Monthly Archives: April 2007

Playing the Carry Trade

The idea behind the carry
trade
is simple: you take (or borrow) money in a low-yielding country, such
as Japan or Switzerland, and then invest that money in a high-yielding country,
such as Britain, Iceland, or Brazil. This is a strategy which normally works until it doesn’t.
Continue reading

Posted in foreign exchange | Comments Off on Playing the Carry Trade

Congress Eyes Hedge-Fund Tax Loophole

While US savers are generally allowed to save no more than $20,000 tax-free per year, hedge-fund managers can keep tens or hundreds of millions of dollars in income without paying any tax on it for years.
Continue reading

Posted in hedge funds, taxes | Comments Off on Congress Eyes Hedge-Fund Tax Loophole

£1 = $2

Those of us with a vaguely transatlantic bent have been mentally doubling UK
prices (or halving US ones) for some time, but now it’s official: the
British pound is worth more than $2
.
Continue reading

Posted in foreign exchange | Comments Off on £1 = $2

The $5 Trillion at the Base of the Pyramid

For an interesting long-tail play, it might be worth thinking not about houses which sell for $200 million, but rather about houses which sell for $2,000.
Continue reading

Posted in economics | Comments Off on The $5 Trillion at the Base of the Pyramid

Quantifying Subprime Losses

Fremont sells more subprime loans at a loss of just 3.5%.
Continue reading

Posted in bonds and loans, housing | Comments Off on Quantifying Subprime Losses

SEC Official: Insider Trading Makes for Efficient Markets

In a world of important pricing efficiency, you want insiders trading because the price will be more efficient. That is as it should be.
Continue reading

Posted in derivatives | Comments Off on SEC Official: Insider Trading Makes for Efficient Markets

The H1-B Fiasco

Compared to most immigrants, holders of H1-B visas are highly educated, pay lots of taxes, and benefit both the economy and their local communities. The cost of educating them has been borne elsewhere, and now they want to give the benefits to the US. As a nation of immigrants, it should be welcoming them with open arms.
Continue reading

Posted in immigration | Comments Off on The H1-B Fiasco

Power Laws and Luxury Goods

A new index from Merrill Lynch is a bet that the rich will continue to get richer, and that as and when they do so, they’re likely to splurge on ostentatious displays of wealth from established brand-names.
Continue reading

Posted in consumption | Comments Off on Power Laws and Luxury Goods

Tom Wolfe and the New Vulgarians

Sometimes, the war between the old millionaires and the new billionaires is one of those fights you really want both sides to lose. But then you realize that if it didn’t exist, Tom Wolfe couldn’t write about it. And that really would be a shame.
Continue reading

Posted in hedge funds | 3 Comments

ABN’s Groenink Watches an Era’s End Approach

It’s not that old-school aristocratic financial institutions can’t survive in today’s cutthroat world. But ABN Amro’s Rijkman Groenink knows that his bank will get sold to whoever can offer his shareholders the most money. Which might be a little vulgar, but is also perfectly old-fashioned in its own way.
Continue reading

Posted in banking | Comments Off on ABN’s Groenink Watches an Era’s End Approach

Sallie Forth to a BB Rating

In 1997, Sallie Mae was a government agency with a triple-A rating. Five years later, it was down to single-A. Five years after that, it’s likely to be down to BBB at the highest. That’s progress, that is.
Continue reading

Posted in private equity | Comments Off on Sallie Forth to a BB Rating

Alice Rawsthorn loves Nick Knight

The NYT is running an article about Nick Knight today, written by Alice Rawsthorn. It’s a big sloppy wet kiss of a profile, complete with gushing quotes from Nadja Swarovski, who’s not only a major Knight client but who is … Continue reading

Posted in Not economics | Comments Off on Alice Rawsthorn loves Nick Knight

John Cassidy on the Economics of Climate Change

John Cassidy tells us that he isn’t "secretly working for a corporate-funded
think tank that churns out skeptical studies on global warming". Maybe
he should be, if he keeps on writing stuff like this.

Continue reading

Posted in climate change | Comments Off on John Cassidy on the Economics of Climate Change

DoubleClick Finally Regains its Pre-Crash Valuation

DoubleClick was worth pretty much exactly $3.1 billion in December 1999 – which is the same price that Google is paying today.
Continue reading

Posted in stocks | Comments Off on DoubleClick Finally Regains its Pre-Crash Valuation

On that illustration

There’s been a bit of interest in the cartoon of me on the Portfolio website, but no one’s worked out where it comes from. In fact, the source is my Christmas mitzvah from December 2005, when I drove a Zipcar … Continue reading

Posted in Not economics | 4 Comments

Mel Karmazin, Failure?

"I like the idea of the report card—the stock price," Mel
tells Portfolio’s Nancy Hass. Does that mean he’s officially giving himself an F?

Continue reading

Posted in Portfolio | Comments Off on Mel Karmazin, Failure?

The $200 Million Apartment

More
evidence
that house prices are moving towards a power-law
distribution
.
Continue reading

Posted in housing | Comments Off on The $200 Million Apartment

Market Movers

It’s live! Up until now, I’ve been crossposting to felixsalmon.com, but now that portfolio.com has finally been unveiled to the world, you’ll have to go there to read most of my finance blogs. You can always get there by going … Continue reading

Posted in Econoblog | 3 Comments

When Free Isn’t Good

Nothing makes me happier than services which are cheaper and better than the alternative; free-and-better, is, in theory, the best combination of all. But it still makes sense sometimes to want to pay a bit of money.
Continue reading

Posted in economics | Comments Off on When Free Isn’t Good

When Free Isn’t Good

Anil Dash has a wonderful piece of contrarian thinking up on his blog — it’s actually a week old, but it’s really timeless. A little while ago, my friend Michael Sippey, whom I had the pleasure of interviewing the other … Continue reading

Posted in Econoblog | 1 Comment

FS vs GS in the ES

The only thing better than writing blog entries about how Goldman Sachs should be taken private? Having a journalist from the London Evening Standard phone up a Goldman flack and ask for a response.
Continue reading

Posted in private equity | Comments Off on FS vs GS in the ES

Vincent Price for Citigroup CEO?

The advantages of hiring a CEO who can literally twirl his mustaches.
Continue reading

Posted in banking, facial hair | Comments Off on Vincent Price for Citigroup CEO?

FS vs GS in the ES

The only thing better than writing blog entries about how Goldman Sachs should be taken private? Having a journalist from the London Evening Standard phone up a Goldman flack and ask for a response. Genius.

Posted in Econoblog | Comments Off on FS vs GS in the ES

Vincent Price for Citigroup CEO?

The New York Post has a wonderfully gossipy piece by Paul Tharp today on who might take over at Citigroup if and when Chuck Prince gets the boot. Tharp concentrates on the fight between Vikram Pandit and Robert Druskin, which … Continue reading

Posted in Econoblog | Comments Off on Vincent Price for Citigroup CEO?

Wolfowitz Must Go

If Paul Wolfowitz hangs on to his job, an unpopular lame duck, that would be the worst possible outcome in terms of energizing the Bank’s staff to do its vital work of fighting poverty.
Continue reading

Posted in pay, world bank | Comments Off on Wolfowitz Must Go