Monthly Archives: March 2008

Misleading Chart of the Day: Credit Premia

Posted on March 12, 2008 by Felix

Martin Wolf appends this chart to his most recent column. It shows the well-known-by-now interbank spread – the way that Libor has gapped out relative to central bank rates – and tries to decompose it into two parts: a credit … Continue reading →

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US Default Risk Soaring

Posted on March 12, 2008 by Felix

Shorting subprime? That was a good idea. Or shorting agencies, or any other credit product, for that matter. But shorting US Treasuries in July? That, surely, would have been pretty disastrous. Unless, that is, you went short not directly, but … Continue reading →

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Extra Credit, Wednesday Edition

Posted on March 11, 2008 by Felix

Just think, the fees you could charge Buffett: "Over a sufficiently long time horizon, your investment manager will become richer than you". Will It Work This Time? "By my count, this is the ninth time since August that the Fed … Continue reading →

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Stock Volatility Datapoint of the Day, Part 2

Posted on March 11, 2008 by Felix

You might have noticed some large moves in the stock market today: the Dow rose over 400 points. Is this an Important Event, or is it just market noise? Commenter Danw thinks it’s the former, telling me that I am … Continue reading →

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CDOs and SIVs in a Legal Shambles

Posted on March 11, 2008 by Felix

Arturo Cifuentes says that it’s not just the bankers and the ratings agencies who bollixed up the alphabet soup of debt products which are now imploding. It’s the lawyers, too: More than 100 collateralised debt obligations (CDOs) and structured investment … Continue reading →

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Stock Volatility Datapoint of the Day

Posted on March 11, 2008 by Felix

Bear Stearns stock today has traded between a high of $68.24 (before the Fed’s new facility was announced) and a low of $55.42. That’s an intraday move of $12.82 per share, or more than 23% of Bear’s value at its … Continue reading →

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Chart of the Day: Microfinance Fund Performance

Posted on March 11, 2008 by Felix

If you invest your money in microfinance funds, you’re doing good. But are you doing well? The World Bank seeks to answer that question today, by releasing the first performance figures on how microfinance investment funds are doing. And it … Continue reading →

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TSLF: TAF for Investment Banks

Posted on March 11, 2008 by Felix

So you still want to know the difference between the TAF and the TSLF? Over at Interfluidity, "livingstone guy" explains: The new repo line you talk about is nothing more than the TAF for the brokers who dont have access … Continue reading →

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Auction-Rate Securities: No Danger to Silicon Valley

Posted on March 11, 2008 by Felix

It’s like Telephone (Chinese Whispers) in the blogosphere today. First there’s a sober report on Venture Wire warning that "cracks of the economy" might affect the VC industry: Perkins said VCs need to be aware of the "cracks of the … Continue reading →

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Spitzer’s Resignation Odds

Posted on March 11, 2008 by Felix

The SPITZER.RESIGN.MAR08 contract at InTrade has been trading between 80 and 90 today, with the last trade at 85: essentially, the market is saying that there’s a 15% probability he won’t resign by the end of the month. Obviously, there … Continue reading →

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Vikram Pandit Forced to Bail Out His Own Unit

Posted on March 11, 2008 by Felix

How great of an executive is Citigroup’s Vikram Pandit? Well, he’s good at making a lot of money: he sold his young hedge-fund shop, Old Lane Partners, to Citi for something north of $600 million. Old Lane was then incorporated … Continue reading →

Posted in banking | 1 Comment

The NYPL Respects Schwarzman’s Stature

Posted on March 11, 2008 by Felix

I’m working today out of what I sometimes call my "midtown office" – the magnificent reading room on the top floor of the New York Public Library on Fifth Avenue and 42nd Street. Which will soon be called the Stephen … Continue reading →

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Bernanke Invents a New Weapon

Posted on March 11, 2008 by Felix

Do you know your TAF from your TSLF? Frankly, it doesn’t matter if you don’t. Think of Ben Bernanke as action hero: every time the credit markets seize up and threaten to bring down the US financial system, he pulls … Continue reading →

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Pastorini/Niren/Roxford Convicted of Fraud

Posted on March 11, 2008 by Felix

I love this story: Theodore Roxford, accused by U.S. regulators of making bogus bids for companies including Sony Corp., was ordered to pay $900,000 by a judge, who also denied the Canadian man’s request for “execution by firing squad.” I … Continue reading →

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SocGen gets its New Equity Capital with Ease

Posted on March 11, 2008 by Felix

The €5.5 billion SocGen rights offering has received more than €10 billion in demand, putting to rest any doubt about the bank’s ability to survive the Kerviel crisis – and also proving that banks have more options than simply running … Continue reading →

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CDOs: Dead. CLOs? Not So Much

Posted on March 11, 2008 by Felix

Vipal Monga takes a look at the CDO and CLO markets, and asks: are they really dead? Or just taking a breather? He draws the conclusion that they’re very different animals. CLOs, he says, are crucial to the loan market: … Continue reading →

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Extra Credit, Tuesday Edition

Posted on March 11, 2008 by Felix

Return of Capital: Accrued Interest on the cheapness of agency bonds. What Went Wrong…and Right: "Bumbling rubes somehow got control of major banks…and lost billions!" Your Oil Datapoint of the Day: Oil companies made $10 million last year. Per hour. … Continue reading →

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Taking Credit Card Imprints: A Key Skill for Prostitutes

Posted on March 10, 2008 by Felix

John Gapper finds the business angle in the Spitzer story: reading the official complaint, he concludes that "even this sort of business is just that – a business." My favorite bit is this: During the call, SUWAL and LEWIS discussed … Continue reading →

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Spitzer’s Legacy on Wall Street

Posted on March 10, 2008 by Felix

Andrew Leonard mourns a (former) hero: I cheered him on. He was the unexpected underdog who comes out of nowhere and starts landing one uppercut after another into the chins of a murderer’s row of 800-pound gorillas. We called him, … Continue reading →

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Stocks: Risky, But Tempting

Posted on March 10, 2008 by Felix

On Friday, I got an email from my friend James: If you had some $ to invest now, where would you put them? I’m considering going long some equities, but its a nauseating market out there… in the financials, does … Continue reading →

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Blackstone: Paying Normal Tax Rates

Posted on March 10, 2008 by Felix

Heidi Moore, liveblogging the Blackstone conference call, picks up on something interesting: Puglisi tackles taxes. Regulators, are you paying attention? Here is what he says: “While our tax rates for the full year were approximately 15% for the fourth quarters … Continue reading →

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The Negative Externalities of Index Funds

Posted on March 10, 2008 by Felix

Steve Waldman doesn’t like it when I defend passive investing. If everybody moved to a passive-investment style, he asks, then where would we be? We need active investors to make efficient markets and set prices. Passive investors, he says quite … Continue reading →

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Microfinance and Small Business: Not in Conflict

Posted on March 10, 2008 by Felix

James Surowiecki, in this week’s New Yorker, makes a strong case for supporting small and medium-sized enterprises in developing countries. He notes: In high-income countries, these companies create more than sixty per cent of all jobs, but in the developing … Continue reading →

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Blackstone Datapoint of the Day

Posted on March 10, 2008 by Felix

Blackstone’s shares fell below the $14 level earlier today, in the wake of a dreadful earnings report showing a net loss of $170 million in the fourth quarter. At $14 a share, it’s worth remembering, it would take a rise … Continue reading →

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Please, China, Sell Your Treasury Notes!

Posted on March 10, 2008 by Felix

One more post on Krugman, if I may, and then I’ll move on. Check out the chart he reproduced on Saturday: it looks very much like it comes from the Economist, but I can’t find the specific article. In any … Continue reading →

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