Felix Salmon

Counterparties: Jumbo shrimp

March 21, 2013

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#CypriOut looms

March 21, 2013

When it comes to financial negotiation, lenders nearly always have more power than borrowers — and the smaller the borrower, the more that’s true. Which is why Cyprus’s rejection of the EU bailout proposal was always dangerous. If they couldn’t come up with a Plan B, then there was always a risk of the worst-case scenario as spelled out by Cypriot president Nicos Anastasiades: the ECB would stop propping up Cyprus’s banks, which would immediately fail, causing 8,000 families to lose their income, 60% losses for bank depositors, bankruptcy for thousands of small Cypriot businesses, and probably (although Anastasiades didn’t spell this out explicitly) exit from the euro.

Counterparties: Why the young are falling behind

March 20, 2013

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Synthetics rise from the dead

March 20, 2013

Remember synthetic CDOs, the monsters of the financial crisis? Well, according to Mary Childs, they’re “making a comeback”:

Counterparties: No hope for change

March 19, 2013

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Cyprus’s bad haircut day

March 19, 2013

Cyprus has said όχι to the idea of taxing deposits: good for them. And the parliament did so decisively, as well: 36 “no” votes, 19 abstentions, and zero “yes” votes. Even the president, who initially said that Cyprus had no choice but to say yes, was already moving on to Plan B before the vote was even taken, although no one yet is entirely clear what exactly Plan B entails.

A much better alternative for Cyprus

March 19, 2013

Andrew Ross Sorkin defends the Cyprus deal today, on the grounds that (a) Cyprus is “tiny”, and “largely irrelevant to the global economy”; (b) Cyprus is a genuinely unique case; (c) it would be grossly unfair not to bail in Russian depositors, who are generally losing less than they’ve made in interest over the past few years; and (d) the Greek alternative “will not work in Cyprus”, and that therefore (this last bit is only implied, never stated outright) the current plan is really the only option.

Counterparties: Insane in the Mediterrain

March 18, 2013

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Must investors be on Twitter?

March 18, 2013

Izabella Kaminska and Joe Weisenthal have both, in their own ways, weighed in on the importance of Twitter to investors. Here’s Kaminska: