Monthly Archives: December 2008

Morning IM

Posted on December 3, 2008 by Felix

Over at Clusterstock, I’m discussing the stories of the morning with Joe Wiesenthal and John Carney. So far the main topics of discussion are AIG (yes, it wants another bailout) and the idea that Treasury might start issuing 100-year bonds. … Continue reading →

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Adventures in Anonymous Sourcing

Posted on December 3, 2008 by Felix

Ryan Chittum picks up on a dog not barking in today’s WSJ story about Goldman earnings: The paper reported that Goldman Sachs’s loss this quarter would be much worse than expected, news it attributed to “industry insiders.” That’s funny attribution, … Continue reading →

Posted in journalism | 1 Comment

Extra Credit, Tuesday Edition

Posted on December 2, 2008 by Felix

Secrets and lies: Why analyst forecasts are useless. Motion sickness quantified: The S&P 500 moved more than 5% 27 times between 1950 and 2000. And 22 times between October 1 and now. Expenditure vs investment — thinking clearly: Why bailout … Continue reading →

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Q

Posted on December 2, 2008 by Felix

The most striking thing about Bill Gross’s column this month, about equity valuations, is the first graph, showing the evolution of Tobin’s Q over the past few decades: Gross explains that Q is the value of the stock market, divided … Continue reading →

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Finance Salaries: A Reply

Posted on December 2, 2008 by Felix

Free Exchange responds to my declaration that finance-sector salaries should be slashed: The problem, however, is with self-selection. The most talented people in finance would be the ones to go. Even in the worst labour market talent is in demand. … Continue reading →

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The Failed Subprime Clampdown

Posted on December 2, 2008 by Felix

Matt Apuzzo’s excellent article on how the goverment failed to reign back subprime mortgage lenders paints a picture of deregulation run amok: The administration’s blind eye to the impending crisis is emblematic of its governing philosophy, which trusted market forces … Continue reading →

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Blame Citigroup’s woes on the Citi-Travelers Merger

Posted on December 2, 2008 by Felix

Justin Fox — rightly, I think — reckons that the repeal of Glass-Steagal was on net a good thing, not a bad thing, for the US banking system, if only because it has allowed big commercial banks like Bank of … Continue reading →

Posted in banking, regulation | 4 Comments

Greenberg’s Chutzpah

Posted on December 2, 2008 by Felix

Hank Greenberg didn’t like AIG Bailout I, nor AIG Bailout II. So he’s pushing for AIG Bailout III, which will be even nicer to AIG’s shareholders, such as Hank Greenberg. More needs to be done to save AIG. A new … Continue reading →

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Super-Seniors: The Last Word

Posted on December 2, 2008 by Felix

Sam Jones nails it. If you have any more appetite for these things, go check his blog entry out, it’s great stuff. You’ll even learn all about those Canadian leveraged super-senior conduits!

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Pay Bankers Much Less

Posted on December 2, 2008 by Felix

Andrew Ross Sorkin is worried about what happens if you don’t pay bankers enough money: The trick, of course, is to dole out enough rewards to keep executives working, and working hard, but not to dole out too much… Citigroup … Continue reading →

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Great Moments in Politics, California Edition

Posted on December 2, 2008 by Felix

A fiscal emergency has been declared, but hey, Mr Villines, don’t let that stop you from sounding like a drunken ideologue: Republican lawmakers, who last week blocked a Democratic proposal to cut billions of dollars from schools, healthcare and welfare … Continue reading →

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Super-Seniors: Your Questions Answered

Posted on December 2, 2008 by Felix

Super-seniors are not easy things to understand, as you’ll know if you managed to trudge through my attempted explanation. I got some good questions in the comments, here’s my attempt at the answers. Eli and fresnodan both bring up the … Continue reading →

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What’s a Super-Senior Tranche?

Posted on December 1, 2008 by Felix

I’ve written myself into a corner, now, and can’t think of any way to get out of writing the promised blog entry on super-senior tranches. Especially when Kevin Drum asks so nicely. So here it is. Deep breath… By now, … Continue reading →

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Extra Credit, Monday Edition

Posted on December 1, 2008 by Felix

Remembering Tanta: And over a thousand more comments. This woman touched a lot of people. The Occasional Seemingly Free Lunch: Lots of government debt trading wide to Treasuries. Oh, jeepers: Quite a time series. Amoral MBA Students And I honestly … Continue reading →

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Zimbabwe: When Even the Central Bank Can’t Keep Up

Posted on December 1, 2008 by Felix

The Reserve Bank of Zimbabwe reports: Between the 10th and the 20th of November, 2008, total fraudulent cheques we intercepted in the clearing system had risen to $60 hexillion ($60,000,000,000,000,000,000,000). Someone really ought to tell Zimbabwe’s central bankers that there’s … Continue reading →

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Genius

Posted on December 1, 2008 by Felix

How to fix Wall Street craziness: Ban all trades in the final hour of the session. (HT: Joe B) Update: Kedrosky’s on board!

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Adventures in Shopping, Black Friday Edition

Posted on December 1, 2008 by Felix

Free Exchange reads LiveJournal: so we left around 11. About half an hour into the drive, we hit traffic. Thinking their must be an accident up ahead or something else going on, we pateintly waited, but the traffic never ended … Continue reading →

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Endowments Dump Private Equity Stakes

Posted on December 1, 2008 by Felix

University endowments such as Harvard’s are almost uniquely well-suited to invest in private-equity funds: since they’re permanent pools of capital, they can ride out market fluctuations and illiquidity, and hold their stakes for decades if necessary until they mature. Or, … Continue reading →

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Ignoring the Stock Market

Posted on December 1, 2008 by Felix

This is what a yawn sounds like. The Dow’s down 450 points, the S&P 500 is off more than 6% — and this news, if it can be called news, is nowhere to be seen on the NYT’s home page. … Continue reading →

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When Mutual Funds Reopen for Business

Posted on December 1, 2008 by Felix

Barbara Kiviat has a piece today on how ordinary schlubs like you and me now have a Rare Opportunity to buy mutual funds which until recently were closed to new investors: It’s been years since anyone without an existing account … Continue reading →

Posted in investing | 1 Comment

Credit Card Crunch

Posted on December 1, 2008 by Felix

Meredith Whitney has a piece in the FT which is full of extremely large numbers: Capital destruction has been so intense that multi-trillions in capital raised by institutions through both private and public capital has gone to plug holes and … Continue reading →

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Art: The Case of Ana Tzarev

Posted on December 1, 2008 by Felix

How does any painting get to be worth, say, $70 million? Sometimes there might be a speculative component to high prices: people are often willing to spend a lot on just about any asset if they think the chances that … Continue reading →

Posted in art | 1 Comment

Tanta, RIP

Posted on December 1, 2008 by Felix

The blogosphere has lost one of its greats. As Tanta’s prolific partner, Bill McBride, explains, it was cancer which brought Doris Dungey into blogging, and it is cancer which has taken her from us all, at the cruelly young age … Continue reading →

Posted in Announcements | 1 Comment