Buenos Lunes! On with the links.
Remember that scene from the Woody Allen film "Annie Hall" where some know-it-all in line at a movie theater is going on about Marshall McLuhan, and then Allen's character manages to pluck McLuhan out of nowhere onto the set, at which point McLuhan proceeds to tell the smarty-pants guy how he knows nothing of his work? That's kind of what it was like to read this John Taylor blog post, which begins: "I recently read Steve Williamson's interpretation of what I was and was not claiming when I wrote my 1992 paper on what would come to be called the Taylor rule. It's quite a while ago, but I have a different view." (The Taylor rule is a monetary-policy thing, and you can read more about it by clicking the second link.)
For those of you who've been living in a cave and missed all of the 60 Minutes promos on CBS this weekend during the NCAA basketball tournament . . .
Michael Lewis has a new book -- "Flash Boys" -- about high-frequency trading. The gist: He thinks it's bad. The New York Times ran an excerpt.
Here's one of the silly things about the Fed's stress tests .
We really don't know why Citigroup flunked. So in the meantime, we have to settle for news articles anonymously attributed to "executives and others familiar with the matter," such as this Financial Times article over the weekend, which mumbled something about "weaknesses in auditing" being a contributing factor. Wouldn't it better if the Federal Reserve just told us?
Also from the FT: "China's biggest banks more than doubled the level of bad loans they wrote off last year, in a sign that financial strains are mounting as growth in the world's second-largest economy slows." On a similar note, Wall Street Journal reporter Lingling Wei had a revealing story last week about a goofy plan by Bank of China to keep its loan losses low: By selling bad loans to itself. More precisely, it's selling them to its investment-banking subsidiary, which is another way of saying it's selling them to itself. And somehow this is supposed to comply with whatever accounting standards Bank of China uses, although it isn't clear how.
More accounting tricks from banks.
This is a good Heard on the Street column from The Wall Street Journal's John Carney about banks reclassifying their bonds as "held to maturity" as a way to keep losses from hitting their shareholder equity and regulatory capital. The Financial Accounting Standards Board should be embarrassed that it allows this to happen.
Where is Gordon Gekko when he need him?
Here's the headline from Time magazine. "Science Proves It: Greed Is Good."
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