Involving: a senator that talked for 8 hours, YET ANOTHER Time Warner Inc. unbundling, and the TSA decides to allow pocket knives back onto planes…

Good morning

The headlines:

  1. A fine day for a filibuster.

    Link: #StandWithRand

    Twitter is alive with Senator Rand Paul going into his, what, 8th hour of Filibustering? Which I’ll admit was a new word for me today:

    filibuster. [fil-i-bus-ter]. n. The use of obstructionist tactics, especially prolonged speechmaking, for the purpose of delaying legislative action.

    Rand is obstructing the nomination of a new CIA director until such time as there are no drone attacks on US citizens by reading news articles and organising replacement speakers for bathroom breaks.

    Makes me want to filibuster something.

    Genuinely though, how long can Senator Paul possibly (forgive me) drone on for?

  2. Dis-integration.

    Link: it’s about TIME.

    Time Warner Inc. has announced that it will be spinning off Time Inc. into a separate publicly-traded company.

    The word on the CEO street is:

    “A complete spinoff of Time Inc. provides strategic clarity for Time Warner Inc., enabling us to focus entirely on our television networks and film and TV production businesses. Time Inc. will also benefit from the flexibility and focus of being a stand-alone public company and will now be able to attract a more natural stockholder base.”

    Right. Just like they did to AOL and Time Warner Cable Inc. It’s all about “a more natural stockholder base”. It has nothing to do with Time Inc. being the worst performing major division of the seven divisions Time Warner Inc. is left with. Even if it was the original one.

    But it’s sad – because I think that real journalism still has a role to play. I mean, sure – they have to move away from plain news reporting – because anyone on twitter can do that. And commentaries are out there in volume (this blog is part of that volume). But investigative journalism? That’s worth paying for. Opinions are cheap, news is news, but uncovering a real story is something else entirely.

    I mean, just look at that medical cost piece that Time Magazine ran a few weeks ago (I wrote about it on Monday: link here). You don’t get that kind of journalism just happening for free!

    My question though: does losing Time Inc. mean a Time Warner Inc. name-change to just plain Warner?

  3. TSA.

    Link: a publicity exercise.

    The US Transportation Security Administration is changing its rules (12 years after September 11) to allow pocket knives and golf clubs back onto planes. And ski poles. And souvenir, novelty baseball bats less than 24 inches long.

    It demonstrates good reason to distrust rule-based regulation: because it inevitably leads to trying to define an indefinable line. I like principles myself: “don’t let on anything that looks dangerous”. But that requires some rationality on the side of security staff.

    And based on the way that airport security queues are currently managed, even on a quiet day, those rules are necessary.

    Still funny though.

  4. Chavez the bond-payer.

    Link: let’s talk about risk.

    When bond traders/valuers talk about risk, what they mean is “risk premiums”. In much the same way that a young adult male pays a higher insurance premium for car insurance than a young adult female – bonds from different countries get hit with a variety of premiums (ie. higher interest rates) as a result of their “risks”.

    So for example, an Australian bond might incur a slight premium over a US bond because the US bond trades in a highly liquid market with depth of trade*. That is: a liquidity premium. Then there’s the premium that most people are aware of: the “likelihood of default” premium. Like that on most Greek and Argentinian bonds. And in most emerging markets, you get political risk premiums in addition to both of the above. Basically, we can talk about a premium for any type of risk that can be separately identified.

    And these premiums (premia?) are used and applied because they made sense historically and we’ve always done it and so on. But do they really make sense?

    Venezuela is the current example. Under Chavez, Venezuela never missed a payment; the country has greater oil reserves than Saudi; and yet it incurred an average interest cost premium of 3.78% every year over average emerging market debt rates.

    Does that really make sense?

    *the bonds are easily sold, and there are lots of traders buying.

That’s all for now.

Have a good day.