Monthly Archives: November 2008

The WSJ Breaks the External-Link Taboo

Many congratulations to the Wall Street Journal! Here’s a little bit of today’s WSJ.com front page — you can click on the picture for a big screencap of the full front page. The important thing here is the second link, … Continue reading

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Extra Credit, Friday Edition

Berkshire Hathaway Profit Falls 77% to $1.06 Billion: Oof. And the reinsurances losses attributable to hurricanes Ike and Gustav, along with some other natural catastrophes, added up to only $186 million. There were much bigger losses attributable to the fact … Continue reading

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

Icelandic CDS Datapoints of the Day

The CDS auctions for Iceland’s failed banks are all over now, and the results are up at creditfixings.com. Bank Inside Market Midpoint Open interest Final price Landsbanki senior 3.375 €454 million to sell 1.25 Landsbanki subordinated 1.375 €63 million to … Continue reading

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Art: The Prints Market Crumbles

It’s hard to judge the state of the art market by looking at auction results of unique paintings, precisely because they’re unique and you can always make an argument about why this or that particular painting did or didn’t sell … Continue reading

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Why Would Treasury Cut AIG’s Interest Payments?

The WSJ’s latest AIG story has set off Joe Wiesenthal’s bullshit detector — and mine, too. It’s headlined "U.S. Weighs Options to Ease Strain on AIG", and it seems to be an attempt to jawbone Treasury into reducing the punitive … Continue reading

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Liquidity Is Noncontagious

This is why Treasury’s original TARP plan, to buy up illiquid assets, was doomed from the start, and why it’s good news we’ve moved on from there: J.P. Morgan Chase & Co. said Friday that its Level-3 assets increased $1.3 … Continue reading

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Bank Deposit Datapoint of the Day

Robert Peston, yesterday, after the Bank of England rate cut: I’ve just had a call from an astonished individual who has several hundred million pounds that he puts on deposit in various banks. As of 10 minutes ago, a leading … Continue reading

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What’s Happened to the Equity Risk Premium?

Jasper asks, in the comments: Can you comment generally on how much less risky it is to invest in the stock market now than it was 3 months ago? In other words, now is obviously a better time to invest … Continue reading

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What a Recession Looks Like

The normally dry Labor Department is adding increasing amounts of color to its payroll reports. Today’s begins: Nonfarm payroll employment fell by 240,000 in October, and the unemployment rate rose from 6.1 to 6.5 percent, the Bureau of Labor Statistics … Continue reading

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Extra Credit, Thursday Edition

CDS, the DTCC and data mining: Putting the CDS market in perspective. ABX and DTCC Data: When the tail wags the dog. Obama’s Choice: On Geithner and Summers. The Mais Lecture on ‘Maintaining stability in a global economy’ given by … Continue reading

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The Downside of CDS Demonization

Add Kevin Drum to those who think that a bit of CDS demonization is not such a bad thing at all. Unfortunately, he’s a bit shaky on the facts: It’s a little hard to get a handle on an exact … Continue reading

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When Colleges Speculate, Part 2

David Turner reports on a deal structured by Clare College, Cambridge: One of Cambridge’s oldest colleges has borrowed money for the first time in its 700-year history in a "sensational deal" devised to take advantage of the investment opportunities presented … Continue reading

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The Bleak Christie’s Sale

Christie’s had a big impressionist-and-modern sale last night, and the results, in Carol Vogel’s headline, were bleak. All the biggest-ticket pieces failed to sell, with a Rothko estimated at $20 million to $30 million being passed after not even getting … Continue reading

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Treasury Secretary Speculation Heats Up

There’s not much liquidity on the Treasury secretary contracts over at InTrade, but for what it’s worth Summers last traded at 22, Geithner at 20, Paulson at 15 (!), and Volcker at 10. The only long-shots to trade were Buffett … Continue reading

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The Bank of England Capitulates

If there’s one advantage of being a little behind the curve when it comes to rate cuts, it’s that you can shock the markets with an absolutely monster out-of-the-blue 150bp cut even as most people were expecting just 50bp. Well … Continue reading

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Extra Credit, Wednesday Edition

Morally Conflicted About Walking Away? Don’t Be. California is a non-recourse state for a reason; take advantage of it. Fed Economists Duel Over Crisis ‘Myths’ October Pain Was ‘Black Swan’ Gain: How Taleb’s new fund is performing. Convertible Bonds Cause … Continue reading

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When Can You Trust Economics Papers?

I had a great lunch with Columbia’s Ray Fisman a couple of weeks ago, and I’ve been meaning since then to blog about one of the big problems with what you might call Freakonomics-style economics, where economists sift through statistical … Continue reading

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The Prop 8 Hypocrites

This is the kind of thing which tipped support for Proposition 8 over the 50% mark: The NYT boils the story down to one paragraph: A total of $73 million was spent on the race there, a record for a … Continue reading

Posted in Not economics | 3 Comments

Big Moves in Low-Priced Stocks

I’ve been doing quite a good job of screening out stocks-are-up-stocks-are-down noise of late, which is a good thing, but allow me a small relapse in response to Jim Surowiecki, who talks today about what happened to Citigroup stock this … Continue reading

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CDS Didn’t Bring Down Bear and Lehman

I’m thinking I should institute some kind of CDS Demonization Watch: this meme is only going to grow and grow. And it’s spreading, too, into the wonkier areas of the financial press — people and publications on the ought-to-know-better list, … Continue reading

Posted in derivatives | 25 Comments

How Stocks are Like Bonds

Many thanks to Nadav Manham, who, after reading my exchange with Jim Surowiecki, pointed me to a fabulous (if long) article which Warren Buffett published in Fortune in 1977. Headlined "How Inflation Swindles the Equity Investor", it details how a … Continue reading

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Victory

Only twice have I seen lots of American flags on the streets of downtown New York. Once was after 9/11; the other time was last night, after the election of Barack Obama. An impromptu midnight street party sprang up on … Continue reading

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Country Risk Datapoints of the Day

Here’s the kind of table most of us never thought we’d see, taken from Merrill Lynch’s latest economics note: The rankings are constructed by considering the biggest risk factors affecting countries today: current account financing gap, FX reserves/short-term external debt … Continue reading

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Financial Meltdown: The Conventional Wisdom

John Lanchester has a discursive review of a number of high-profile financial books in the latest New Yorker. Some of his points are well taken: he finds an old quote of Warren Buffett’s, for instance, about junk bonds, which applies … Continue reading

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Treasury Secretary Brackets

Who will be Obama’s first Treasury Secretary? Portfolio has a fabulous interactive feature to help you work it out; the first time I tried it I got Jamie Dimon, while the second time I got Paul Volcker. (It shakes up … Continue reading

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