Monthly Archives: December 2007

Subprime: It Never Did Help Homeownership

Student of the Tao goes mythbusting, after reading the Seattle Times: Myth 1: Sub-prime mortgages allow bad credit risks to buy homes. Locally and nationally, nearly all of Ameriquest’s loans went to people who already owned homes, The Times found. … Continue reading

Posted in housing | Comments Off on Subprime: It Never Did Help Homeownership

Subprime Prescience at MetLife

Lavonne Kuykendall quotes Steven Kandarian, MetLife’s CIO: Mr. Kandarian said MetLife identified the risk from subprime loans early and stopped buying subprime mortgage-backed securities rated single-A and below in late 2004. Note that MetLife’s fund managers aren’t the kind of … Continue reading

Posted in bonds and loans, housing, investing | Comments Off on Subprime Prescience at MetLife

Cuomo Stalks Wall Street, Mortgage Edition

Andrew Cuomo is on a fishing expedition for mortgage-related malfeasance on Wall Street, specifically sins of omission: The inquiry raises questions about the extent to which securities firms are obligated to dig into the mortgages before slicing them up to … Continue reading

Posted in bonds and loans, housing, law | 1 Comment

Silvio Berlusconi for Citigroup CEO!

In the wake of Saturday’s NYT story that Vikram Pandit looks set to take over Citigroup, a bit of color is emerging: essentially that he’s the best man for the job only insofar as he’s the only person willing to … Continue reading

Posted in banking | Comments Off on Silvio Berlusconi for Citigroup CEO!

Blogonomics: The Gulf Between Bloggers and Professional Journalists

Professional journalists tend to think of their article as the end of a process of reporting, while bloggers tend to think of their entries as the beginning of a process of commenting.
Continue reading

Posted in blogonomics | Comments Off on Blogonomics: The Gulf Between Bloggers and Professional Journalists

Extra Credit, Wednesday Edition

US house price index only now indicating depth of crisis Small-town America: The new Bangalore? Homeowners With Negative Equity The Samwick Family Fund: Giving stock to charity, made easy. Subsidising rootedness: "When people speak of ‘putting down roots’, they generally … Continue reading

Posted in remainders | Comments Off on Extra Credit, Wednesday Edition

Chris Dodd Has Lost His Mind

Dennis Kucinich, maybe, I could understand. Even John Edwards, with his populist streak. But Chris Dodd? I know the chap’s presidential campaign is struggling, but has he forgotten that he’s chairman of the Senate Banking Committee? It would seem so. … Continue reading

Posted in ben stein watch, Politics | 2 Comments

A Chinese Bid for Rio Tinto?

It makes sense all the sense in the world that China, broadly defined, should make a bid for Rio Tinto. If it doesn’t, there’s a very good chance that the BHP-Rio merger will go through – a merger which would … Continue reading

Posted in commodities, M&A | Comments Off on A Chinese Bid for Rio Tinto?

Subprime Paper of the Day

Kristopher Gerardi, Adam Hale Shapiro, and Paul Willen of the Boston Fed: This paper provides the first rigorous assessment of the homeownership experiences of subprime borrowers… We present two main findings. First, homeownerships that begin with a subprime purchase mortgage … Continue reading

Posted in housing | Comments Off on Subprime Paper of the Day

The Weakness of Marking Subprime Bonds to Market

In the case of subprime bonds, marking to market is a pretty crappy way of working out how much those bonds are worth.
Continue reading

Posted in bonds and loans, housing | Comments Off on The Weakness of Marking Subprime Bonds to Market

Which Bondholders Benefit From the Paulson Plan?

Last week, when the Sheila Bair subprime-modification plan became the Hank Paulson subprime-modification plan, I tentatively suggested that junior bondholders might be winners, while senior bondholders could lose out: In reality, it’s almost certain that some bondholders would benefit from … Continue reading

Posted in bonds and loans, housing | Comments Off on Which Bondholders Benefit From the Paulson Plan?

David Woo Defends the Oil Price Denomination Fallacy

David Woo, global head of foreign exchange strategy at Barclays, knows a hell of a lot more about the FX market than I do. And it turns out that Woo doesn’t dismiss the oil-price denomination fallacy out of hand. In … Continue reading

Posted in foreign exchange | Comments Off on David Woo Defends the Oil Price Denomination Fallacy

Optimism in Bali

UN secretary general Ban Ki-moon marked the beginning of the huge climate conference in Bali yesterday with an excellent and upbeat op-ed in the Washington Post. "Largely lost in the debate is the good news," he wrote: "We can do … Continue reading

Posted in climate change | Comments Off on Optimism in Bali

Scenes From the Credit Crunch, UK Edition

It’s really bad out there right now. If you took a snapshot of financial conditions, especially in London, you’d have to conclude it’s now much worse than during the worst days of the summer – the only thing missing is … Continue reading

Posted in bonds and loans | Comments Off on Scenes From the Credit Crunch, UK Edition

Extra Credit, Tuesday Edition

Conversations with the Trading Desk: Rick Bookstaber on the trader’s mindset. Editorialists Gone Wild: The Post on Nafta CRUSHING BEAR HUG FOR HEDGE HONCHO: Ralph Cioffi failed at running hedge funds, now he’s failing at starting them. How to save … Continue reading

Posted in remainders | Comments Off on Extra Credit, Tuesday Edition

Ben Stein Watch: The Aftermath

Dear God what hath Ben Stein wrought? His latest column was as dreadful as most, but it seems to have touched one hell of a nerve. I have a weekly Ben Stein Watch; I had to respond to it. But … Continue reading

Posted in ben stein watch | Comments Off on Ben Stein Watch: The Aftermath

When Fund Managers Change Their Minds

The Swiss fund manager and blogger who calls himself "Baruch" posted a comment on Saturday evening about Research in Motion, currently trading at about $105 a share: I use a standardized DCF approach and have quite a detailed model of … Continue reading

Posted in investing | Comments Off on When Fund Managers Change Their Minds

Why is Warren Buffett Buying $2.1 Billion of Super-Junky TXU Debt?

Warren Buffett just bought a huge chunk of TXU debt at a $125 million discount to face value: Berkshire bought into two issues by TXU. It purchased $1.1 billion of 10.25% bonds at 95 cents on the dollar to give … Continue reading

Posted in bonds and loans | Comments Off on Why is Warren Buffett Buying $2.1 Billion of Super-Junky TXU Debt?

Can Thain Make Merrill More Collegial?

John Thain wants to know why his new colleagues at Merrill Lynch can’t just get along: Mr Thain, whose tenure as Merrill chief executive begins on Monday, said in an interview that he believed there was insufficient co-operation between senior … Continue reading

Posted in banking | Comments Off on Can Thain Make Merrill More Collegial?

Good Ideas on NYC Congestion

Brad Aaron has news of developments with NYC’s congestion pricing plan. If you recall, the mayor put forward a proposal which now needs to be ratified by a whole bunch of constituencies, including the city and state legislatures. But before … Continue reading

Posted in cities | Comments Off on Good Ideas on NYC Congestion

Euro Disney Datapoint of the Day

From Floyd Norris, all figures split-adjusted: Share price of Euro Disney in 1992: €2,500 Price per share paid by Prince Walid bin Talal of Saudi Arabia when he rescued Euro Disney in 1994: €152 Share price of Euro Disney today: … Continue reading

Posted in stocks | Comments Off on Euro Disney Datapoint of the Day

Blogonomics: Gawker Media

A surprising number of people seem to care that there’s a bunch of turnover going on at Gawker: the latest departures have made both the Observer and the NYT today. That very fact proves Gawker’s continuing media-goldfish-bowl relevance: it’s unthinkable … Continue reading

Posted in blogonomics | Comments Off on Blogonomics: Gawker Media

Why Paulson Needn’t Worry About Litigation Risk in his Mortgage Plan

Elizabeth Warren is worried about the investor lawsuits that Hank Paulson’s mortgage-relief plan might trigger. "There is no clear legal basis for doing this kind of wholesale revision of the value of the collateral and forced revision of the mortgage … Continue reading

Posted in housing, law | Comments Off on Why Paulson Needn’t Worry About Litigation Risk in his Mortgage Plan

Signs the Housing Bubble Still Hasn’t Really Burst, Bestseller Edition

The most-gifted book at Amazon.com is Be a Real Estate Millionaire: Secret Strategies for Lifetime Wealth Today. Interestingly, although it’s the most-gifted book, it only ranks at #197 on the overall Books bestseller list. Weird. Are people buying dozens of … Continue reading

Posted in housing | Comments Off on Signs the Housing Bubble Still Hasn’t Really Burst, Bestseller Edition

Ben Stein Watch: December 2, 2007

Ben Stein pops up in a lot of places: Yahoo columns, Fortune videos, scientifically-illiterate movies, brain-dead TV shows, even Portfolio features. One place he doesn’t seem to have much presence, however, is the UK. Which is just as well, because … Continue reading

Posted in ben stein watch | Comments Off on Ben Stein Watch: December 2, 2007