Monthly Archives: April 2008

When the Fed Gave Up on Bear Stearns

Posted on April 15, 2008 by Felix

If you have a few minutes to spare, it’s worth reading the official background to the JP Morgan – Bear Stearns merger, as filed with the SEC. The bit which jumps out at me is that after throwing Bear a … Continue reading →

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Spinning Deutsche’s Loan Sale

Posted on April 15, 2008 by Felix

I’m having something of a Rashomon moment with respect to Deutsche Bank’s sale of leveraged loans. Dana Cimilluca and Peter Lattman, in the WSJ, say that the mooted sale by Deutsche Bank "could bolster its own health as well as … Continue reading →

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Private Equity Debt Buybacks: A Second Bite at the Cherry?

Posted on April 15, 2008 by Felix

Here’s one for Dear John Thain or anybody else wondering about what happens when a private-equity shop buys the debt of its own portfolio companies. Let’s say that the portfolio company in question goes bankrupt, and is taken over by … Continue reading →

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Extra Credit, Monday Edition

Posted on April 14, 2008 by Felix

HELOC Nonsense: Tanta on how HELOCs work in the real world. The Muffie Benson-Perella Show: Fox Business invites a fictional character onto their 5pm show. Spiers, Cox Get New Titles For Same Jobs: A first, I’m pretty sure: a reasonably … Continue reading →

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Iceland: Victimized by its Tiny Currency

Posted on April 14, 2008 by Felix

Jim Surowiecki has a good piece on Iceland this week. "When we look at Iceland’s predicament," he says, "we should say that there but for the grace of China go we." It’s a good point. If Iceland risks becoming the … Continue reading →

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Blogonomics: Selling Wonkette

Posted on April 14, 2008 by Felix

Wonkette has been sold, to its managing editor, Ken Layne. In the memo, Nick Denton explains that Gawker Media just wasn’t very good at selling political ads. "Political advertisers are a strange breed; they don’t come through the same agencies … Continue reading →

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Recession: What can the President do?

Posted on April 14, 2008 by Felix

Paul Krugman and Jesse Eisinger both have new columns out today, and they’re remarkably similar, dealing as they do with what, if anything, the next president is going to be able to do about the economic malaise facing the USA. … Continue reading →

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The Problem With Private Equity Buying Leveraged Loans

Posted on April 14, 2008 by Felix

Remember how those private-equity companies are buying back a bunch of their own debt at 90 cents on the dollar? Well, if it’s literally their own debt, rather than simply a bunch of leveraged loans in general, then Equity Private … Continue reading →

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Bidding Sotheby’s Down

Posted on April 14, 2008 by Felix

Robert Frank is worried about the accounts receivable at Sotheby’s, which more than doubled to $835 million in 2007. This means that the "clients of Sotheby’s appear to be falling behind on their bills," he says – which could be … Continue reading →

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Buffett Caves

Posted on April 14, 2008 by Felix

Well, that didn’t take long. A week ago the WSJ reported that Federal prosecutors were requesting the resignation of General Re CEO Joe Brandon; today it happened, despite Brandon’s having the strong support of his boss, Warren Buffett. I don’t … Continue reading →

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Neutra Houses for Sale

Posted on April 14, 2008 by Felix

Arts blogger extraordinaire Tyler Green has a piece in the May issue of Portfolio on Richard Neutra’s Kaufmann House, which is being sold by Christie’s with an estimate of $15 million to $25 million; I blogged the house myself, back … Continue reading →

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Ngozi Okonjo-Iweala is Brilliant

Posted on April 14, 2008 by Felix

It’s the Brilliant issue of Portfolio this month, and under "Game Changers" one finds a lot of big-deal CEOs: Rupert Murdoch, Jamie Dimon, Lloyd Blankfein, Ratan Tata. And right there next to them is Ngozi Okonjo-Iweala. I went down to … Continue reading →

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Why Wachovia Needs Another $7 Billion

Posted on April 14, 2008 by Felix

Why does Wachovia need another $7 billion of equity capital, on top of the $8.3 billion it raised earlier this year? It’s not like its capital ratios are particularly gruesome: as of March 31, its Tier 1 capital ratio was … Continue reading →

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Ben Stein Watch: April 13, 2008

Posted on April 13, 2008 by Felix

Ben Stein has a lot of money invested in the stock market, and tends to think of the stock market as a proxy for financial markets as a whole. So last summer, when the credit crunch first hit, he was … Continue reading →

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Frontier Airlines, The Latest Credit Card Victim

Posted on April 11, 2008 by Felix

I’m well aware that there’s no such thing as a free lunch. But some things come close, at least to the untrained eye, and one of them is the insurance that you get whenever you buy something on a credit … Continue reading →

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Annals of Stupid Philanthropy, BB&T Edition

Posted on April 11, 2008 by Felix

What is it with ill-advised million-dollar charitable donations by banks? First of course there was Citigroup giving $1 million to the 92nd Street Y so that Jack Grubman’s twin girls could get into the preschool there. And now, well, I’ll … Continue reading →

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Parsing the Global Recession

Posted on April 11, 2008 by Felix

We all know what a recession is: two consecutive quarters of negative growth. Easy. So a global recession, that’s the same thing, but on a global level, right? Actually, no. Recessions happen, in all countries, but they don’t happen in … Continue reading →

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Extra Credit, Friday Edition

Posted on April 11, 2008 by Felix

July 2008 LHC End of the Universe Puts I Have the Best Job in the World: Berkeley coffee shops really do have more interesting conversations. Lehman Deal: ‘Creative’ Financing Rides Again In times of complexity, common sense must prevail: John … Continue reading →

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Does the World Need Rich Venture Capitalists?

Posted on April 11, 2008 by Felix

Fred Wilson’s blog entry about "a new path to liquidity" has resulted in a spectacular outpouring of very high-level comments, as well as responses from other bloggers such as Roger Ehrenberg. But I’m not at all convinced that there’s really … Continue reading →

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Judging GDP

Posted on April 11, 2008 by Felix

Justin Fox defends GDP as a useful indicator: Over the years, GNP and GDP have proved spectacularly useful in tracking economic change–both short-term fluctuations and long-run growth… The issue with alternative benchmarks is not whether they have merit (most do) … Continue reading →

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WSJ and FT Buck the Newspaper Trend

Posted on April 11, 2008 by Felix

These are desperate times for the newspaper industry, and they’re not much better in the world of finance. So it’s interesting to see Jeff Bercovici and Jon Fine lauding impressive growth at the WSJ and the FT respectively. Is this … Continue reading →

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Bankruptcies: Still Rare

Posted on April 11, 2008 by Felix

I’m signed up to the WSJ’s email alert service, which sent me a couple of messages last night. At 12:14 am there was this: WSJ NEWS ALERT: Linens ‘n Things Is Expected to File For Chapter 11 And at 2:19 … Continue reading →

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Blogonomics: Seeking Alpha Plays the Ultimatum Game

Posted on April 11, 2008 by Felix

The Ultimatum Game, in game theory, has two players. It’s very simple: The first player proposes how to divide a sum of money between themselves, and the second player can either accept or reject this proposal. If the second player … Continue reading →

Posted in blogonomics | 1 Comment

Extra Credit, Thursday Edition

Posted on April 10, 2008 by Felix

You can’t spell "subprime" without "UBS" Diamonds are forever: A nicely contrarian take on the concept of "blood diamonds". Greenspan: "This is really quite unfair": Greenspan never really retracted his statement recommending ARMs. Beware the ninja Prius

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

The Yahoo Yawn

Posted on April 10, 2008 by Felix

With all the news about Yahoo that emerged after the market closed yesterday – Google! Microsoft! AOL! Murdoch! – the stock today erupted in a frenzy of highly volatile trading, closing well above Microsoft’s offer price. Or, you know, it … Continue reading →

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