Felix Salmon

A smarter way of subsidizing parenthood

Ben Walsh has a great roundup of the discussion surrounding Reihan Salam’s proposal that we institute a surtax on the childless. At a societal level, we want population growth — more children — but when it comes to individual households like my own, there are often compelling reasons to have few or no children at all. As countries get richer, their birth rates decline, with nasty demographic consequences.

Janet Yellen didn’t gaffe

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It’s become received opinion that Janet Yellen made a “rookie gaffe” in her first press conference as Fed chair, thereby “rattling markets”. She didn’t.

Annals of captured regulators, NY Fed edition

Peter Eavis has a worrying story today: the chairman of the New York Fed, William Dudley, has effectively, behind the scenes, managed to delay the implementation of an important new piece of bank regulation.

The bank tax rises from the dead

Back in January 2010, Barack Obama — flanked by Tim Geithner, Larry Summers, and Peter Orszag — unveiled a new tax on big banks, or a “financial crisis responsibility fee”, as he liked to call it. Of course, this being Washington, the initiative never got off the ground, and was largely forgotten — until now:

Felix Salmon smackdown watch, pensions edition

Many thanks to John Arnold for responding to my post about how he (and his foundation) should approach pension reform. We agree on many things, it turns out; but there’s one big area where we disagree, which is encapsulated most cleanly in the question of what exactly is going on in San Jose mayor Chuck Reed’s Pension Reform Act. I characterized Reed’s ballot initiative as “allowing governments to default on their pension obligations”, and “an attempt to renege on governments’ existing pension obligations”. Arnold says I’m entirely wrong about that:

Pension politics

David Sirota has a very important scoop today: the PBS series “Pension Peril” has secretly* been funded by John Arnold, a billionaire powerbroker with an aggressively anti-pensions political agenda. This looks very bad for PBS — but it’s also bad for Arnold, who generally gets glowing press, and who would seem to have no good reason to have insisted on secrecy when writing the $3.5 million check that made the series possible.

Puerto Rico needs to prepare for its default

Ryan McCarthy has a good round-up of Puerto Rico’s debt problems, which have now been exacerbated by S&P downgrading the island’s bonds to junk status. (Moody’s and Fitch are certain to do so as well, in short order.) For a good one-stop overview of most of the big issues, I can recommend Nuveen Asset Management’s note, which includes this chart:

Barack Obama vs zombies

There’s a strain of triumphalism coursing through the blogosphere today, on the grounds that the bonkers wing of the Republican party is going to have achieved exactly none of its own goals, while inflicting upon itself a massive black eye. The markets are feeling vindicated too: over the past week of DC craziness, the stock market has risen, pretty steadily, a total of about 2.5%. As a trading strategy, “tune out all news from inside the Beltway” seems to have worked very well — it’s a complete vindication of the Nassim Taleb idea that investors shouldn’t read the newspaper. On top of that, the potential debt default was by its nature almost impossible to trade: outside a few obscure instruments like US CDS, it’s very difficult to make money from a trade betting that tails are going to get fatter, for a short while.