Monthly Archives: October 2008

Extra Credit, Tuesday Edition

Posted on October 22, 2008 by Felix

Fed to Provide Up to $540 Billion to Aid Money Funds: Yet another indication the credit crunch is far from over. Porsche, VW – and hedge funds: Did Porsche engineer a VW short-squeeze? Revisiting the 1932 Economic Yearbook

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Counterintuitive Result of the Day, Brain Drain Edition

Posted on October 21, 2008 by Felix

The past 20 years have not been a good time to be of Indian origin in Fiji. As a result, many Indians in Fiji have emigrated to Commonwealth countries such as Australia, New Zealand, and Canada, making use of their … Continue reading →

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Annals of Counterparty Risk, Tim Backshall Edition

Posted on October 21, 2008 by Felix

Remember this? It’s Friday, March 14, and hedge fund adviser Tim Backshall is trying to stave off panic… Bear Stearns Cos. shares have plunged 50 percent since trading began today, and his fund manager clients, some of whom have their … Continue reading →

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The Global Crisis

Posted on October 21, 2008 by Felix

On Saturday, Brad Setser, following Peter Garnham, made the very important point that while the big countries’ central banks have each others’ backs, emerging-market countries are being left out in the cold. For all the talk about how the G-7 … Continue reading →

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Airline Economics, United Earnings Edition

Posted on October 21, 2008 by Felix

It’s not easy, being an airline. Thanks to high fuel costs, United lost $252 million in the third quarter, on an operating basis. On the other hand, United was hedged. And as a result of those hedges, United ended up … Continue reading →

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Disappearing Stock-Market Earnings

Posted on October 21, 2008 by Felix

Slide of the Day comes from John Mauldin, via Paul Kedrosky: he shows how estimates for the S&P 500’s 2009 earnings have come down from $81.52 in March to just $48.52 now. That’s a drop of 40% in seven months. … Continue reading →

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Towards a Google Buyback

Posted on October 21, 2008 by Felix

I’m generally not a fan of stock buybacks. I’ve hated on the idea in the past, especially as regards high-flying tech stock Apple — but weirdly, I don’t have the same problem with the prospect of Google doing it. CEO … Continue reading →

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The Return of Lending: Still Distant

Posted on October 21, 2008 by Felix

Andrew Ross Sorkin gets an astonishing, if anonymous, quote this morning: “It doesn’t matter how much Hank Paulson gives us,” said an influential senior official at a big bank that received money from the government, “no one is going to … Continue reading →

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Extra Credit, Monday Edition

Posted on October 20, 2008 by Felix

First Birthday for the Recession? "In all likelihood, this recession either has reached its first birthday or will soon do so." Is A Recession The Best Time To Tackle Climate Change? Stallion Fees Sink as Financial Crisis Hits Thoroughbred Market: … Continue reading →

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Will the US Make Money on its Bailout?

Posted on October 20, 2008 by Felix

Jim Surowiecki is quite sure that Treasury’s bailout plan, or at least the $250 billion part of being spent on recapitalization, is an investment rather than an expenditure: I realize that, given the way the U.S. budget is accounted for, … Continue reading →

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Questions for Value Investors

Posted on October 20, 2008 by Felix

Here’s a contest for you — since y’all did so badly on the last one — can anybody find me a value investor who isn’t saying that there’s loads of cheap stocks out there and that they’re pretty bullish over … Continue reading →

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Extra Credit, Monday Afternoon Edition

Posted on October 20, 2008 by Felix

Money in the street: Very high yields on TIPS; it’s unclear why. Bank-Lending Boost Could Spur Thaw: The first signs of life in the interbank market. Jim Cramer Retreats Along With the Dow: A weirdly sympathetic article by David Carr. … Continue reading →

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Department of Dubious Statistics, Oil Imports Edition

Posted on October 20, 2008 by Felix

The $700 billion the US pays each year to nasty oil-exporting countries — the $700 billion that both Barack Obama and John McCain have cited in their paeans to energy independence — doesn’t exist: According to government agencies that track … Continue reading →

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The Problem With Cap-and-Trade Offsets

Posted on October 20, 2008 by Felix

Richard Sandor, the chairman of the Chicago Climate Exchange, is an old-school Chicago trader who doesn’t often self-censor. But in this case, he most definitely should have: The debate over whether or not a polluter would have cut its greenhouse-gas … Continue reading →

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Melting

Posted on October 20, 2008 by Felix

Your daily TED update: 320bp, and falling. I love Sam’s metaphor: not frozen so much as melting. Credit markets, like water, freeze quickly and melt slowly. But if things continue to improve at this clip, Bill Gross’s prediction of Libor … Continue reading →

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Extra Credit, Sunday Edition

Posted on October 19, 2008 by Felix

Those stupid bankers and their stupid stupidity: Dsquared on why blaming people is a little bit silly. Now do something about the interbank market – directly: Willem Buiter on how central banks can bring down Libor. Libor to Decline on … Continue reading →

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The Coming Consumer Credit Crunch

Posted on October 19, 2008 by Felix

I was going to respond to Virginia Postrel’s silly article claiming that current levels of consumer debt are nothing to worry about. But I don’t need to, because Henry Blodget, without mentioning Postrel directly, has done it for me. All … Continue reading →

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Why the CDS Market Didn’t Fail

Posted on October 19, 2008 by Felix

Jane Baird has the latest on what Alea calls "the non-event of the year": the Lehman Brothers CDS settlement on Tuesday. The upshot is that there’s very little to worry about: the worst-case scenario is limited to the failure of … Continue reading →

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Best endorsement yet!

Posted on October 19, 2008 by Felix
Posted in Not economics | Comments Off on Best endorsement yet!

Car Crash vs Train Wreck

Posted on October 19, 2008 by Felix

Jose Mugrabi: "I feel safer with Warhol than with U.S. Treasury bonds."

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USA: The Biggest Obstacle to Global Banking Regulation

Posted on October 18, 2008 by Felix

David Galbraith goes down the litany of problems with US banks which is familiar to any European in the US or, most likely, to anybody who even knows a European in the US. Most of it surrounds the ridiculous difficulty … Continue reading →

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Jargon Watch, Media Edition

Posted on October 18, 2008 by Felix

In her Fishbowl NY exit interview, Rachel Sklar says that she’s “excited to do stuff in other verticals”. Earlier today, a friend of mine in the media unselfconciously used the words “surface” and “obsolete” as verbs in rapid succession. Both … Continue reading →

Posted in Not economics | 1 Comment

Dominique Strauss-Kahn’s Lower Half Problem, Redux

Posted on October 18, 2008 by Felix

The WSJ has the story; don’t say I didn’t warn you.

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Extra Credit, Friday Edition

Posted on October 17, 2008 by Felix

Treasury Has No Authority to Coerce the Banks Worldwide Financial Crisis Largely Bypasses Canada: Thanks to a worthwhile initiative or two. Requiem for the CPDO Four Magic Words: "We Are Providing Capital" Jokes about the financial crisis: "What’s the capital … Continue reading →

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How to Survive the Crisis: Sleep, Get High

Posted on October 17, 2008 by Felix

Andrew Lahde isn’t running money any more, and boy is he glad to be out of the game. His final letter to investors is a true classic, and even ends with a paean to marijuana: I will no longer manage … Continue reading →

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