Morning Links 1-27

January 27, 2010

Note: Apologies for no links yesterday. Busy day writing columns!

SEC to vote on new money fund rules (Johnson, WSJ) Unfortunately, the SEC won’t do away with $1 NAVs, price fluctuations will be published on a 60 day lag. So investors will continue to treat money funds as cash equivalents, even though they aren’t, and the systemic risk they pose won’t really go away.

Fed weighs interest on reserves as new benchmark (Lanman, Bloomberg) This will be a key interest rate to watch whether or not the Fed makes it the benchmark. The expansion of the Fed’s balance sheet over the past year+ has stuffed banks full of excess reserves, reserves that banks will lend out if the economy — and loan demand — picks up. The Fed needs to keep those excess reserves sequestered in order to prevent inflation. To do so, it may have to pay higher rates. For a fuller explanation see this previous column.

Failed Senate vote on budget commission shows difficulty in cutting deficits (Faler, Bloomberg) So much for a fiscal commission based on the base-closing commission…

After three months, only 35 subscriptions to Newsday’s website (Koblin, NY Observer) Print subscribers get free online access. But this is still not a good showing for selling online only subscriptions. The NYT needn’t worry that it’s pick up will be this small when they put up their pay wall. I, for one, will pay for their content, as I pay for WSJ. I ‘d subscribe to FT too if their website wasn’t so slow…

Top English central banker supports splitting banks (Thomas, NYT) This should come as no surprise. A speech by Mr. King in October laid out his support for steps similar to those Obama just released.

Roubini: Greece is bankrupt (Khan, CNBC) Thank you, Captain Obvious. 😉

Obama aims to ax moon mission (Block/Matthews, O.S.) There’s no constituency for budget cuts, so Obama deserves support from budget hawks for moves like this. We all like the moon I’m sure. But I like things like veterans benefits much more.

Iraqi government spends $85m on dowsing rods sold as “bomb detectors” (Hawley/Jones, BBC) Those not familiar with dowsing rods, see Wikipedia.

Wait, how much snow? (YouTube) No. He didn’t.



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