Lunchtime Links 7-16

July 16, 2009

More secret than sensible (WashTimes)  Walker Todd and Bill Ford argue that the Fed’s balance sheet is terrifically overlevered relative to underlying capital.  Once upon a time, when assets were held entirely in Treasuries, this wouldn’t have been so alarming.  Today, a good chunk of the Fed’s assets are in toxic securities.  And because the Fed doesn’t keep its books according to GAAP, it doesn’t take loan loss reserves against these assets.

The AEI vs. the real world (Baseline Scenario)  James Kwak calls out Peter Wallison, who is among the Republican appointees to the new panel charged with investigating the financial crisis, for his rigidly ideological defense of financial innovation.  The one big point in Wallison’s defense is that he’s complained about Fannie and Freddie dating back to the 80s.

57% tax looms for NYC’s top earners (NY Post)

Brooksley Born is back! (speaker.house.gov)  The former chairwoman of the CFTC, who got railroaded by Summers/Greenspan/Rubin when she tried to regulated OTC derivatives, was appointed to the newly formed Financial Crisis Inquiry Commission.  This is the committee that Wallison was also appointed to.  My guess is it won’t amount to much, partisan bickering is more likely on this commission than, say, the 9/11 commission.

Rein in insane health costs (David Walker)  The former Controller General at GAO, and the guy featured in IOUSA, pens this op-ed about the potentially ruinous growth in health care costs.  He’s a non-partisan guy and he’s very worried about plans to expand health care coverage before we address the more fundamental problem of the cost of delivering services.

Why are cheap airlines so cheap? (Flowing data, ht NG)  An interesting chart.

Lessons for the future (VoxEU)  Economist Guido Tabellini has some ideas for the world’s financial future.

Twitter vitals leaked (TechCrunch)  The revenue estimates appear to be placeholders.  The company has no revenue model yet so even they can’t gauge the cash that will come to the top line when they start selling stuff.  More interesting is the data about cash in the bank and expenses.  That gives us an idea of Twitter’s burn rate and when they’ll have to do their next capital raise.

7 personal financial miracles (Intuit)  Maybe this could be you.

Once-trendy crocs could be on their last legs (WaPo)

A lot of penguins (pic)

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