cent of Utah, for example. There are federal buildings. If you need cash, let’s start liquidating.”

He wants to sell Utah?

The sensible thing to do, of course, is to abolish the debt ceiling altogether — it serves no useful purpose. It’s “a historical relic,” writes Annie Lowrey, “the budgetary equivalent of the appendix”.

At the same time, however, Ross is absolutely right that the sun is going to rise on August 3.

But here’s what I don’t understand: we’ve already reached the debt ceiling. At this point, Geithner can point at just about anything and say that it’s an expenditure we can’t afford right now, and we’ll have to put it off until the debt ceiling is raised. Why doesn’t he just do that with all Congressional salaries? If the House Republicans had to live without pay between now and when the debt ceiling is raised, that would surely concentrate their minds a bit. And it’s got to be a better idea than the current strategy, which seems to involve Geithner all but begging the Republicans to call his bluff and wait until after August 2 to do anything.