On Dumb Questions I’ve Had For Science
If you find a dinosaur in your backyard, you can keep it!
http://whyfiles.org/029dinos/sue4.html
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On Today Only: The Awl Is Auditioning New Commenters!
@Nrbelex
I'm willing to sell my three digit number to the highest bidder
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On Psychological Risks Associated With Pencil Sharpening, From David Rees' 'How To Sharpen Pencils'
Is there going to be a pencil sharpening tomorrow night? I'm asking for a friend who has many unsharpened pencils that she could bring.
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On What Books Make You Cringe To Remember?
@Clarence Rosario
I loved A Separate Peace. I stayed home sick from school and read the whole thing in an entire day. Oh, the tears! But the best part is when some other kid in my English class presented his diaorama on the book, he spelled it "A Separate Piece". Still makes me giggle.
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On 'The Hunger Games': Bloodless, Sexless and Not Very Hungry
@jorden
The Awl is a major blog?
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On To Nowhere Island! In The Middle Of The Sea
@Sara Morrison@twitter
Can we make it a loop through St. Helena, Tristan, South Georgia/Sandwich Islands and Falklands? This cruise would meet all of my South Atlantic island hopping needs.
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On My Afterlife Is Going to Have So Much Polygamy....
But descendants of slave owners are free to condemn slavery, right?
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On Penguin Briefly Distracts Old People From The Ever-Present Awareness Of Impending Death
Put a sweater on it.
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On Dick Joke
@stuffisthings
The star traders are most likely going to start their own hedge funds (which, btw, is how the hedge fund industry has been working for years). The system generally works as follows: 1. Joe Trader works at Goldman Sachs on the prop desk (i.e., trading Goldman's own capital) 2. Joe Trader makes a lot of money for Goldman trading its own capital 3. Joe Trader decides he can break out on his own so he opens his own hedge fund with the marketing pitch "Hey, I made money trading Goldman's money, I can make money trading yours! Please give me your money".
Dodd Frank has put limitations on banks trading their own money. The reason you should care (if you do), is that for some periods, Goldman's stock price rose based almost solely on gains from the prop desk (i.e. Goldman trading its own money). Which counter-intuitively, means that little people like you and me can get star Goldman traders working for us by buying publicly traded shares of Goldman. This article gives a good overview of the Dodd Frank/prop desk/hedge fund overlap.
http://www.pionline.com/article/20110307/PRINTSUB/303079971
The argument for moving these guys out of banks has to do with risk management. For example, if 100 investors each put $1 million into a hedge fund, the manager would be trading $100 million. If he gets reckless and bets the bank on the Euro collapsing, then those 100 investors each lose $1 million. But there's not much 'systemic' risk beyond that. No FDIC insurance. No SIPC insurance. No government bailout. Tough luck. But if a bank bets its own capital but makes a mistake (e.g., MF Global, every bank 4 years ago), it can be hard to untangle the mess.
See an article on the collapse of internal hedge funds leading to the collapse of Bear Sterns.
http://www.hedgeco.net/hedgeducation/hedge-fund-articles/bear-stearns-the-domino-effect-that-began-with-the-hedge-fund-collapse/
Obviously the previous hedge fund/Euro example can get more complicated with leverage and derivatives (which other parts of Dodd Frank are trying to keep a handle on), but it still keeps the problem more isolated than when it's within a big bank.
The Long Term Capital Management is an old story (and a good one!) but the industry consensus seems to think it is unlikely to happen again. Banks had overextended credit to LTCM. Wish I had more time to research hedge fund collapses in 2008, but they didn't cause the same systemic problems that bank collapses did.
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On Future Brooklyn: The Dadvorcé Mancave
@Clarence Rosario
Haven't you seen the Squid and the Whale?