Monthly Archives: December 2007

Ben Stein Watch: December 9, 2007

Posted on December 9, 2007 by Felix

Ben Stein dedicates this week’s column to the mistakes he made in 2007. Those mistakes include bad stock picks, bad hotel-room picks, and spending too much money. Weirdly, however, he admits to no mistakes whatsoever when it comes to his … Continue reading →

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Extra Credit, Weekend Edition

Posted on December 8, 2007 by Felix

How big a deal? Paul Krugman on the mortgage-freeze plan. One Perspective on Gas Prices True Story: TED on why fairness opinions are bunk. M&A bonanza: Dollar’s fall delivers takeover bargains

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World Bank Pays Off Nicaraguan Debt at 4.5 Cents on the Dollar

Posted on December 7, 2007 by Felix

Here’s something which hasn’t got a lot of traction in the press: the World Bank has just spent $61 million on paying off a bunch of old Nicaraguan debt dating back to the late 1970s and early 1980s. The amount … Continue reading →

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Free Music: A Good Idea

Posted on December 7, 2007 by Felix

Why is Marek Fuchs hating on Universal today? He says that the dumbest thing he’s seen on Wall Street this week, rating 95 on his Dumb-O-Meter, is Universal’s plan to give away its music over Nokia cellphones. Writes Fuchs: The … Continue reading →

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The “Bailout” Artists: A Roster of Shame

Posted on December 7, 2007 by Felix

I clearly spend too much time reading blogs, because I stupidly thought it was only right-leaning bloggers who would be so thoughtless as to refer to the mortgage-freeze plan as a bailout. Tinbox, however, notes that in fact it’s the … Continue reading →

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Why Does Goldman Sachs Need 10 Acres of Trading Floor?

Posted on December 7, 2007 by Felix

Gari N Corp has a question: Why do investment banks need such big trading floors? Are we talking about one big floor for everyone, or multiple huge floors? I mean, is it just about creating a collegiate atmosphere? Compliance (avoiding … Continue reading →

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Why Apple’s Right to Sit on its Cash

Posted on December 7, 2007 by Felix

The Apple share price seems never to go down. It did have a nasty lurch last month, when the price dipped to $153.76 on November 12 from its high of $191.79 on November 6 – that’s a fall of almost … Continue reading →

Posted in stocks, technology | 6 Comments

A Plea, Part 2

Posted on December 7, 2007 by Felix

Tyler Cowen stops short of calling the mortgage-freeze plan a bailout, so he’s exempt from the last plea. But this kind of thing is still very annoying: There are two main arguments for breaking the loan contracts. The first is … Continue reading →

Posted in housing | 1 Comment

A Plea

Posted on December 7, 2007 by Felix

Please can the punditosphere stop referring to the mortgage-freeze plan as a "bailout"? As Edmund Andrews says in his first sentence on the front page of the NYT today, it isn’t. The FHA’s FHASecure plan, which has existed for ages, … Continue reading →

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The Mortgage-Freeze Plan: Still Very Little Litigation Risk

Posted on December 7, 2007 by Felix

Yves Smith today plays gotcha with the American Securitization Forum, the private-sector group which was instrumental in putting together the mortgage-freeze plan officially announced yesterday. It turns out that the plan is at odds with earlier ASF guidance on loan … Continue reading →

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How Trading Floor Availability Creates Financial Districts

Posted on December 7, 2007 by Felix

John Gapper says that "something about financial centres seems to make them split into different districts" – citing West Kowloon in Hong Kong and Canary Wharf in London as financial districts which have sprung up as alternatives to the historic … Continue reading →

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Extra Credit, Friday Edition

Posted on December 7, 2007 by Felix

It’s Not 1929, but It’s the Biggest Mess Since: "This may not be 1929. But it’s a good bet that it’s way more serious than the junk bond crisis of 1987, the S&L crisis of 1990 or the bursting of … Continue reading →

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Why Lenders Love the Mortgage-Freeze Plan

Posted on December 6, 2007 by Felix

I just got off the phone with a former colleague of mine, who was wondering who the losers are in the subprime freeze. What will this do to the balance sheets of banks and buy-side institutions who ultimately own the … Continue reading →

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Subprime Reading

Posted on December 6, 2007 by Felix

The Milken Institute has chosen today to launch three big studies on subprime mortgages, which certainly makes it timely. In the first one, we’re told that subprime mortgages do help increase homeownership. (Whether that’s a good thing or not is … Continue reading →

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The Subprime Monologues

Posted on December 6, 2007 by Felix

Thanks to the wonders of webcasting, I spent a large chunk of this afternoon listening to president George Bush, Treasury secretary Hank Paulson, HUD secretary Alphonso Jackson, ASF executive director George Miller, FDIC chairman Sheila Bair, as well as men … Continue reading →

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Art Basel Miami Beach Datapoint of the Day

Posted on December 6, 2007 by Felix

From the WSJ’s On the Block blog: At the UBS tent party on the beach behind the Delano Hotel, the fire marshal had be called in by 9 p.m. to control the wealthy crowds supping on shrimp, lobster and caviar. … Continue reading →

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Financial Innovation of the Day: E*Trade’s Springing Lien Notes

Posted on December 6, 2007 by Felix

Peter Eavis has dug up E*Trade’s 8K relating to the Citadel investment, and has discovered something rather weird. Citadel’s E*Trade bonds mature in 2017. And it seems that they are pari passu with all the rest of E*Trade’s debt until … Continue reading →

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The Subprime Plan: Now, It’s Political

Posted on December 6, 2007 by Felix

The Paulson subprime mortgage plan, it would seem, is now the Bush subprime mortgage plan. According to the WSJ, the plan "includes" a non-binding agreement by servicers and investors to freeze the teaser rate on some loans for five years. … Continue reading →

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NYT Revisits Goldman’s Mortgage Underwriting, Sensibly

Posted on December 6, 2007 by Felix

If I was an editor at the New York Times, the first thing I’d do after Chris Dodd started waving a Ben Stein column around would be to wonder if there was anything in it at all which could be … Continue reading →

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Google Battles the France-Microsoft Alliance

Posted on December 6, 2007 by Felix

Jonathan Last has an entertaining attack on Google Book Search in the latest Weekly Standard. Last starts off well, but he does rather disappears off the deep end by the time he finishes, alleging that "Google is trying mightily to … Continue reading →

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Extra Credit, Thursday Edition

Posted on December 6, 2007 by Felix

Looking for the Weaknesses in United Rental’s Lawsuit Spiky America I lost my appetite: How come risk appetite seems to be so volatile? Peter Orszag: blogging! Fake it until you make it: A housing flipper saga Productivity Is Revised Higher, … Continue reading →

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Subprime Datapoint of the Day, Auto Loan Edition

Posted on December 5, 2007 by Felix

And you thought subprime mortgages had high default rates. William Adams, Liran Einav, and Jonathan Levin examine subprime auto loans: The average purchaser finances around 90 percent of the price of the automobile, with the average loan size being around … Continue reading →

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Cost Inflation in Hollywood

Posted on December 5, 2007 by Felix

Tyler Cowen has high praise for the FT’s coverage of the Hollywood writers’ strike, and for this passage in particular: While broadcasters have more rights, they also have to fund production, which is increasingly expensive. The cost of a one-hour … Continue reading →

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Second Thoughts on Malawi’s Fertilizer Subsidies

Posted on December 5, 2007 by Felix

When the word "simply" appears in a headline about development issues, be very, very cautious. That’s what happened in story that the NYT splashed on its front page Sunday: "Ending Famine, Simply by Ignoring the Experts", by Celia Dugger. The … Continue reading →

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What’s a CDO?

Posted on December 5, 2007 by Felix

I could tell you, but it’s more fun to show you.

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