Monthly Archives: October 2008

Lehman Europe and Prime Brokerage Counterparty Risk

Posted on October 31, 2008 by Felix

Euromoney has allowed free access to its November cover story on Lehman Brothers Europe for this weekend only, so go there now and read it while you can. It starts off at much the same place as John Hempton’s blog … Continue reading →

Posted in hedge funds | 1 Comment

Unsympathetic Demographic of the Day: HENRYs

Posted on October 31, 2008 by Felix

Do you pity the HENRYs ("high earners, not rich yet")? If you’re Shawn Tully you do. In an astonishing feat of reporting, he’s discovered that if you ask people whether they feel rich, especially if they work hard and have … Continue reading →

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The 50bp Lower Bound on Interest Rates

Posted on October 31, 2008 by Felix

There’s been lots of talk in recent days of the "zero bound" on the Fed funds rate — which is exactly where the Taylor Rule would put it. But the real bound might be halfway between here and there, at … Continue reading →

Posted in fiscal and monetary policy | 1 Comment

Extra Credit, Thursday Edition

Posted on October 31, 2008 by Felix

It’s time: "The Economist does not have a vote, but if it did, it would cast it for Mr Obama. We do so wholeheartedly." The £5,000bn bailout: "£5,000bn has implicitly or explicitly been made available by central banks and governments … Continue reading →

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

Blogonomics: The Cost-Benefit of Bloggers

Posted on October 31, 2008 by Felix

Thanks very much to Tyler and Brad for the kind words; I hope to be here for a while yet. But Tyler also makes an interesting point about blogonomics: Media, like new library books, are being hurt by the downturn … Continue reading →

Posted in blogonomics | 1 Comment

Chart of the Day: The Russia-Brazil Spread

Posted on October 30, 2008 by Felix

After writing about my BRIC decoupling thesis, I asked the friendly chaps at Markit if they could share with me the 5-year CDS spreads for the four countries in question. It turns out that India isn’t really much of a … Continue reading →

Posted in bonds and loans, derivatives, emerging markets | Comments Off on Chart of the Day: The Russia-Brazil Spread

The Homeownership Bubble

Posted on October 30, 2008 by Felix

The US goverment still, it seems, thinks that encouraging homeownership is a very good idea: Four former secretaries of the Department of Housing and Urban Development told a packed meeting room… that just because the financial system is flawed doesn’t … Continue reading →

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When Banks Stop Underwriting

Posted on October 30, 2008 by Felix

Citigroup and Credit Suisse are so damaged by the financial crisis, it seems, that they’ve given up underwriting loans to their biggest and most valuable corporate clients, including Nestle and Nokia. Instead, they’re linking those loans to the companies’ CDS … Continue reading →

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Economic and Financial Bad News

Posted on October 30, 2008 by Felix

If you’re one of those people who needs a negative GDP number to convince yourself that we’re in a recession, here you go. But the headline -0.3% figure isn’t the worst bit: that would be the 8.7% fall in disposable … Continue reading →

Posted in bonds and loans, economics, fiscal and monetary policy, housing, insurance | Comments Off on Economic and Financial Bad News

Extra Credit, Wednesday Edition

Posted on October 29, 2008 by Felix

Treasury, FDIC Crafting Plan to Rework Millions of Mortgages: We need a lot more detail than this before working out what to make of it. So how many hedgies did Porsche really kill? Not as many as you might think. … Continue reading →

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

Might Blackstone Go Private?

Posted on October 29, 2008 by Felix

At lunch today with Mick Weinstein of Seeking Alpha, I wondered whether Blackstone, which currently has a market capitalization of around $2 billion, might not be a takeover candidate. After all, it would be something of a jewel for many … Continue reading →

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Stock Volatility Datapoint of the Day

Posted on October 29, 2008 by Felix

We’re used to big stock-market swings in the last hour or even half-hour of trading. But the last ten minutes? The Dow was at 9,350 at 3:48; ten minutes later, it was at 8,960. That’s a drop of almost 400 … Continue reading →

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CDS: The Less You Know, The Worse They Look

Posted on October 29, 2008 by Felix

For those of you who like your CDS exposés presented in the mellow tones of Leonard Lopate and Jesse Eisinger over the course of a leisurely half-hour, here you go. This is a sober public radio progam, not a finger-pointing … Continue reading →

Posted in derivatives | Comments Off on CDS: The Less You Know, The Worse They Look

The Dollar’s Not That Strong

Posted on October 29, 2008 by Felix

While I’m throwing darts at Paul Kedrosky, I ought to mention that I also think he’s quite wrong about the dollar. He has a good line — "think of the dollar as Squealer the Pig collectible Beanie Babies circa Christmas … Continue reading →

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Why Banks Should Lend Out Treasury’s Funds

Posted on October 29, 2008 by Felix

Paul Kedrosky has a peculiar argument today, saying that banks shouldn’t lend the money they’re getting from Treasury: Banks are looking at a changed world, one with deleveraging everything, consolidation happening apace, and defaults almost certain to rise rapidly over … Continue reading →

Posted in bailouts, banking | Comments Off on Why Banks Should Lend Out Treasury’s Funds

Media Buy Datapoint of the Day

Posted on October 29, 2008 by Felix

How much is Barack Obama paying to blanket the networks with a half-hour TV buy during prime time this evening? Would you believe about the same amount as it costs to buy 30 seconds of airtime during the Superbowl? According … Continue reading →

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Extra Credit, Tuesday Edition

Posted on October 29, 2008 by Felix

VW briefly world top company as shortsellers caught: Is Porsche a car company or a market-manipulating hedge fund? Mrs Watanabe and the sudden rise of the yen: "It was common for Japanese retail investors to be offered leverage of 20 … Continue reading →

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

The Financial Crisis Hits the World’s Hungry

Posted on October 28, 2008 by Felix

The extremely poor can’t catch a break, it seems. A year ago, with food prices through the roof, they were at risk of starving to death as a result of not being able to afford to eat. But now, with … Continue reading →

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Cognitive Disconnect of the Day

Posted on October 28, 2008 by Felix

This is the front page of nytimes.com earlier this afternoon. It’s a tough time to be a journalist: clearly moves like this are clearly newsworthy, but equally clearly it’s very hard to say anything intelligent about them. Hopes for a … Continue reading →

Posted in Portfolio | Comments Off on Cognitive Disconnect of the Day

The Income Inequality Game

Posted on October 28, 2008 by Felix

Dan Goldstein, the brother of fashion blogger Lauren, has an interesting web project of his own, trying to work out how well people understand inequality in the US. Go give it a twirl; the more people who take the interactive … Continue reading →

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Quote of the Day: Rupert’s Surprise

Posted on October 28, 2008 by Felix

Michael Wolff on how Rupert Murdoch discovered there was more to Dow Jones than just the WSJ: I don’t believe he had any idea there was an enterprise side of the business. I believe I was the one to explain … Continue reading →

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The Spreading Crisis: Finance to Business to Consumer

Posted on October 28, 2008 by Felix

It’s been clear for a while now that the financial crisis has spread into the real economy. But even with that knowledge, today’s consumer confidence numbers are a shocker: The Conference Board Consumer Confidence Index, which had improved moderately in … Continue reading →

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Adventures in Icelandic Monetary Policy

Posted on October 28, 2008 by Felix

What does it mean that Iceland has just raised interest rates by 600bp, after cutting them by 350bp a couple of weeks ago? I’m not talking about monetary policy here, I’m talking about what it means in practice. Central bank … Continue reading →

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Where Buyers Should be Looking

Posted on October 28, 2008 by Felix

There was an interesting exchange just now on the deals panel, between Jim Casella, of Case Interactive Media, and Michael Wolff. If you have cash right now, said Casella, it’s a great time to be a buyer. This has been … Continue reading →

Posted in investing, M&A | Comments Off on Where Buyers Should be Looking

The WSJ’s Subscription Model

Posted on October 28, 2008 by Felix

I’m at the Future of Business Media conference, where the wifi is painfully slow and where Robert Thomson, the editor of the WSJ, spoke this morning. He spent some time addressing the subject of whether wsj.com should be free, and … Continue reading →

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