Felix Salmon


Bill Clinton has 14 very good ideas about how to increase employment — Newsweek

Beware Silicon Valley financiers, Skype edition

Tensions between owners and managers are nothing new; you might remember, for instance, the way in which Sequoia Capital forced Zappos to sell itself to Amazon over its founders’ wishes. But at least when the sale took place the executives got their full share of the proceeds — in contrast to what seems to be going on at Skype.

Parsing banks’ exposure to Greece

The Guardian has UBS data on the exposure that European banks have to Greek sovereign debt; the grand total, of €93 billion, seems low to me, especially when you back out the €46 billion owned by Greek banks. Add up all the French banks combined and you get to €9.3 billion; Germany’s even lower, at €7.9 billion. All of these sums are entirely manageable and imply that the impact of a Greek default on European bank solvency would be de minimis.


A Map and Simple Heuristic to Detect Fragility, Antifragility, and Model Error — Taleb/SSRN

Why a Greek default won’t ever be priced in

Back on May 26, I was skeptical that Greek bonds were pricing in a massive default, despite the fact that the likes of Martin Feldstein were saying that they were. But even if they weren’t back then, we’re getting closer now. The numbers, courtesy of Peter Rudegair: Greek CDS spreads were 1,400bp on May 26; now they’re more like 1,900bp. Greek 10-year bonds were yielding 16.4% back then; they closed today at 18.3%, with prices at about 50 cents on the dollar. European stocks have lost 5% of their collective value since May 26, and the Thomson Reuters default-probability calculation is now over 90% for Greece.

Yankee Stadium’s conduit-bond boondoggle

Is there something fishy about the bonds used to finance the parking lots at Yankee Stadium? Of course there is. And you don’t need to look far before you see two big reasons why. The first is that the bonds were issued by the Empire State Development Corporation. That’s Empire State as in New York State, one of the most corrupt and dysfunctional states in the union. The second is that these are conduit bonds — an asset class which, as Nathaniel Popper explains, is only for the very brave:

Philanthropy can’t be outsourced to the profit motive

Give him points for chutzpah, at least. Matthew Bishop has responded to my post about profits and philanthropy with an astonishing assertion: that his ideas, and those of Daniel Altman, are so fresh and new that I’m scorning them out of sheer unfamiliarity. I’m a “traditionalist,” says Matthew, a “John Bull turning up his nose at ‘foreign muck.’” It seems I’m stuck 20 years or so in the past: since then, says, Matthew, there’s been a “growing realisation that business does have the capacity to create as well as destroy social value.”

Groupon’s legal risks and hidden gift to merchants

Benjamin Edelman and Paul Kominers have a fantastic post up about the various legal pitfalls facing Groupon and other coupon sites: there are more of them than you might think. In many states, for instance, it’s illegal to offer discounts on alcohol, yet Groupon merchants do so anyway. In others, coupons need to have a 5-year expiration, rather than the much shorter ones found on most Groupons; it’s not enough just to offer the consumer’s money back for that long. Elsewhere, people redeeming coupons for less than the face value are required to get the difference back in cash. And it’s also quite common for merchants to need to hand over to the state any money they got from expired coupons.


Laser-made bike symbol could save lives — SMH

Demographics and destiny, US immigration edition — Alphaville

Ernest Hemingway kicks a can — Sutpen

The Economist gets suckered by Patrick Byrne — Weiss