Category Archives: Econoblog

I wasn’t a big fan of Paul Krugman’s column on Friday, and his responses to readers today make him seem even more thin-skinned an arrogant than usual. (Dean Kloner: “What’s the point of the column? Anybody can concoct a scenario … Continue reading →

Jonathan Nelson of private equity shop Providence Equity had this to say at the Super Return conference in Frankfurt: The model in our industry today is far different than the headlines would lead you to believe — and it’s far … Continue reading →

Even a spectacular subprime wipeout like ResMae has value: Citadel is buying it out of bankruptcy for $180 million. I don’t see any answer to the biggest question of all, though: Will Citadel still be forced to buy back loans … Continue reading →

Back in January, I found a wonderful paper by the New York Fed’s James Vickery which showed that homebuyers are very, very sensitive to the details of the mortgages offered to them by banks. If fixed-rate mortgages rise by just … Continue reading →

Brad DeLong asks a question and then, well, doesn’t answer it: If an investor today did wish to insure against geopolitical catastrophe, how would he or she do so?… The principal risk I see today is that being borne by … Continue reading →

As chief executive of HSBC USA, Martin Glynn was at the forefront of the mortgage revolution: his company brought the joys of homeownership to thousands of individuals who might never have been able to get a mortgage in the past. … Continue reading →

Palm, the maker of the Treo, has long been rumored to be a takeover candidate. The latest rumblings started last Wednesday, with a story saying that Palm might be bought by Nokia, or by a private-equity shop. Weirdly, the stock … Continue reading →

Roddy Boyd tries to do some subprime math in the New York Post today, but I don’t quite follow his thread: The subprime mortgage market collapse just might give private-equity titan Cerberus a headache for the forseeable future. As the … Continue reading →

Giuliani Capital Advisors, the boutique investment bank which Rudy Giuliani bought from Ernst & Young 27 months ago for $9.8 million, has now been sold, to Australia’s Macquarie. We knew this was going to happen; the big question was how … Continue reading →

There’s a great deal I don’t understand about Gretchen Morgenson’s column on Sunday, about mortgages. If nobody understands the mortgage market, how is she so sure that it’s a train wreck, and that the decline in the mortgage securities index … Continue reading →

John Quiggin is getting his razor out; the least you can do in response is get your wallet out. I will be most disappointed if the blogosphere doesn’t propel him easily into the Top 30.

Rob Cox, at Breaking Views, reckons that Warren Buffett (read his annual letter to shareholders here) is going to have difficulty finding someone to replace him as chief investment officer. Here’s Buffett: I intend to hire a younger man or … Continue reading →

Understanding mortgage-backed securities is hard. They don’t behave like normal fixed-income instruments: even now, with subprime defaults soaring, the big risk on MBSs is prepayment, not borrower default. And research on MBSs frequently includes passages like this: 6-wala FN 6s … Continue reading →

Lars Toomre (via Alexander Campbell) thinks that yesterday’s SEC actions are just the first shoe dropping: Toomre Capital Markets strongly suspects that more forthcoming enforcement actions will be filed in connection with the use of credit-default swaps and the use … Continue reading →

You can’t have missed the insider-dealing news at this point. Just look at the SEC go! Federal authorities said that they had exposed one of the most far-reaching insider trading schemes on Wall Street in decades, involving four investment banks … Continue reading →

Dean Baker is upset at the New York Times today. Apparently it’s running an article which reports without comment Treasury Secretary Paulson’s assertion that free trade has been a cornerstone of U.S. prosperity and warning against protectionist barriers. Baker doesn’t … Continue reading →

There seems to be a lot of bellyaching from various pundits about equity bridges — one of the more startling innovations in the world of private-equity capital structures. Here’s Andrew Ross Sorkin explaining it, and putting the knife in at … Continue reading →

Krugman’s lost it today, with a bizarre column which would makes Michiko Kakutani on a bad day look sensible. Not only is it all predicated on a silly conceit (“if we’re going to have a crisis, here’s how”), but he … Continue reading →

Just in case you thought that US housing prices were falling: er, not so much. Kash Mansori has the details, but suffice to say that the US House Price Index rose by 5.9% in 2006, and by 1.1% in Q4. … Continue reading →

Never mind those inflation calculators you find all over the internet — Free Exchange and Brad DeLong both have posts up today asking pointed questions about what yesterday’s money can buy today. First Brad DeLong, resuscitating an old post of … Continue reading →

Al Gore and I both try to offset our carbon emissions. Are we actually making things worse when we think we’re making things better? The Economist and Tyler Cowen both try to make the case, and both are quickly slapped … Continue reading →

Adventures in private equity: Remember how the Blackstone bid for EOP — at the time, the biggest private-equity bid ever — was quickly topped by another bid, from Vornado? Well, the same thing might happen to KKR’s bid for TXU. … Continue reading →

Austan Goolsbee wonders in the NYT today why billionaires don’t give more of their money away, given that they can’t spend it (there’s just too much of it to spend) and that even their children can’t realistically spend it either: … Continue reading →

Should we care about what the markets did on Tuesday? The news made the front page of just about every newspaper in the world, so it’s clearly important, right? Well, let’s keep things in perspective. Here’s a stock chart for … Continue reading →