Felix Salmon

Counterparties

ECRI says it’s a “done deal” that the US is going into a recession — WSJ Marketbeat

How much will a capital surcharge hurt?

The Clearing House has a new study complaining about the idea that the world’s biggest banks — the Too Big To Fail institutions — should have higher levels of capital than other banks. (The study is meant to be here, but the website isn’t working very well, so I’ve mirrored it here.pdf.) The main conclusion is that “if the Basel Committee’s G-SIB capital surcharge is implemented in the U.S., these banks would have to either increase the borrowing costs to their customers by 60 basis points” — an outcome so self-evidently horrific that the study doesn’t even bother to explain how harmful it would be.

¿Hard Keynesianism Chileno? ¡Claro po!

By Mark Dow

Matthew Yglesias has an interesting new post on Hard Keynesianism. It was succinct enough for me to be able to read the whole thing in between my tactical trades this morning and write a brief response.

Counterparties

Ron Suskind thinks that equity holders are secured creditors — Economics of Contempt

The “success” of workfare when jobs are scarce

This year marks the 15th anniversary of the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA), the Bill-Clinton- and Newt-Gingrich-led overhaul of cash assistance to poor families with children.* One of the major changes of that law was adding work requirements so that most cash assistance applicants (generally single mothers) couldn’t receive help without heading into the world of market-based work.** When the bill passed, and unemployment was below 5%, there was some concern about what would happen when the economy slowed and jobs weren’t as easy to come by.

Business Insider and over-aggregation

Henry Blodget has a long and detailed response to Marco Arment, which is fascinating to anybody interested in the nuts and bolts behind a modern for-profit blog.

Counterparties

The EU is proposing a $77 billion financial transaction (quasi-Tobin) tax — AP

Counterparties

Does Peter Orszag really want less democracy? Daily, he grows more Hamiltonian — TNR

Annals of management consultancy advice, overdraft-fee edition

It’s one of the oldest tricks in the retail-banking book: if you order your customers’ transactions from biggest to smallest, rather than in the order they’re received, then you’ll maximize your overdraft income. Every banker in the country knows this — to get the most overdraft fees, you have to push your customers into the overdraft zone as quickly as possible, by prioritizing their largest payments.