Felix Salmon

The positive mortgage settlement

February 9, 2012

The long-awaited mortgage settlement is here! And it looks like a good one. The biggest worry was that the attorneys general would give away the shop in return for big headlines. While in fact they seem to have been quite successful at limiting the immunity that the five banks (Bank of America, JPMorgan Chase, Wells Fargo, Citigroup and Ally Financial) are going to receive:

Weird art-valuation justifications of the day, Sarah Thornton edition

February 8, 2012

Sarah Thornton has an interesting theory on why art prices keep on spiraling upwards:

Charts of the day, wine-heat edition

February 8, 2012

Last year, I blogged a paper about the way in which wineries lie about the alcohol content of their wines. Now, the same authors have a new paper out, trying to get to the bottom of exactly why wine is getting hotter.

Mark Zuckerberg and the case for a wealth tax

February 8, 2012

The Economist has a cute chart today, showing the net worth of the world’s richest men (and one woman), divided by their age. Warren Buffett has, on average, built just over $600 million of net worth per year of his life, putting him just behind Bernard Arnault and well behind Bill Gates and Carlos Slim, who right now constitute the billion-dollar-a-year club. (I’ll save you the math: that’s $2.7 million per day.)

The ECB starts getting helpful with Greece

February 7, 2012

Stephen Fidler reports that the ECB is kindasorta going to tender its bonds into the Greek debt exchange, thereby helping the country achieve some €11 billion in extra savings.

Mortgage workouts of the day, short-sale edition

February 7, 2012

Prashant Gopal has an intriguing story today on the way in which banks are not only doing more short sales than they used to, but are even throwing in cash sweeteners to speed things along. Why would they be doing such a thing? The banks aren’t saying, but theories abound:

The SEC gets closer to regulating money-market funds

February 7, 2012

Banks need to be regulated. Depositors can’t be expected to do due diligence on their financials, so you need deposit insurance. And in turn, the government — which provides the deposit insurance — needs to make sure that the banks have certain minimum levels of capital. Otherwise, the insurance fund will go bust in no time.

Art market datapoints of the day

February 7, 2012

Many thanks to Zac Bissonnette for fisking the latest Bloomberg gushery on art funds for me, so I don’t have to. This fund isn’t going to produce disappointing returns: it’s probably not even going to get off the ground to begin with. Does Bloomberg’s Scott Reyburn have a clue what “unconfirmed commitments” are? I suspect they’re the fund-world equivalent of vaporware.

Greek talks descend into finger-pointing

February 6, 2012

This isn’t good; the Greece talks have now moved past their clear deadline and have reached the finger-pointing stage. The broad outline of the dynamics here is now very clear: you need three different parties to agree on a deal for the whole thing to have a chance of success. Private-sector bondholders need to agree to a very deep cut in the value of their bonds; the Greek government needs to agree to enormous spending cuts over and above the 1.5% of GDP that they’ve already offered; and the Troika of the EU, ECB, and IMF needs to agree to pony up extra bailout money to cover the larger-than-expected deficits that Greece is running.