Wednesday, March 25, 2009

Web ≠ Technology

I wonder when the web will no longer be treated as technology. For example, when printing was introduced, it was likely considered "technology" but, at some point, the medium was no longer interesting in and of itself. Right now, changes to facebook's home page are treated as a tech news item. At some point, I assume they will be covered the same way that a change in a newspaper's format is covered. Or, will it be the case that, because the internet permits interaction, the web will never be fixed and so will be fairly treated as technology for years to come?

Tuesday, March 24, 2009

How do bond funds work?

Or, more accurately, how do bond funds manage to avoid depressing their returns when investors stream in (invariably at the peak, rather than at the bottom)? When new money comes in, the funds need to purchase more bonds - but if money comes in when bonds are expensive, won't that hurt historic investors?

Tuesday, March 17, 2009


We should really stop calling the AIG payments a bailout of AIG - more honest (and perhaps actually more politically palatable) to describe it as the CDS bailout. AIG, as the largest seller of CDSs, was simply a conduit for the payments to the purchasers of CDS protection - that money did not stay with AIG or go to its executives or shareholders.

Wednesday, March 4, 2009

AIG CDS scandal

Again, when will the counterparties to AIG's CDS contracts be named? I believe they were paid out at face with the bailout money. We should know to whom this direct transfer of taxpayer money was sent.

It would have been fair for those counterparties to be stuck (they could sue, there would have been some compensation) or, to cut to the chase, they could have agreed to a negotiated amount equal to their expected litigation proceeds. And, perhaps if there truly was systemic risk, the government could have funded some of that negotiated amount as an advance to AIG.

For the government to have bailed out the counterparties (I'm guess GS for a lot of it) at FACE is wrong wrong wrong.