Monthly Archives: March 2008

Blogonomics: Setting the Agenda

Posted on March 10, 2008 by Felix

Remember the Tim Geithner speech last week? The wires covered it, dutifully enough, but it didn’t get much traction beyond that, outside the wonkier end of the econoblogosphere. What makes me very happy, however, is that the wonkier end of … Continue reading →

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Jay Brown, Blog Commenter

Posted on March 10, 2008 by Felix

Remember how I liked the way that new MBIA CEO Jay Brown writes letters? Well he’s gone one better now, and actually started leaving comments on blogs – or at least a comment on Floyd Norris’s blog. Norris didn’t like … Continue reading →

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Blogonomics: Gawker’s Payroll

Posted on March 9, 2008 by Felix

Jay Rayner has a profile of Nick Denton in the UK Observer, in which we find some interesting numbers: In January, New York-based Gawker Media racked up nearly a quarter of a billion page views… The monthly salary is an … Continue reading →

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Active Investing Datapoint of the Day

Posted on March 9, 2008 by Felix

The cost of active investing: $100 billion per year, according to Kenneth French at Dartmouth University. That’s up from just $7 billion in 1980, you can see why Wall Street has made so much money in the interim. In his … Continue reading →

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Why the Fed’s Interventions Aren’t Working

Posted on March 8, 2008 by Felix

If you’re a bank and you need to shore up your capital base, you have the option of raising new equity, by selling shares to the public or to your friendly local sovereign wealth fund. There are other options, too. … Continue reading →

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Extra Credit, Weekend Edition

Posted on March 8, 2008 by Felix

WaMu rewrites execs’ bonus plan to dodge subprime damage Remember the Alamo: The Epicurean Dealmaker on Carlyle Capital. Download Whitney Tilson’s slide show "Why We Are Still in the Early Innings of the Bursting of the Housing and Credit Bubbles".

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A Market Movers Milestone

Posted on March 8, 2008 by Felix

As I approach the end of my first year at Portfolio.com, I’ve now officially posted my 2,000th blog entry here. (In fact, they weren’t all mine: many thanks to Yves Smith for pinch-hitting for a few weeks last summer.) In … Continue reading →

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Should the Government Partially Refinance Mortgages?

Posted on March 7, 2008 by Felix

Martin Feldstein has a bright idea: allow homeowners to refinance 20% of their mortgage balances with the government, where the new loans amortize over 15 years and reset every two years at the interest rate on 2-year Treasury bonds (currently … Continue reading →

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Did Lloyd Blankfein Earn $100 Million in 2007?

Posted on March 7, 2008 by Felix

There’s a bit of buzz today over Goldman Sachs’s 2007 executive pay packages. It’s all a bit confusing: do you include previous years’ stock grants? How do you account for options? If you add up stock awards and options awards … Continue reading →

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Google vs Microsoft: Can You Tell the Difference?

Posted on March 7, 2008 by Felix

Are Google and/or Microsoft interested in buying Digg? We don’t know: Google and Microsoft both declined to comment on whether they are interested in Digg, issuing identical statements that they do not address "rumors or speculation." Identical, you say? I … Continue reading →

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Shipping Datapoint of the Day

Posted on March 7, 2008 by Felix

Scott Borgerson, in Foreign Affairs: Taking into account canal fees, fuel costs, and other variables that determine freight rates, these shortcuts [through the Arctic Ocean] could cut the cost of a single voyage by a large container ship by as … Continue reading →

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The WSJ’s New Magazine: An Obvious Money-Spinner

Posted on March 7, 2008 by Felix

Irin Carmon today gets some hard facts about the WSJ’s new glossy magazine. WSJ.’s circulation of 800,000 will be targeted to the 15 largest metro markets, including subscribers with a median household income of $300,000 (15 percent higher than the … Continue reading →

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CDS: It’s Not About Credit

Posted on March 7, 2008 by Felix

The FT has an excellent article explaining that corporate issuers are now being able to price new bonds off their illiquid secondary-market bond curves, rather than off their (wider) CDS curves. If you have real corporations borrowing real new money … Continue reading →

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Meme of the Day: 50% Housing Equity

Posted on March 7, 2008 by Felix

Mark Stein picked up on it yesterday; the WSJ splashes it across the front page today; Whitney Tilson has included it in his 75-page slide show entitled "Why We Are Still in the Early Innings of the Bursting of the … Continue reading →

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Credit Market Quote of the Day

Posted on March 7, 2008 by Felix

An anonymous London credit hedge fund manager, quoted in the FT: "Every time you buy anything it is worth less the next day. Eventually you stop buying." In theory, hedge funds, with their cash lock-ups and their higher risk appetites, … Continue reading →

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Payrolls: Even More Bearish Than the Headline

Posted on March 7, 2008 by Felix

I’m not a big fan of the monthly payrolls report, which has a 90% confidence interval "on the order of plus or minus 430,000". Payrolls fell by 63,000 in February – something which I’m sure is going to be treated … Continue reading →

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Extra Credit, Friday Edition

Posted on March 7, 2008 by Felix

Municipal Bonds: Yeeeeaaaaahooooooo! "Smith Barney, Citigroup’s retail brokerage arm, supposedly had the best day for selling municipal bonds in their entire history on Monday. One large dealer I talk to regularly said they had sold every bond in their inventory … Continue reading →

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Merrill’s Financing Strategy: Harming Shareholders

Posted on March 6, 2008 by Felix

A bank issues a bond, which has a maturity date. When the bond matures, the bank needs to essentially roll over the debt: it issues a new bond for the same amount of money, at (these days) a higher interest … Continue reading →

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Richard Bitner, Teller of Subprime Tales

Posted on March 6, 2008 by Felix

I’ve been meaning for a while now to link to Richard Bitner, a former subprime mortgage broker who has published a very readable book entitled "Greed, Fraud & Ignorance: A Subprime Insider’s Look at the Mortgage Collapse". Here’s a taster: … Continue reading →

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BRICs: Over Half of the Top 25 Billionaires

Posted on March 6, 2008 by Felix

Forbes has released its 2008 ranking of the world’s billionaires; it now takes $19.3 billion to crack the top 25. What jumps out at me? Indians account for four of the top ten; Russians account for seven of the top … Continue reading →

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Fannie Mae Datapoint of the Day

Posted on March 6, 2008 by Felix

Fannie Mae’s credit default swaps are trading over 200bp, despite their implicit government guarantee. Writing protection at these levels seems like a no-brainer to me: even if there is an event of default, recovery is going to be very close … Continue reading →

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Tim Geithner on the Financial Crisis: A Mock Interview

Posted on March 6, 2008 by Felix

I popped uptown this afternoon, to the Council on Foreign Relations, to hear NY Fed president Tim Geithner give a big speech on the current financial crisis. Geithner is the central banker closest to the markets, but he’s been pretty … Continue reading →

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Search Engine Capitulation of the Day

Posted on March 6, 2008 by Felix

When I first saw this over at Aaron Schiff’s, I thought it must have come from the Onion. But no, it’s for real: In a dramatic about-face, Ask.com is abandoning its effort to outshine Internet search leader Google Inc. and … Continue reading →

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Retail Sales and the Weather

Posted on March 6, 2008 by Felix

Parija Kavilanz is excited about retail sales reports: A surprising rebound in February sales gave retailers a much-needed respite after a very difficult winter sales season that had pointed convincingly to a pullback in consumer spending. "It’s very interesting that … Continue reading →

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How Lahde Capital Makes Money

Posted on March 6, 2008 by Felix

Sam Jones has Lahde Capital’s month-by-month performance results for 2007. The flagship real-estate fund, which has already been wound up, returned 870% over the course of the year, which implies that it went up in value by more than 77% … Continue reading →

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