Happy Friday, View fans. Here are your annotated afternoon links. Have a great weekend.
Bless her soul. Why do so few politicians ask the kinds of questions Elizabeth Warren does about the government's dealings with huge financial-services companies? Her latest target is Sallie Mae, the student lender. The Massachusetts senator sent a letter yesterday to Treasury Secretary Jack Lew and Education Secretary Arne Duncan asking why their departments keep extending the company's contracts "despite Sallie Mae's pattern of breaking the rules and ignoring its contractual obligations." The company has had several run-ins with regulators in recent years. "While the government has been quite tolerant of Sallie Mae's failings and helped Sallie Mae maintain its profitability, it is not nearly as generous when it comes to student borrowers," she wrote. "For students who default on their federal loans, the accountability is relentless." Click the links for her letter and a Huffington Post article by Shahien Nasiripour.
This comment is getting a lot of attention: "The Fed is the greatest hedge fund in history," Buffett told students yesterday at Georgetown University. Some hedge-fund managers might balk at the comparison. Hedge funds typically mark their investment positions at market values. The Fed doesn't. It uses its own set of accounting rules rather than GAAP. Plus, it gets to print money and set interest-rate benchmarks. If real hedge funds could pull those tricks, there's no telling how much more profitable a lot of them would look. (The second link takes you to a 2008 column about the Fed's unique accounting practices.)
New York Times Co. is paying a dividend again
Ryan Chittum at Columbia Journalism Review says this is unwise, citing the experience of Dow Jones & Co., which for many years paid far too much money in dividends to please Bancroft family members who held voting control over the company: "The problem is, every dollar shuffled off to shareholders is a dollar that can’t be reinvested or socked away to secure the Times's future. That’s a big reason why The Wall Street Journal fell into the hands of Rupert Murdoch."
Why do people wait in line outside Apple stores to buy iPhones?
I don't understand. Probably never will. But they do. Not just in the U.S., but everywhere. Here's an article from the Telegraph in the U.K. The accompanying video shows customers (more like cult followers, really) jumping for joy as they leave the store with new 5s models. Reminds me of the lines outside record shops during the 1970s to buy Rolling Stones concert tickets.
Too-big-to-fail? Not too big? Oh, let's have a show of hands
The vote by the Financial Stability Oversight Council to label Prudential Financial Inc. a "systemically important financial institution" wasn't unanimous. One of the members who voted against it was Edward DeMarco, acting director of the Federal Housing Finance Agency, which regulates Fannie Mae and Freddie Mac. He noted "the availability of other tools or methods to address identified risks," according to the Wall Street Journal. Here's a thought: How about letting the markets sort things out?
(Jonathan Weil is a Bloomberg View columnist. Follow him on Twitter.)