Monthly Archives: April 2008

Buying Bonds in the Expectation of Technical Default

Posted on April 3, 2008 by Felix

I’m at the Harvard Club today, for a Debtwire conference on distressed debt. The editor of Debtwire, Matt Wirz, just mentioned something very interesting, which he says he’s never seen before: traders and speculators are deciding to buy leveraged loans … Continue reading →

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Extra Credit, Thursday Edition

Posted on April 3, 2008 by Felix

Are we having the right discussion about the financial crisis? Ricardo Hausmann says that if regulations had been tighter, growth would have been lower, meaning real interest rates would have been lower, leading to just as much bad lending. Playing … Continue reading →

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

The Capital Infusion League Table

Posted on April 2, 2008 by Felix

This probably looks really good on a Bloomberg screen, but the formatting is all screwy online. (Weirdly, the credit-loss league table looks fine.) So as a public service I’ll republish today’s league table here in a slightly easier-to-read format. Suffice … Continue reading →

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Should the Fed Buy Securities Outright?

Posted on April 2, 2008 by Felix

In a Q&A back in March, Mark Thoma proposed that the Fed should simply buy up distressed assets, rather than simply accept them as collateral: If it were my choice, If I were king of the Fed, I’d do more. … Continue reading →

Posted in fiscal and monetary policy | 1 Comment

West Texas

Posted on April 2, 2008 by Felix

On one’s first trip to Marfa, the tour of Chinati is revelatory enough that you don’t get too annoyed by the restrictions. On one’s second trip to Marfa, the fact that you’re shepherded out of Judd’s masterpiece so that you … Continue reading →

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Bill Ackman’s Brutal Target Losses

Posted on April 2, 2008 by Felix

Equity Private, guest-blogging over at Dealbreaker, has the H2 2007 reports from Pershing Square IV, the Bill Ackman hedge fund devoted to going long Target. Which hasn’t worked out so well. He lost $52,872,231 on Target stock, which is bad … Continue reading →

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Meme of the Week: Food Stamps

Posted on April 2, 2008 by Felix

See here, of course, but also here. Then there’s this, as well as all the commentary on top, in places like this and this and this – all of which apparently has given food stamps Top Buzz. Over/under on the … Continue reading →

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Could Bear Stearns Have Filed for Chapter 11 After All?

Posted on April 2, 2008 by Felix

Does Ben Bernanke know something the rest of us don’t? Here’s a little bit of today’s testimony: On March 13, Bear Stearns advised the Federal Reserve and other government agencies that its liquidity position had significantly deteriorated and that it … Continue reading →

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The Credit-Equity Chart, Revisited

Posted on April 2, 2008 by Felix

This morning I said I’d love to see a chart showing how bond spreads have evolved relative to stock prices, connected chronologically. Next thing I know, this chart arrives in my inbox courtesy of the great Matthew Turner: You start … Continue reading →

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Currency Datapoint of the Day

Posted on April 2, 2008 by Felix

Used to be, Russians loved them their greenbacks. And not any old greenbacks, either: they had to be "new bills with the watermark and large portrait". No longer. Now, they want Chinese renminbi. That’s official policy, that is.

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Grain Conundrums

Posted on April 2, 2008 by Felix

Paul Krugman wonders this morning why food prices in general, and grain prices in particular, have spiked so dramatically: Demand has been rising for a number of years; bio-fuels is a big thing, but how much bigger is it this … Continue reading →

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Chart of the Day: Credit-Equity Divergence

Posted on April 2, 2008 by Felix

Helen Thomas finds this chart in a report from Bank of America: Basically, the x-axis is stock prices while the y-axis is bond spreads. The red dots are What Was: they’re weekly datapoints from June 2002 to June 2007. The … Continue reading →

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Not Much Hope Now

Posted on April 2, 2008 by Felix

The NYT checks in to see how the much-vaunted Hope Now coalition of mortgage lenders is doing, and you probably won’t be surprised at the results: Kenneth Goodman, a homeowner in Fontana, Calif,. said he did not have a good … Continue reading →

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Extra Credit, Wednesday Edition

Posted on April 2, 2008 by Felix

Record gas prices equal record Prius sales: They’re now roughly double Ford Explorer sales. The cautionary tale of Jefferson County Alabama Going for Broke: Surowiecki on how strict bankruptcy laws hurt the economy. Economic News: A new econoblog aggregator. Yet … Continue reading →

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Felix Salmon, Stock Picker

Posted on April 1, 2008 by Felix

This is kinda funny. Some site called SocialPicks seems to have determined that I’m a stock picker, and that this post in particular constituted a sell recommendation on Lehman Brothers. Since Lehman’s gone up since then, my "All-time Return" is … Continue reading →

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Is Iceland the New Bear Stearns?

Posted on April 1, 2008 by Felix

Got some spare cash? Thought about parking it in Iceland? The currency has plunged against the dollar, which means you get more than 77 Icelandic krona to the dollar, up from 65 at the beginning of March. Meanwhile, overnight rates … Continue reading →

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Unreal Rally

Posted on April 1, 2008 by Felix

While I’ve been trying to catch up with my RSS feeds, Jeff Cane noticed that the stock market surged today, for no discernible reason. One big bank writes down $19 billion. Another shores up its capital to put to rest … Continue reading →

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Most People Will Never Understand What Happened to Bear Stearns

Posted on April 1, 2008 by Felix

I’m catching up on a lot of material from the past week and a half or so, most of which is a little stale by now. But Deborah Solomon’s NYT interview with former Treasury secretary Paul O’Neill is still very … Continue reading →

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Gold: Too Volatile to be a Safe Investment

Posted on April 1, 2008 by Felix

Eddy Elfenbein notes today that gold has dropped below $900 an ounce. Gold funds in general are suffering, with the biggest of them all, the $8.2 billion Merrill Lynch World Gold, down 10% in March. But they’re still bullish: The … Continue reading →

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Sovereign Wealth Funds: Yes, They Really Are That Big

Posted on April 1, 2008 by Felix

Bob Davis has got his hands on a leaked paper by the Milken Institute’s Christopher Balding, in which Balding claims that sovereign wealth funds might not have as much money as everybody seems to think that they have. Without seeing … Continue reading →

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Blogonomics: Valleywag’s Pay

Posted on April 1, 2008 by Felix

Jeff Bercovici has already picked up on the mini-tantrum thrown this morning by Valleywag’s Jordan Golson. Valleywag, of course, is part of Gawker Media, which pays its writers on the basis of how many pageviews they get. But that "pageview … Continue reading →

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The H1-B Fiasco, Redux

Posted on April 1, 2008 by Felix

The H-1B fiasco is back! Last year, faced with 123,480 applications in two days for a pool of just 65,000 H-1B visas, the Bureau of Citizenship and Immigration Services was forced to run a lottery to see who would get … Continue reading →

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How to Make Money from Losing Money, UBS Edition

Posted on April 1, 2008 by Felix

UBS is the latest bank to see its share price rise in the wake of an absolutely enormous write-down. The $19 billion write-down announced today almost doubles the write-downs taken since the third quarter of 2007, and, in a move … Continue reading →

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Lehman: Still Ready to Lend Megabucks

Posted on April 1, 2008 by Felix

I’m back from holiday, and it seems there’s a 218-page report I Really Ought To Read. Do I hafta? In the meantime, I note that Lehman’s hitting the markets up for cash. Obviously Lehman, like all investment banks, reckons that … Continue reading →

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