Monthly Archives: February 2008

When the Markets are Wrong

Posted on February 19, 2008 by Felix

The markets don’t always make any sense, and this headline from Bloomberg gives a prime example: Northern Rock Credit-Default Swaps Rise on Nationalization Yes, in the wake of the news that the Northern Rock was going to be owned by … Continue reading →

Posted in derivatives | Comments Off on When the Markets are Wrong

Did Black-Scholes Cause the Housing Bubble?

Posted on February 19, 2008 by Felix

Michael Lewis gets his nerd on in the March issue of Portfolio, wading into the Taleb vs Black-Scholes debate. But he actually seems to go even further than Taleb. Think of three levels of skepticism when it comes to the … Continue reading →

Posted in derivatives | Comments Off on Did Black-Scholes Cause the Housing Bubble?

This Is Financial Meltdown

Posted on February 19, 2008 by Felix

Nouriel Roubini: The numbers all go to eleven. Look, right across the board, eleven, eleven, eleven and… Larry Summers: Oh, I see. And most blogs go up to ten? Nouriel Roubini: Exactly. Larry Summers: Does that mean it’s grimmer? Is … Continue reading →

Posted in economics | Comments Off on This Is Financial Meltdown

News Corp’s Cutest Board Member

Posted on February 19, 2008 by Felix

"I’m not just some idiotic girl in piggytails yodeling," says Natalie Bancroft in an interview for the March issue of Portfolio, who was photographed by João Canziani. "I’m working my little butt off." The daughter of Joyce Bancroft, a Dutch-Brazilian … Continue reading →

Posted in governance, Media, publishing | Comments Off on News Corp’s Cutest Board Member

The End of the Monolines

Posted on February 19, 2008 by Felix

It looks like the end of the monolines to me. FGIC has already said it’s splitting – something which, legally, is fraught at best. Ambac is trying to raise $2 billion in new equity before, yes, splitting. And now MBIA … Continue reading →

Posted in defenestrations, insurance | Comments Off on The End of the Monolines

Should the US Government Buy Distressed Bonds?

Posted on February 19, 2008 by Felix

The Federal reserve, and the Federal Home Loan Banks, and Fannie Mae, and Freddie Mac, between them, have injected a huge amount of liquidity into the banking system during this credit crunch. But it’s been done in a reactive manner, … Continue reading →

Posted in fiscal and monetary policy | Comments Off on Should the US Government Buy Distressed Bonds?

The Credit Suisse Writedown: Less Than Meets the Eye

Posted on February 19, 2008 by Felix

Credit Suisse has $34 billion in CMBS, RMBS and CDO exposures. Or, hang on a minute, cut that by $2.85 billion: apparently there were some "mismarkings" going on. There seems to be a lot of people who are very shocked … Continue reading →

Posted in banking, bonds and loans | Comments Off on The Credit Suisse Writedown: Less Than Meets the Eye

Hedge Fund Datapoint of the Day

Posted on February 19, 2008 by Felix

The WSJ reports on Alan Howard: His firm is blossoming, soaring from $12.5 billion at the beginning of 2007 to become one of the largest hedge funds in the world. The article is illustrated with a hedcut of George Soros, … Continue reading →

Posted in hedge funds | Comments Off on Hedge Fund Datapoint of the Day

Extra Credit, Tuesday Edition

Posted on February 19, 2008 by Felix

The proviso on a carbon tax – determining the price of carbon – is a show stopper Credit markets beware: CPDOs on the cusp of forced deleveraging: I love it when Sam Jones gets his nerd on. China Mobile: 400,000 … Continue reading →

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

Misleading Chart of the Day, CDS Edition

Posted on February 18, 2008 by Felix

This graphic comes from Gretchen Morgenson’s front-pager in the NYT yesterday. I’m not going to try to reproduce it here, because my column width isn’t big enough to really see what’s going on. But suffice to say that it shows … Continue reading →

Posted in charts, derivatives | Comments Off on Misleading Chart of the Day, CDS Edition

Manhattan Real Estate Datapoint of the Day

Posted on February 17, 2008 by Felix

Josh Barbanel reports: So far this year, 13 co-ops worth $20 million or more had closed or were in contract, compared with only 11 completed sales in that price range for all of last year. Note this is co-ops, not … Continue reading →

Posted in housing | Comments Off on Manhattan Real Estate Datapoint of the Day

Northern Rock: Nationalized

Posted on February 17, 2008 by Felix

Northern Rock will be nationalized, and the FT says that There Will Be Grumbling: The government believes nationalisation is now the best option, even though it is likely to spark a political storm, an angry reaction from some shareholders and … Continue reading →

Posted in banking | Comments Off on Northern Rock: Nationalized

Zimbabwean Dollar Website of the Day

Posted on February 17, 2008 by Felix

It gives me great pleasure to announce that Market Movers has nabbed itself 11,000 valuable pixels on the Million Zimbabwean Dollar Homepage, for the bargain price of just $0.41, plus a $0.35 paypal fee. From the FAQ: 8. How long … Continue reading →

Posted in emerging markets, foreign exchange | Comments Off on Zimbabwean Dollar Website of the Day

John Adams: Encore!

Posted on February 17, 2008 by Felix

Last year, I extolled the virtues of listening to new-music pieces more than once. Yesterday, I went to Carnegie Hall to hear the new Doctor Atomic Symphony by John Adams, and it was wonderful; but it was also very dense … Continue reading →

Posted in Not economics | 5 Comments

Extra Credit, Weekend Edition

Posted on February 16, 2008 by Felix

Citigroup Leveraged Fund Falls Amid Bond Market’s Volatility: Falls by 52% in one quarter, to be precise. Who wants a recession: More people than you might think. McCain and Obama Skirmish on Financing: It’s possible we might yet have a … Continue reading →

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

Peter Orszag, Optimist

Posted on February 15, 2008 by Felix

I wasn’t too surprised to learn that Ben Bernanke is an optimist. But Peter Orszag too? The director of the CBO always seems pretty downbeat to me. Yet today, releasing an updated economic forecast, he says that "CBO’s projections do … Continue reading →

Posted in economics | Comments Off on Peter Orszag, Optimist

The Microsoft-Yahoo Merger-Arb Plays

Posted on February 15, 2008 by Felix

The New York Post says that Yahoo’s board is splitting into factions, with one group taking its fiduciary duties seriously, and the other, more emotional, group supporting CEO Jerry Yang’s attempts to rebuff the Microsoft takeover bid. It also reports … Continue reading →

Posted in stocks, technology | 1 Comment

The Magic of Pricing Conventions

Posted on February 15, 2008 by Felix

A banker makes a $10 million loan to a client at an interest rate of 10%. He then turns around and securitizes the loan, selling it to bond investors at an interest rate of 10%. Does that sound like a … Continue reading →

Posted in bonds and loans | Comments Off on The Magic of Pricing Conventions

Don’t Bank on Loan Deals

Posted on February 15, 2008 by Felix

Front-page stories in the WSJ and FT: two great tastes which go great together! First there’s David Enrich in the WSJ, talking about a Citigroup hedge fund named CSO Partners, which contracted to buy a bunch of loans and then … Continue reading →

Posted in banking, bonds and loans | Comments Off on Don’t Bank on Loan Deals

The Idiocy of Reporting Auction Hammer Prices

Posted on February 15, 2008 by Felix

First the NYT, now Bloomberg – what is going on with art auction reporting? Bloomberg’s headline on the (RED) auction today is just plain wrong: "Hirst Cabinet Fetches $6.2 Million for Bono AIDS Sale". The story quotes lots of information … Continue reading →

Posted in art | Comments Off on The Idiocy of Reporting Auction Hammer Prices

Subprime Lawsuits: The Lerach Connection

Posted on February 15, 2008 by Felix

Remember those subprime class-action suits? Well now Navigant Consulting has put together another league table – not of the most-sued companies but rather of the law firms filing the most suits. Amir Efrati has the lowdown: Wannabe securities class-actions brought … Continue reading →

Posted in law | Comments Off on Subprime Lawsuits: The Lerach Connection

Monolines: The Spitzer Debate

Posted on February 15, 2008 by Felix

Eliot Spitzer, having fought and won his battle with investment banks when he was New York’s attorney general, has now set his sights on the monolines. There are two diametrically opposed ways of looking at what’s going on, which is … Continue reading →

Posted in insurance | 6 Comments

Damien Hirst Datapoint of the Day

Posted on February 15, 2008 by Felix

At the (RED) auction last night, eight works by Damien Hirst were sold – if you include the one he gave to Banksy to deface. Between them, they sold for $20,955,000 – call it half of the $42,584,300 that the … Continue reading →

Posted in art | Comments Off on Damien Hirst Datapoint of the Day

Extra Credit, Friday Edition

Posted on February 15, 2008 by Felix

Privately Public: Equity Private on public investment banks. McCain takes aim: At Obama. In defence of the investment bankers: John Gapper doesn’t think much of regulating bankers’ pay. College a waste of time and money for kids Online Ad Spend … Continue reading →

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

Blogonomics: The Techdirt Model for Monetizing Content

Posted on February 14, 2008 by Felix

I managed to grab a few minutes at the Money:Tech conference to talk to Mike Masnick about his company, Techdirt, and specifically the Techdirt Insight Community. What he said intrigued and excited me: it seemed like a fantastic way for … Continue reading →

Posted in blogonomics | 1 Comment