Monthly Archives: September 2008

Can Lehman Default?

Could Lehman Brothers be the first major default of the credit crisis? Portfolio.com has video of me saying yes!

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How to Think about the Social Security Trust Fund

If you want to start a heated debate among policy wonks, just ask them about the Social Security trust fund. A large contingent of people will tell you that it’s real government debt; another large contingent will tell you that … Continue reading

Posted in economics, fiscal and monetary policy | Comments Off on How to Think about the Social Security Trust Fund

Will Lehman or WaMu Default?

If there is going to be a big financial-sector default, who would it be? Justin Fox answers the question: The one everyone has been talking about is Washington Mutual, which is down another 25% so far this morning (Lehman stock … Continue reading

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What is Frannie’s Default Risk?

The FT today makes a stab at answering some of my Frannie questions, specifically the ones about whether Frannie debt is part of the USA’s national obligations. Peter Orszag thinks it should be, but the White House seems to have … Continue reading

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Lehman: The Moral Hazard Unwind

Why should Lehman’s strategy right now be run by Tim Geithner? I’m not sure, but according to Robert Teitelman that’s effectively what’s happening. Right now Lehman is still too big to fail — but if the plan announced today goes … Continue reading

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The World Trade Center: Even More Downsizing Ahead

Mike Bloomberg comes out swinging in today’s WSJ, and although his main target is the bureaucracy at the Port Authority and the Lower Manhattan Development Corporation, he doesn’t seem to mind if his blows land on Santiago Calatrava too: Today, … Continue reading

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No Good News at Lehman

There are 5,424 words in the Lehman Brothers press release today, but the general reaction in the markets seems to be that they’d much rather have action than words. An intent to sell a majority stake in Neuberger Berman? An … Continue reading

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Extra Credit, Tuesday Edition

Closed door at The Washington Post: The conflicts of interest behind that Calomiris op-ed. Shocker! Steve Jobs Blames It All on Hedge Funds: "When it comes to these rumors, Mr. Jobs isn’t beleaguered at all. I think he likes having … Continue reading

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

Blogonomics: Brand Theft

If you name your blog something generic like The Flack or The Big Picture, you can hardly be surprised or hurt if and when someone else in the infinite expanses of the blogosphere goes ahead and uses the same phrase. … Continue reading

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Bill Gross, Braggart

This kind of crowing is unseemly and counterproductive: "Our mortgage overweight and the performance of mortgages on Monday gave the Total Return fund its greatest one day relative performance (compared to our index) in its history," Bill Gross, chief investment … Continue reading

Posted in bonds and loans, investing | Comments Off on Bill Gross, Braggart

Frannie Questions

Justin Fox asks for his readers’ questions about the Frannie bailout. Since I’m in a more-questions-than-answers mood today, I’m happy to oblige: Fannie Mae and Freddie Mac are still publicly-listed companies. Does that mean they’re still owned by their shareholders, … Continue reading

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Takashi Murakami Ego Trip of the Day

Here’s the web page for the new iPod nano. There’s a couple of very hard to make out albums on the left, followed by seven recognizable ones. What’s special about the one I’ve pointed to? It’s the only one which … Continue reading

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Watching the Lehman Fireworks

I’m thinking it was maybe a good thing that I was off the grid for most of today; it meant I haven’t been able to get caught up in all the Lehman Brothers hysteria. Of course, there’s lots of speculation … Continue reading

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Can Carbon Markets Help Stop Deforestation in the Amazon?

I spent the morning at a meeting in midtown on the subject of the nascent carbon markets in Brazil. They’re tiny at the moment, and they’re likely to remain tiny — unless and until the US implements a cap-and-trade system … Continue reading

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Who Killed Frannie?

Andrew Ross Sorkin today says there’s a relatively simple reason why Fannie and Freddie were forced into conservatorship: they needed fresh capital, but Hank Paulson essentially prevented them from raising any. According to this theory, Fannie and Freddie would have … Continue reading

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Extra Credit, Monday Edition

Price % Losers: Who knew there were so many listed Fannie and Freddie equity securities? Rising unemployment: James Hamilton crunches the numbers. "I don’t see any way to slice today’s report other than to say, at least as far as … Continue reading

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Could Frannie Have Prevented the Housing Bubble?

Dean Baker is right that the failure of Fannie and Freddie was due to the incentives that being private corporations gave them to take excess risk. In the future, Fannie and Freddie can best serve their role of providing the … Continue reading

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Admirable Investors

Joe Nocera revisits Bill Miller’s ill-starred bet on Fannie and Freddie: Does this mean Mr. Miller was always overrated as an investor? I don’t have a good answer to that. I’ve always admired investors with the intestinal fortitude to buy … Continue reading

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News Datapoint of the Day

Right now, the top story at news.google.com is "Fannie, Freddie Credit-Default Swaps May Be Settled", from Bloomberg News. I’m not sure what it means when credit default swaps are the top story in the world, but I think it’s safe … Continue reading

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Lehman’s Volatility

On Friday, before the Frannie bailout was announced, Lehman Brothers closed at $16.20 a share. On Monday morning, it opened at $17.62: a healthy pop. Within an hour of the open, however, it had sunk all the way down to … Continue reading

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Asking for a Housing Bailout

File under "strange bedfellows": over the weekend, both the Observer of London and Jim Cramer published desperate calls for the government to intervene to prop up the housing market. The Observer’s is the one with the weakest logic: The financial … Continue reading

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Adventures in Tech Support, LSE Edition

And you thought your company’s tech support was bad. Just check out the London Stock Exchange’s incident communication website for this morning: At 9:15 London time, connectivity was "suspended" and no orders could be entered or deleted. Fifty minutes later, … Continue reading

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Frannie CDS Triggered

According to standard ISDA definitions, A Credit Event occurs if the Reference Entity “seeks or becomes subject to the appointment of an administrator, provisional liquidator, conservator, receiver, trustee, custodian or other similar official for it or for all or substantially … Continue reading

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Hirst: Calling the Top

Hirst ubiquity has now reached the point at which even sober-sided finance types like Nadav Manham have noticed it. Manham asks what I think, and so I’ll stick my neck out: I’m calling a top in the Hirst market. Calling … Continue reading

Posted in art | 3 Comments

In Search of Executive Economists

Richard Baldwin has forgotten his Oxford comma: I was on panel with Alan Blinder, the CEO of Boston Consulting Group and the UAE trade minister. I’m glad he did, because the vision of Blinder — or any Nobel economics laureate … Continue reading

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