Monthly Archives: December 2007

Exports to the Rescue?

Posted on December 31, 2007 by Felix

Paul Krugman has an interesting chart, showing US exports rising even as residential investment has been falling. Indeed, he writes, “thanks to the weak dollar, they’ve risen almost enough to offset the housing plunge”. Now this is one of those … Continue reading →

Posted in economics | Leave a comment

Extra Credit, Weekend Edition

Posted on December 29, 2007 by Felix

Even before the Internet, news was pretty close to free: Justin Fox hits the nail on the head. (Related: Chris Anderson’s talk at Nokia.) Return to the Trial, or, why Western Union sucks: “Most of us need not concern ourselves … Continue reading →

Posted in remainders | Leave a comment

The Economics of Non-Judicial Foreclosures

Posted on December 28, 2007 by Felix

Have I mentioned of late how much I love my commenters? Many thanks to James Moore, who adds a very interesting twist to my obsession over the proportion of mortgages which are non-recourse. Moore gets straight to the heart of … Continue reading →

Posted in housing | Leave a comment

If We’re Looking at AUM, Let’s Also Look at LUM

Posted on December 28, 2007 by Felix

As we learned from the WSJ last month, “assets under management” is not the most useful of metrics to use when judging the size of a hedge fund. For example, bond fund Y2K said it had assets under management of … Continue reading →

Posted in hedge funds | Leave a comment

Good and Bad Reasons to Worry About the Credit Crisis of 2008

Posted on December 28, 2007 by Felix

Floyd Norris’s column today reads as though it was written by two different people. Most if it is very good – a clear explanation of where the next credit crisis might come from. But then, at the end, it falls … Continue reading →

Posted in bonds and loans | Leave a comment

Warren Buffett, Bond Insurer

Posted on December 28, 2007 by Felix

I’m fascinated by the news that Warren Buffett is starting up a new bond insurer. On the one hand, it makes perfect sense: he’s an expert in insurance, he already has a triple-A credit rating, and his competitors in the … Continue reading →

Posted in bonds and loans, insurance | Leave a comment

Explaining CDOs, Overcollateralization Edition

Posted on December 28, 2007 by Felix

I got an email from my friend Todd yesterday, saying that despite my best efforts, he still doesn’t understand CDOs. This puzzled me: Todd’s a very clever chap, and he even works at an investment bank. CDOs are easy to … Continue reading →

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Extra Credit, Friday Edition

Posted on December 28, 2007 by Felix

Wall Street Journal’s Cursory Story on Collateralized Debt Obligations: Yves Smith takes it apart. Are dead-tree magazines good or bad for the climate? Why Portfolio.com has a larger carbon footprint than Portfolio magazine. World’s Biggest Building Coming to Moscow: Crystal … Continue reading →

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McDonald’s Datapoint of the Day

Posted on December 27, 2007 by Felix

George Will: McDonald’s exemplifies the role of small businesses in Americans’ upward mobility. The company is largely a confederation of small businesses: 85 percent of its U.S. restaurants — average annual sales, $2.2 million — are owned by franchisees. McDonald’s … Continue reading →

Posted in stocks, wealth | Leave a comment

Are Subprime Losses Being Exaggerated?

Posted on December 27, 2007 by Felix

John Berry dedicates his Bloomberg column today to debunking exaggerated estimates of the magnitude of the subprime crisis. $300 billion, he asks? $400 billion? Pshaw. A more realistic amount is probably half or less than those exaggerated projections — say … Continue reading →

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