Felix Salmon

Counterparties: Krugman-Sachs

March 11, 2013

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Where banks really make money on IPOs

March 11, 2013

Every time an IPO has a big pop on its opening day, the same tired debate gets reprised: did the investment banks leading the deal rip off the company raising equity capital? The arguments on both sides are well rehearsed — I covered them myself in no little detail, for instance, after LinkedIn went public, in 2011.

Counterparties: The depressingly persistent gender wage gap

March 8, 2013

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Annals of quantitative overconfidence, Boeing edition

March 8, 2013

On January 7, the auxiliary power unit (APU) of a Boeing 787 caught fire at Logan airport. The APU is a lithium-ion battery, roughly 1-foot cube, and the consequences of a fire can easily be catastrophic. There was no one on the plane at the time, which is lucky, because the fire was extremely difficult to extinguish, with firefighters encountering “no visibility” thanks to thick smoke. What’s more, the “quick-disconnect knob” was melted. In flight, these batteries control critical flight systems: they cannot fail.

The stagnation behind the excellent jobs report

March 8, 2013

Today’s jobs report is an unambiguously positive one: America had 236,000 more jobs in February than it had in January, and the unemployment rate is down to 7.7%, the lowest it’s been since 2008, before Barack Obama was even sworn in. (Although, it’s still nowhere near the 6.5% at which the Fed will start thinking about tightening monetary policy.) Things are getting better, US fiscal policy notwithstanding, and it’s great to see construction in particular, especially non-residential construction, finally making a substantial positive contribution to the numbers.

Counterparties: (NO) VACANCIES

March 7, 2013

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Why analysts should not be investors, Andy Zaky edition

March 7, 2013

Back in October, Andy Zaky put out his sixth “buy” recommendation on Apple stock. The first five — in July 2006, November 2008, August 2010, June 2011, and May 2012 — all did spectacularly well, and all hit his price target within the time span he specified. Zaky was a first-rate Apple analyst, quoted by me and many, many others; as Philip Elmer-DeWitt says, he had “a series of spot-on predictions”, of everything from Apple’s earnings, to its iPhone sales, to — of course, its stock-price movements.

Counterparties: Ending capital punishment

March 6, 2013

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Why fiscal problems don’t have fiscal solutions

March 6, 2013

The main lesson I’ve learned from the sequester fustercluck, and from the failure of austerity programs in Europe, is that you can steer yourself very, very wrong indeed if you try to find fiscal solutions to fiscal problems.