Monthly Archives: October 2007

Adventures in Technical Analysis, Citigroup Edition

Posted on October 17, 2007 by Felix

David Gaffen notes today that Citigroup shares are now trading at a 2-year low of $43.97 per share. He then quotes this wonderful piece of advice from technical analyst Joseph Hargett: The $45 level “has not been breached on a … Continue reading →

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When Economics PhDs are Too Rigorous for Economists

Posted on October 17, 2007 by Felix

What is an economics degree for? "Marshall Jevons" complains today that it doesn’t qualify people to get accepted into economics PhD programs: We have a system where the engineer or the physicist has greater chance of getting accepted to a … Continue reading →

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Ben Stein Watch, TV Edition

Posted on October 17, 2007 by Felix

Bess Levin watches Ben Stein’s new TV show so we don’t have to: Old Ben has finally given up the charade of being “an economist” and submitted to his true calling: demeaning 14 mildly attractive and cartoonishly stupid contestants (the … Continue reading →

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Retracements and Racism

Posted on October 17, 2007 by Felix

One of the buzzwords in finance circles right now is "reintermediation". It’s the opposite of disintermediation, and it’s what happens when banks go back to old-fashioned lending, carrying assets on their balance sheets, rather than structuring deals between issuers and … Continue reading →

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Chinese Banks: Still Weak

Posted on October 17, 2007 by Felix

Industrial and Commercial Bank of China, or ICBC, has a market capitalization of $334 billion, making it by far the most valuable bank in the world. Citigroup, HSBC, and Bank of America are next on the list, worth about $235 … Continue reading →

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Adventures in Lawyering, MAC Edition

Posted on October 17, 2007 by Felix

Will Christopher Flowers succeed in his attempt to change his mind about buying Sallie Mae? Or will he have to pay the $900 million breakup fee? Many lawyers have weighed in on this subject, most of them on Sallie’s side, … Continue reading →

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Citi-KKR: The Ouroboros is Go

Posted on October 17, 2007 by Felix

Yes, folks, it’s on: it’s not just fantasy, but moving towards reality. Citigroup has a bunch of loans to KKR that it can’t get off its books. So KKR is going to buy those loans, using $8 billion borrowed from … Continue reading →

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Cap-and-Trade: The Return of the Safety Valve

Posted on October 17, 2007 by Felix

If you want to cut carbon emissions, there are some ways of doing so which actually make money, in net present value terms. Some methods, however, cost money – and many of the most promising emissions-reduction schemes cost a lot … Continue reading →

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Google Datapoint of the Day

Posted on October 17, 2007 by Felix

Google now drives more traffic to nytimes.com than links from the nytimes.com homepage and all emailed articles combined. Alex Patriquin has the chart; it shows that in September, the top referral source for nytimes.com was Google, with 4,862,831 referrals. That’s … Continue reading →

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New York Needs Chinese Business Travelers

Posted on October 17, 2007 by Felix

Justin Fox knows what needs to be done to keep New York competitive with London as a financial center: The immigration people at Heathrow are polite to non-UK-citizens and usually get them through the line very quickly. I know that … Continue reading →

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Bed Net Datapoint of the Day

Posted on October 17, 2007 by Felix

From Vivian Hoffmann of Cornell University, via Tom Foster: This paper reports results from a field experiment in Uganda. Whether a mosquito net was purchased or received for free affected who within the household used the net. Free nets were … Continue reading →

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Economic Naturalism, Airplane Edition

Posted on October 17, 2007 by Felix

Fans of "The Economic Naturalist" (see here for an explanation of the idea behind the book, and here for a fan’s notes) are always on the lookout for more everyday puzzles along those lines. So here’s one from Aaron Schiff: … Continue reading →

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When Co-CIOs Disagree

Posted on October 16, 2007 by Felix

Mohamed El-Erian and Bill Gross will, as of January, both hold the title of chief investment officer at bond giant Pimco. Few firms have as much money as Pimco tied up in short-term debt instruments like the ones issued by … Continue reading →

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Looking for Carbon Budgets

Posted on October 16, 2007 by Felix

Many companies and projects, like the documentary Jeff mentioned a couple of weeks ago, claim to be "carbon neutral" – which is a worthy thing to be. But obviously it’s a lot easier to say that you’re carbon-neutral than it … Continue reading →

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The Risk Disclosure Problem

Posted on October 16, 2007 by Felix

Taleb and Greenspan have gotten all the press, but my nomination for book of the year in the finance/economics space (with the important proviso that I haven’t got very far into it yet) is "Plight of the Fortune Tellers" by … Continue reading →

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Abstract of the Day

Posted on October 16, 2007 by Felix

From Case Western’s Erik Jensen: Abstract: Law professors dress scruffily, and we need to do something about that. The paper itself is surprisingly long, with far too many atrocious puns ("as you rip, so shall you sew"). But in case … Continue reading →

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Paulson Gets it Right on Housing

Posted on October 16, 2007 by Felix

Hank Paulson’s speech today about the housing market is spot-on, I think. Let me highlight a few passages, since most of you aren’t going to read all 4,300 words: Recent surveys have shown that as many as 50 percent of … Continue reading →

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China Datapoint of the Day

Posted on October 16, 2007 by Felix

Eight of the 20 biggest public companies in the world, by market capitalization, are Chinese. The US has just seven of the top 20. To put it another way, China Mobile is worth more money than Microsoft, and China Life … Continue reading →

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MemeWatch: Superconduit as Treasury Bail-Out

Posted on October 16, 2007 by Felix

Bloomberg’s Brendan Murray and Simon Kennedy have an article up today headlined "Paulson Credit Push Earns Jeers From Free-Marketers". It kicks off like this: U.S. Treasury Secretary Henry Paulson’s plan to shore up asset-backed commercial paper is drawing criticism from … Continue reading →

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InTrade got the Economics Nobel Right

Posted on October 16, 2007 by Felix

Barkley Rosser is unimpressed by the InTrade speculation about the winner of the Nobel Prize in Economics: The various betting markets on the Sveriges Riksbank Prize for Economics in Memory of Alfred Nobel, such as intrade.com, were just way off. … Continue reading →

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2007’s Mortgages Even Uglier than 2006’s

Posted on October 16, 2007 by Felix

If you thought Citigroup was an unwieldy beast which is hard to turn around, you should have a look at the subprime mortgage industry. It’s now been well over a year since people started to get shocked by subprime default … Continue reading →

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Liquidity and Information

Posted on October 16, 2007 by Felix

The annoyingly anonymous WSJ economics blog (one assumes it’s Greg Ip, but can never be sure) talked to Richmond Fed president Jeffrey Lacker yesterday, and asked him about this year’s Nobel Prize in Economics. In response, he made an interesting … Continue reading →

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Blogonomics: The Long Tail

Posted on October 15, 2007 by Felix

Jeff Bercovici asks: A question for you, Felix: Are you sure increasing the number of bloggers increases the value of the site? I think there’s a point of diminishing returns, and I suspect, with 1,800 bloggers, HuffPo has already passed … Continue reading →

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Speculating over Chuck Prince’s Ouster

Posted on October 15, 2007 by Felix

Duff McDonald stilettoes Chuck Prince in this week’s New York, just in time for Citi’s dreadful earnings. McDonald says that Prince’s CEOship has been "a nightmare" since shortly after he got the top job, largely because he "regularly violated a … Continue reading →

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Blogonomics: Paying for Content

Posted on October 15, 2007 by Felix

I do wish that Mark Gimein will start blogging: he’s a natural. He’s provocative, and interesting, and – at least until the final entry of his guest-blogging stint at Time – unafraid to write long. (This is your own place, … Continue reading →

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