Monthly Archives: September 2007

The Sunny Side of Lehman’s Earnings

The Lehman earnings look weirdly different now, in the aftermath of the 50bp rate cut, than they did this morning, when most of the market was expecting just 25bp. Back then, John Carney was doing his best Old Curmudgeon act, … Continue reading

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Murdoch Sees WSJ.com Going Free

It’s all but official: WSJ.com is going free. Rupert Murdoch himself said as much today, at a Goldman Sachs conference in New York: “We don’t mind what platform news appears on. We’re platform neutral: newsprint, your Blackberry, your PC or … Continue reading

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Fed Surprise

It’s 50bp, and it’s unanimous! So much for prediction markets. The half-point gap between the funds rate and the discount rate remains, but with the discount rate now at 5.25%, it’s definitely more attractive to banks facing liquidity problems. The … Continue reading

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The Role of News in the Hedge Fund Economy

Paul Kedrosky picks up on a Bloomberg photo of hedge fund manager Adam Sender. By my count, he’s sitting in front of no fewer than eighteen screens (although one, mercifully, seems to be switched off). Also by my count, and … Continue reading

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People who use Google are Valuable

Megan McArdle doesn’t have a lot of faith in those of us who Google. People who arrive at a website from Google, she says, are "low quality" in terms of their value to advertisers: As far as advertisers are concerned, … Continue reading

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The Oil Price as a Dry Run for a Carbon Tax

Greg Mankiw must be happy: Oil just hit a new high of $81.24 a barrel this morning. This is a Pigovian tax with the proceeds going to Saudi Arabia rather than the US Treasury, but if Mankiw is right that … Continue reading

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How Google Killed Web Subscriptions

Everybody knows that Google has won the search-engine war. But what’s much more important is that Google has won the search war – and the latest casualty is TimesSelect. The subscriber firewalls at the WSJ and the FT will be … Continue reading

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Knock-Off Fashion

I’m very happy that James Surowiecki has used his bully pulpit in the annual Style Issue of the New Yorker (perfect bound, with a Gucci ad on the outside back cover) to take a well-aimed potshot at the ridiculous (and … Continue reading

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Fed Cut: Eyeing the Discount Rate

OK, no more Greenspan blogging, I hope. Instead – rate cut blogging! Obviously I have no idea what the Fed will do this afternoon, or even really what it should do. But my gut feeling is that Bernanke should announce … Continue reading

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Alan Greenspan and the Strait of Hormuz

This morning, I quoted Alan Greenspan, foreign policy wonk, implying that he wants the US to attempt regime change in Venezuela. Greenspan’s attitude to Hugo Chávez was so startling – even Otto Reich wouldn’t say that kind of thing on … Continue reading

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How did Brad DeLong Become Alan Greenspan’s Apologist in Chief?

It’s not very often that Brad DeLong and Paul Krugman find themselves epitomizing opposite sides of an issue, but DeLong seems to have become Alan Greenspan’s apologist in chief even as Krugman sticks the knife in to the Maestro today. … Continue reading

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Managers Without Morals

Today comes news that newly-minted MBAs are making more money than ever before, which made it an excellent day for Princeton University Press to host a lunch in New York to plug Rakesh Khurana’s new book, "From Higher Aims to … Continue reading

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There’s No Such Thing as an Objective Credit Rating

Vickie Tillman of S&P has an interesting letter in the WSJ today, defending the ratings agency against the kind of charges made by Jesse Eisinger in last month’s Portfolio. S&P is not conflicted, she says, by the fact that its … Continue reading

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Northern Rock: No Need to Panic

In the Times of London today, Anatole Kaletsky worries about the magnitude
of a potential mass
liquidation
of Northern Rock’s liabilities:

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Greenspan: Book Release Day Arrives

I apologize for yet more Greenspan blogging, but today is after all the day his book is officially released, and there’s loads of material out there worth linking to. Paul Krugman is on good form, attacking Greenspan’s support for Bush’s … Continue reading

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The Limits of Empiricism

Two interesting reviews today: David Leonhardt on Ian Ayres, and Daniel Davies on Steven Levitt and Roland Fryer. There’s a meme catching hold – think Freakonomics and Moneyball – which says that rigorous empirical analysis can reveal otherwise-unobtainable insights. But … Continue reading

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Greenspan’s Notorious 2001 Congressional Testimony

After defending Alan Greenspan’s monetary policy, Brad DeLong now steps up to the plate to defend his notorious 2001 testimony in favor of the Bush Administration’s sweeping tax cuts. If you actually read the testimony, he says, it’s full of … Continue reading

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Defending Greenspan

"If you want to blame the subprime crisis on loose monetary policy from the years of the dot.com bubble burst, you have some explaining to do," says Tyler Cowen, who may or may not be talking about John Cassidy. Brad … Continue reading

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Greenspan Points Fingers, But Takes no Blame

The WSJ has got its hands on Alan Greenspan’s new book, and it certainly sounds like he’s more interested in making excuses and pointing fingers than he is in taking responsibility for the consequences of his actions. The Republicans "deserved … Continue reading

Posted in fiscal and monetary policy | 1 Comment

Adventures in Structured Credit, Ratings Edition

Take a bunch of AA-rated securities. Boring, I know. So instead of just buying them, buy them with leverage, to boost their returns. Now, take that bundle of leveraged AA-rated debt, and tranche it, so that there’s a super-senior AAA-rated … Continue reading

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Fred Wilson Can’t get a Prepaid iPhone

If you buy an iPhone, you have to sign up for a two-year contract with AT&T. Your bill comes every month, and then you pay it. Because you’re paying the bill after you make the phone calls, this is a … Continue reading

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Metaphor of the Day

Justin Urquhart-Stewart of Seven Investment Management, quoted by the BBC: "You have to look at all these bad loans as a bit like a blancmange that’s been hit very heavily by a spade and it’s gone everywhere."

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Banks’ Capital in the Era of Re-Intermediation

Charles Goodhart says in the FT today that there’s loads of money sloshing around the banking system; what’s missing is not liquidity, but capital. He explains: Just as the central bank is lender of last resort to banks, so banks … Continue reading

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Pimco’s Endowments

Jenny Anderson moves the El-Erian story forwards today, talking to a number of former endowment chiefs about how tough the job is, and finding one startling statistic: Nationally, more than 40 percent of the top investment executives within universities and … Continue reading

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ATM Fees as Bully Tactic

In the literature, the question of ATM fees is generally considered to be a regulatory problem: should they be banned? In the real world, Bank of America has raised its ATM fee to $3. Which is the kind of thing … Continue reading

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