Lunchtime Links 6-15

June 15, 2010

Life insurers win capital reprieve (Scism, WSJ) This is a shame. On one hand, life insurers don’t appear as systemically risky as Wall Street banks, since their liabilities aren’t as unstable. You won’t see a run on life insurance policies the way you might on bank deposits, commercial paper or repos. But life insurers nevertheless dramatically overlevered themselves during the boom, and they invested in all sorts of dodgy paper rated AAA. To protect policy-holders, regulators should err on the side of demanding too much capital…

CFTC approves first movie futures contract (Doering/Rampton, Reuters) For “Takers,” starring Matt Dillon. I wonder: will they have to approve contracts for each individual movie? This also a shame

Leverage, Baby! (Kim/Opdyke, WSJ) No doubt the writers liked the idea of taking a contrarian view, but the analysis in this piece is quite awful. Their basic thesis is that rates are low so investors should lever up to buy assets or just to raise cash. Hmmm, last I checked, cash pays 0%. The reason to pay interest to hold cash is…what precisely? As for asset prices, they look too high whether deflation or inflation is on the horizon. A decade of debt deflation is the most likely scenario, in which case asset prices will fall and debts will be ever more burdensome to service. But even inflation would be problematic, contrary to popular opinion. Higher expected inflation would lead to two things that are toxic for asset values: higher interest rates and higher discount rates for future cash flow streams. Borrowing to buy assets only makes sense if they’re substantially undervalued; the writers don’t make any case for that.

What free Wi-Fi looks like in South Korea… (imgur) ….a lot more impressive than anything you can get in the U.S.!

Bin Laden hunter arrested in Pakistan (BBC) News story or Quentin Tarantino film?

Once just a site with funny cat pictures, now a web empire (Wortham, NYT) I Can Has Cheezburger now has 40 employees. Crazy.

Etch-a-Sketch Chicago (reddit) Pretty awesome. Chicagoans will note the sun is rising from an odd direction, but whatever.

He’s a novelist now?!? (GlennBeck.com) Wouldn’t want to be the ghost-writer that worked on this project…

You would if you could…

triceretops

Comments

A friend made an astute point re: the South Korean internet, that speed is only achievable communicating to a server in South Korea (as the screen grab indicates) but if you’re trying to access a server that’s not in South Korea, the speed dies down dramatically.

Posted by GregHao | Report as abusive
 

Rolfe

Rolfe,

s_ _ _ happens: there was a run on AIG life policies in Hong Kong in 2008:

“..As Chan Akya reports in Asia Times Online on Wednesday panic-stricken policyholders lined up all day on Wednesday in Singapore to surrender their policies to secure redemption value”

This lifted from: http://www.perceptric.com/blog/China/_ar chives/2008

Posted by crocodilechuck | Report as abusive
 

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