Monthly Archives: August 2008

The Sad Anonymity of a Risk Professional

Posted on August 11, 2008 by Felix

The anonymous confessions of a risk manager in this week’s Economist are well worth reading: The focus of our risk management was on the loan portfolio and classic market risk. Loans were illiquid and accounted for on an accrual basis … Continue reading →

Posted in banking | Comments Off

Distressed Trades of the Day

Posted on August 11, 2008 by Felix

For the best part of a year now I’ve heard buy-siders talk about how there are great opportunities in the debt markets if you know what you’re doing. I’ve generally assumed that these people have lost money on most of … Continue reading →

Posted in bonds and loans, hedge funds | Comments Off

Fortress Gets a New Principal

Posted on August 11, 2008 by Felix

Hedge funds can be extremely good at making their founders extremely wealthy. But that can be a problem, too: a star trader at a hedge fund knows that if he wants the real dynastic wealth, he’ll have to start up … Continue reading →

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MBIA Turns Thuggish

Posted on August 11, 2008 by Felix

When it comes to the monolines, I’ve had quite a lot of sympathy for MBIA in general and for its CEO Jay Brown in particular. But if he carries on like this, that sympathy won’t last long: MBIA Inc. said … Continue reading →

Posted in insurance | Comments Off

Oil Datapoints of the Day

Posted on August 11, 2008 by Felix

Krishna Guha: At today’s prices the value of oil in the ground exceeds the combined value of all the world’s equity and debt markets. Oil-importing nations are paying oil-exporting nations roughly $1,500bn per annum for oil – about 2.5 per … Continue reading →

Posted in commodities, economics | Comments Off

UBS Private Banking Inflows Cease

Posted on August 11, 2008 by Felix

I’m utterly unsurprised at this; if anything, I’d’ve expected the scale of withdrawals to be much bigger. UBS AG, the world’s biggest money manager for the wealthy, may report tomorrow that private-banking clients removed funds for the first time in … Continue reading →

Posted in banking, private banking | Comments Off

Manhattan Housing Wealth Datapoint of the Day

Posted on August 10, 2008 by Felix

Jonathan Miller takes a look at what’s happened to Manhattan apartment prices over the past three years — since, more or less, the national housing market peaked in 2005. On a year-over-year basis, it turns out, Manhattan co-ops have appreciated … Continue reading →

Posted in housing | Comments Off

Ben Stein Watch: August 10, 2008

Posted on August 10, 2008 by Felix

I hope you’re sitting down for this one: Ben Stein has written a perfectly good column this week. It’s about fiscal responsibility: he says that the US needs to raise taxes, not cut them, and that if we’re going to … Continue reading →

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Metablogging Sunday

Posted on August 9, 2008 by Felix

The war in South Ossetia is a great example of the power of blogging. On Friday, which was pretty much the day it started, Doug Muir posted a generally anti-Georgian explanation of the whole thing, while Svante Cornell posted a … Continue reading →

Posted in Not economics | 4 Comments

Great Food on the Basque Coast

Posted on August 9, 2008 by Felix

I had a little holiday last month, and discovered what might well be the greatest food city in the world: San Sebastian. Just, wow. The jamon iberico on the beach was, far and away, the greatest ham I’ve ever eaten … Continue reading →

Posted in Not economics | 1 Comment

Extra Credit, Friday Edition

Posted on August 8, 2008 by Felix

Failure has a thousand fathers: "Earlier this summer people started to distrust Libor – partly because there were rumours that contributing banks were underreporting their borrowing costs in order not to appear in trouble. Serious, if true. But it can’t … Continue reading →

Posted in remainders | Comments Off

Four Billion

Posted on August 8, 2008 by Felix

The NYT brings out the big numbers for its Olympic coverage today: At 8 p.m. on the eighth day of the eighth month in the year 2008 — eight being a lucky number in China — the world looked toward … Continue reading →

Posted in Media, statistics | Comments Off

US Shortchanges Artists

Posted on August 8, 2008 by Felix

A generation ago, "percent for art" schemes started taking off in culturally-enlightened parts of the world. The idea is that when a new public (or even private) building is constructed, 1% of the budget should be used to fund and … Continue reading →

Posted in art | Comments Off

Who’s Gaining from Volatility?

Posted on August 8, 2008 by Felix

Most hedge funds had a hard time in July, losing twice as much money, on average, as someone invested in the S&P 500. It seems that a lot of people were rushing in to the short-financials trade, and got massively … Continue reading →

Posted in banking, hedge funds | Comments Off

The Low-Water Lifestyle

Posted on August 8, 2008 by Felix

Andrew Leonard is surprised to find that his Berkeley lifestyle isn’t water-intensive enough to qualify him for water rationing: When I examined my drought advisory notice a little more closely I noticed something I’d missed before: "Residential customer accounts that … Continue reading →

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A Fun Train of Thought

Posted on August 8, 2008 by Felix

I’m heartened by Christopher Conkey’s piece in the WSJ today saying that Amtrak is getting more financial and political support than ever. And about time too! My imagination was also sparked by a stray metonym: One measure of progress will … Continue reading →

Posted in cities, travel | Comments Off

Please, Mr Greenspan, Shut Up

Posted on August 8, 2008 by Felix

If ever there was a need for gag orders on former central bank chairmen, it is now. Actually, scrap that: if ever thre was a need for a gag order on Alan Greenspan, it is now. The rest of them … Continue reading →

Posted in fiscal and monetary policy | Comments Off

Chinese iPod Datapoint of the Day

Posted on August 8, 2008 by Felix

From Robert Koopman, Zhi Wang, and Shang-Jin Wei: In trade statistics, the Chinese export value for a unit of a 30GB video model in 2006 was about $150. However, Linden, Kraemer, and Dedrick (2007) estimated the value added attributable to … Continue reading →

Posted in china | Comments Off

Footnote of the Day

Posted on August 8, 2008 by Felix

As cited by Z (a/k/a Olivier Fouquet), a commenter at Crooked Timber: In fact, almost all non trivial results of […] can be put in the following tripartite classification: (a) Results for which a (sound) reference is given, but of … Continue reading →

Posted in education | Comments Off

Are Banks Systematically Evicting Renters?

Posted on August 8, 2008 by Felix

The Washington Post, this morning, fronts a story about the troubles facing renters when their landlords are foreclosed upon. It’s much longer on anecdote than it is on data, but even so it puzzles me. The clear feeling one gets … Continue reading →

Posted in housing | Comments Off

Willumstad’s Hard Choice

Posted on August 8, 2008 by Felix

AIG’s earnings yesterday were horrible, no doubt about it, and the stock market meted out condign punishment: American International Group Inc., the biggest U.S. insurer by assets, fell the most since going public in 1969 after writing down more than … Continue reading →

Posted in insurance | Comments Off

On Risk Aversion

Posted on August 8, 2008 by Felix

I’ve been thinking a bit more about the downside of risk aversion, which is something that Steve Waldman brought up yesterday and which I then applied to the ARS fiasco, among other things. The problem is that it’s entirely natural, … Continue reading →

Posted in economics, investing | Comments Off

Extra Credit, Thursday Edition

Posted on August 7, 2008 by Felix

Information and energy: "On any plausible estimate of the properties of demand, the benefits of ever-cheaper and more plentiful information will far outweigh the costs of less carbon-intensive energy." Stephen Schwarzman’s Smart Hedge-Fund Acquisition: It’s GSO. And he paid in … Continue reading →

Posted in remainders | Comments Off

When Safety is Worse Than Risk

Posted on August 7, 2008 by Felix

Steve Waldman has a corker of a blog entry today, blaming a large part of the present crisis on "investors’ childlike demand for safety". It’s a very powerful insight. Think of the enormous emerging-market central bank reserves that everyone was … Continue reading →

Posted in economics, investing | Comments Off

Detroit: Tow Ridiculous

Posted on August 7, 2008 by Felix

Fuel-economy standards are a good idea because they prevent automobile manufacturers from gaming the system. If everybody is forced to make fuel-efficient cars, there’s a level playing field; if it’s left up to market forces, then everybody tends to wait … Continue reading →

Posted in climate change | Comments Off

Monthly Archives: August 2008

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