Felix Salmon

Don’t fear the bubble

May 22, 2013

Tyler Cowen has no truck with the Bubble Crew. He aligns himself with Paul Krugman and against Jesse Eisinger; we can add Gillian Tett to Eisinger’s side of the debate, and Jim Surowiecki to Cowen’s.

The HP capital-structure arbitrage

August 1, 2012

Last week, Arik Hesseldahl — a tech writer who’s the first to admit he’s no expert on finance — discovered the wonderful world of credit default swaps in general, and single-name CDS on Hewlett-Packard, in particular. The cost of single-name protection on HP has been going up, and that can only mean one thing: it’s “mainly a barometer of the state of anxiety over its finances and its balance sheet”, he wrote.

How QE works

November 4, 2010

Gawker’s John Cook asks me a question about how the Fed’s quantitative easing is supposed to work:

The Dow yields more than 10-year Treasuries

July 1, 2010

Calculating the dividend yield on stock indices is more of an art than a science, since no one knows for sure exactly what dividend the stocks in any given index are going to pay over the next year. But one good estimate puts the dividend yield on the Dow at 3.1%, while Eddy Elfenbein has calculated it to be 2.9%. Either way, it’s higher than the current yield on the benchmark U.S. Treasury bond, which was last seen at 2.89% and falling.