Monthly Archives: November 2008

Extra Credit, Tuesday Edition

Posted on November 4, 2008 by Felix

A new taxpayer-owned mega-bank: "What the Treasury has dubbed UK Financial Investments Limited will end up as one of the biggest bank holding companies in the entire world." Sovereign debt hit by default fears: An interactive chart. JPMorgan Closing Up … Continue reading →

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

Jim Surowiecki on How Stocks Work

Posted on November 4, 2008 by Felix

After I wondered whether US stock market investors should think about learning from Japan, Jim Surowiecki responded with a carefully-argued blog entry about Japanese stocks entitled "There’s a Reason It’s Cheap", concentrating on the fact that Japanese companies generally have … Continue reading →

Posted in stocks | Comments Off on Jim Surowiecki on How Stocks Work

Art: Kravis Sells to Japan

Posted on November 4, 2008 by Felix

There’s a lot of interesting stuff packed into this one paragraph from Carol Vogel’s auction report today: A Degas gouache, “Dancer in Repose,” that was being sold by the financier Henry Kravis and his wife, Marie-Josée Kravis, was sought by … Continue reading →

Posted in art | Comments Off on Art: Kravis Sells to Japan

Inequality in New York

Posted on November 4, 2008 by Felix

Ed Glaeser, Matt Resseger, and Kristina Tobio have a new paper out on urban inequality (ungated version here), which declares Manhattan (New York County) to be the most unequal county in the US: While Manhattan is the physical embodiment of … Continue reading →

Posted in cities | Comments Off on Inequality in New York

Can Gross World Product Shrink?

Posted on November 4, 2008 by Felix

Mish casts his mind back to April, when I declared with great confidence that "it’s pretty much impossible for the entire world to register negative growth in any given quarter". Let me change that a little: I still think the … Continue reading →

Posted in economics | Comments Off on Can Gross World Product Shrink?

Why Bank of America has to Re-Hire Merrill’s Brokers

Posted on November 4, 2008 by Felix

I just had a very interesting conversation with a Merrill Lynch type who filled me in with much more information on the subject of those retention bonuses. The numbers: Bank of America wants Merrill’s most profitable brokers. Most brokers earn … Continue reading →

Posted in banking | Comments Off on Why Bank of America has to Re-Hire Merrill’s Brokers

Landsbanki Debt Settles at 1 Cent on the Dollar

Posted on November 4, 2008 by Felix

What happens to unsecured bondholders when a financial institution goes bust? A good place to start is to look at the settlement price in CDS auctions. Fannie and Freddie settled in the high 90s: yes, there was a credit event, … Continue reading →

Posted in banking, iceland | Comments Off on Landsbanki Debt Settles at 1 Cent on the Dollar

Extra Credit, Monday Edition

Posted on November 4, 2008 by Felix

Itau to Buy Unibanco in $12.5 Billion Agreed Takeover: For anybody like me who’s been following Brazilian banking for years, this is huge. Hedge Funds: The Future: As seen by Paul Wilmott. The Mythology Of Credit Default Swaps Crisis management: … Continue reading →

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

Exchange-Traded Derivatives: Why Stop at CDS?

Posted on November 3, 2008 by Felix

Donna Block has an overview of all the different groups jockeying to set up a CDS exchange: Businesses trying to establish the new market include CME Group Inc.; NYSE Euronext Inc.; IntercontinentalExchange Inc. or ICE; Eurex, the derivatives arm of … Continue reading →

Posted in derivatives | Comments Off on Exchange-Traded Derivatives: Why Stop at CDS?

Art: The Last-Chance Argument

Posted on November 3, 2008 by Felix

I have little time, in general, for optimistic arguments saying that art will continue to do well as an asset class. But Marion Maneker has an interesting idea about why the upcoming fall sales might not be quite the disaster … Continue reading →

Posted in art | Comments Off on Art: The Last-Chance Argument

Driven to Bankruptcy

Posted on November 3, 2008 by Felix

Do you know anybody who bought a new car in October? Most of the country was a little bit preoccupied, I think, for that kind of activity. But even so, the news that GM sold just 168,719 cars last month … Continue reading →

Posted in bankruptcy, consumption | Comments Off on Driven to Bankruptcy

Will Retail Investors Continue to Buy and Hold Stocks?

Posted on November 3, 2008 by Felix

It’s still too early to tell whether the stock-market crash of the past couple of months has done any lasting damage to the conventional wisdom that a buy-and-hold strategy applied to a diversified stock portfolio is generally a very good … Continue reading →

Posted in investing | Comments Off on Will Retail Investors Continue to Buy and Hold Stocks?

Which Markets are the Hardest to Move?

Posted on November 3, 2008 by Felix

Jim Surowiecki this week looks at what he calls "ancillary markets" — things like futures, the VIX, or credit-default swaps — and the effect they have on the stock market: Even if these ancillary markets aren’t being gamed, the attention … Continue reading →

Posted in Portfolio | Comments Off on Which Markets are the Hardest to Move?

Financial Crisis: Not Hitting Brokers

Posted on November 3, 2008 by Felix

Just how parlous a state is Wall Street in right now? In one of the more encouraging signs I’ve seen of late, a fight is brewing at Merrill Lynch — over the size of the "retention bonuses" that Bank of … Continue reading →

Posted in banking | Comments Off on Financial Crisis: Not Hitting Brokers

How AIG Failed

Posted on November 3, 2008 by Felix

The WSJ shines a bit more light on what went wrong at AIG today, with a story centering on the chap who designed its risk models, Gary Gorton. In a nutshell, anybody writing credit protection runs two risks: the default … Continue reading →

Posted in derivatives, insurance | Comments Off on How AIG Failed

Extra Credit, Sunday Edition

Posted on November 3, 2008 by Felix

Iceland, Mired in Debt, Blames Britain for Woes If we only had a financial system: And how the lack thereof caused the present crisis. GM needs bankruptcy, not a bailout ICE to Buy Clearing Corp. as Big Banks Support Plan: … Continue reading →

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

When Wall Street Takes Advantage of the Public Sector

Posted on November 3, 2008 by Felix

Andrew Clavell called it, back in February: Let’s assume you work at a Pennsylvania school board… The more complex the structured product, the more opportunity for agents to extract fees at your expense… If you claim you do know where … Continue reading →

Posted in banking, bonds and loans | Comments Off on When Wall Street Takes Advantage of the Public Sector

Liaquat Ahamed’s Lehman Question

Posted on November 2, 2008 by Felix

Add economic historian Liaquat Ahamed to the ranks of those, like Paul Krugman, who think that monetary policy has at this point done all that it can do, and that the next important step will have to be fiscal. I … Continue reading →

Posted in banking, bonds and loans, economics | Comments Off on Liaquat Ahamed’s Lehman Question

Art: Signs of Desperation

Posted on November 2, 2008 by Felix

The front page of the NYT’s arts section today is dominated by a 2,000-word auction preview by Carol Vogel. The headline is "Tapped Out?" and the article continues on all of page 16, under the hed "Auction Houses Brace for … Continue reading →

Posted in art | Comments Off on Art: Signs of Desperation