At Reuters, Felix Salmon has, predictably, the best take on the just-announced $8.2 deal for IntercontinentalExchange Inc. (ICE) to buy the New York Stock Exchange. Yes, that New York Stock Exchange, itself combined these days with another exchange called Euronext.
Felix's basic point — and this may require a bit of gray-cell exertion to get — is that there are basically two distinct worlds in which trading happens: the old school world of stocks, with which we're at least passingly familiar; and a new school world of trades in products that are based on some other product or asset — derivatives.
The derivatives market is vast. But the vast majority of people probably hadn't even heard of derivatives until the financial crisis, when "collateralized debt obligation" and "credit default swap" lurched into the popular vocabulary.
Andrew H. Walker/Getty Images
Niall Ferguson won an Emmy in 2009. He also has some pretty funny lines about capitalism.
Niall Ferguson is an extremely well-known and at times extremely controversial historian of finance, money, and imperialism. Born in Scotland, he now operates from a perch at Harvard. He's not afraid to tangle. And he's not afraid to be funny, something you have to concede no matter what you think of his conservative (some would say reactionary) politics.
I'd never seen him in action until yesterday, when at the Milken Institute Global Conference taking place this week in L.A. I caught him participating in a panel with the modest title of "The Future of Capitalism."
Prof. Ferguson outlined three varieties of existing capitalism: the old-school version we all know so well; a very new state-sponsored variation (see: China); and "cheese-eating" capitalism.
Ferguson enjoyed pronouncing those last few words. The cheese-eaters come from where you think they would: Europe. Social democrat-flavored Europe. Your socialist candidate for president of France, François Hollande, is a pretty solid example of Ferguson's cheese-eater. Hollande probably enjoys his cheese, so it's hardly a leap.
Check this out: the Occupy movement is changing the way that GOP strategists are telling people to talk about the protest phenomenon. Or more accurately, not talk about it.
At Yahoo, Chris Moody captures a series of talking/not-talking points dispensed by Frank Luntz at a Republican governors' gathering in Florida. Here are my two favorites (there are 10 total, plus a bonus, which agues that "bonuses" shouldn't be called that):
1. Don't say 'capitalism.'
"I'm trying to get that word removed and we're replacing it with either 'economic freedom' or 'free market,' " Luntz said. "The public . . . still prefers capitalism to socialism, but they think capitalism is immoral. And if we're seen as defenders of quote, Wall Street, end quote, we've got a problem."
8. Out: 'Entrepreneur.' In: 'Job creator.'
Use the phrases "small business owners" and "job creators" instead of "entrepreneurs" and "innovators."
Eric Richardson / blogdowntown
Those participating in Occupy Los Angeles march toward City Hall.
Yesterday, I blogged about what the "We are the 99%" Occupy Wall Street and Occupy LA protesters are all about. In the interest of fairness, I now want to explore the other side. I wouldn't call them the opposition. But if the 99 percent are angry that increases in income and wages have disproportionately gone to the top 1%, what do the 1% have to say in their defense?
Rich Kalgaard provided a basically textbook point of view in Forbes back in 2007, more than year before that…well, you know, that little problem with the global financial system:
[M]oneygrubbing--a.k.a. the search for profit--has its purpose. Money (profit) is a tool. It is capital. Without capital there is no capitalism. Innovation starves. Prosperity weakens. Societies stagnate. God-given gifts wither. This is especially true for humanity's wonderfully zany outliers: artists, inventors, entrepreneurs. They need capitalism more than anyone.
Money is good, therefore, because capitalism is good. It delivers the goods, literally, and better--broadly and individually--than does any other system.