Monthly Archives: January 2008

Payrolls: Ignore Them If You Can

It’s a new month tomorrow, and it’s a Friday, which means it’s payrolls day. Sudeep Reddy has a good preview of what the jobs report might bring; forecasts range from a decrease of 125,000 (thank you Mish) to an increase … Continue reading

Posted in economics | 1 Comment

New York’s Congestion Charge: The $8 Proposal

Aaron Naparstek has details of the Traffic Congestion Mitigation Commission recommendation with respect to NYC’s congestion charge. It differs from the original Bloomberg proposal in a number of respects, and I have to say I like it: it’s much simpler, … Continue reading

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When Sovereign Wealth Funds Invest for Political Reasons

The US is the world’s sole superpower: it has global influence both politically and militarily which no other country can even dream of. What’s more, it does not hesitate to use that influence in its own best interests. The one … Continue reading

Posted in Politics | 1 Comment

MBIA: Triumph of the Techocrats?

In the battle of Bill Ackman vs MBIA, the market seems to be speaking quite clearly: MBIA is winning, if only by sheer force of boredom. Ackman’s manifesto might be forcefully written, but MBIA’s stock has soared from an opening … Continue reading

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What the Next President Needs to Know About the Economy

Read a book, save the economy! Floyd Norris is holding out some hope that his readers might be able to come up with a book or three that the next US president could read in order to understand "how the … Continue reading

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Mortgage Insurers: The Next Shoe to Drop?

At the end of 2007, mortgage insurer MGIC had $212 billion of insurance in force. And it’s not performing well: in the fourth quarter alone its claims reached $1.3 billion. The value of the entire company, according to the stock … Continue reading

Posted in housing, insurance | Comments Off

How Regulators Failed the Monolines

I have a feeling it’s going to be Monoline Day today. MBIA’s conference call at 11am should be interesting, even though the company has said it’s not going to take any live questions from analysts. Until then, the quote of … Continue reading

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MBIA: Waiting for the Inevitable Downgrade

How is it possible that MBIA lost $2.3 billion in the fourth quarter in the wake of a monster $3.5 billion charge? Didn’t Jonathan Laing just tell us, in Barron’s, that its losses could never get so big so fast? … Continue reading

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Extra Credit, Thursday Edition

JPMorgan Chase Tower at WTC Site to Lose the Beer Gut Peloton’s `World Coming to an End’ Bet Returned 87% in 2007 Carlyle Chairman: There’s No Crisis Mexico Slashes 2008 Growth Forecast on U.S. Economy: It’s now expected to grow … Continue reading

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Department of Improbable Statistics, Beer Edition

Parmy Olson on beer drinking in Germany: Things will get worse as a new, national smoking ban takes hold across the country. Pub sales should drop by a third this year because of the ban, according to the German Brewers … Continue reading

Posted in statistics | 1 Comment

The Dangers of Junk

Accrued Interest thinks that high-yield is a good buy at these levels (a yield of about 10%). The "value proposition," he says, "is relatively simple": The greatest credit loss rate of the last 25 years was in 2001 at 8.3%. … Continue reading

Posted in bonds and loans | Comments Off

Treasuries: Steeper

Julian Robertson’s big macro bet right now, according to Brian O’Keefe, is a curve steepener. Here’s the idea: In the fall, Robertson invested in a derivative called a "curve steepener" that allows him to be long the price of two-year … Continue reading

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50bp, Right on Schedule

So it was to be 50bp after all: Ben Bernanke has proved himself capable of following through in the two-step rate cut he initiated a week ago, even in the knowledge that cutting 125bp over the course of little more … Continue reading

Posted in fiscal and monetary policy | Comments Off

House Prices: The Best and Worst US Cities

Justin Fox has another of his very pretty charts today, showing the evolution of house prices in 20 different cities between January 2005 and November 2007. Let’s say I allowed you to go back in time to January 2005 and … Continue reading

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Bruce Wasserstein is Overpaid

Now that’s what I call a bonus. Lazard reported 2007 profits of $122.6 million today, and gave CEO Bruce Wasserstein a bonus of $36.2 million for the year – on top of a restricted-stock grant of $96.3 million. How did … Continue reading

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Cigarette Smokers For Daniel Bouton

Last week, SocGen CEO Daniel Bouton offered his resignation to the board (chairman: D. Bouton) but it was not accepted. Today, SocGen chairman Daniel Bouton, along with the rest of the board, announced the unanimous support of CEO Daniel Bouton, … Continue reading

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The Credit Crunch and US Politics

It’s pretty obvious that the incumbent party is always going to have a harder time being reelected if it’s running during a recession. But a post by John Quiggin today implies that the thing that the Republicans should be most … Continue reading

Posted in personal finance, Politics | Comments Off

GDP Growth: Low, and Falling

We officially didn’t enter a recession in 2007: GDP growth for the fourth quarter was positive, albeit very low at 0.6%. The main engine of growth is still consumer spending, rather than exports, but it’s slowing, contributing 1.4 percentage points … Continue reading

Posted in economics, fiscal and monetary policy | Comments Off

Extra Credit, Wednesday Edition

Morgan Stanley and the $7 Billion Unknowable: Commercial mortgages are now mark-to-model Level 3 assets. IMF Sees World Growth Slowing, With U.S. Marked Down: But the US will avoid a recession, it seems. Lessening the Reliance on VaR: It’s About … Continue reading

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WSJ Readers Turn to the Bullish Side

What are we to make of the fact that Brian Wesbury’s bullish outlook piece in the WSJ spent much of the day atop the most popular list? The first thought is that it’s a bearish sign: so long as there’s … Continue reading

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Dreaming of Regulatory Cooperation

Roger Ehrenberg has a sensible call for, among other things, "common regulatory frameworks": regulators around the world should all be singing from the same songbook, he says, in order to minimize regulatory arbitrage as well as reduce the "immense friction … Continue reading

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Markets in Everything, Jingle Mail Edition

Are you stressed out about your mortgage payments? Do you have little or no equity in your home? Is your home sinking under the waves of the real estate crash? What if you could live payment free for up to … Continue reading

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How to Enjoy Your Billions

Julian Robertson is making lots of money – and, he says, "it’s wonderfully fun". This is a sentiment one doesn’t hear very often from hedge-fund managers, who tend to have high-stress lives and demanding investors. The solution to that problem? … Continue reading

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Boris Nurdbongleur Dodges the Credit Crunch

Tim Price: Speaking on condition of anonymity, Marti Peeps, a spokesman for the bank, admitted that he was gloomy on prospects for the sector, notwithstanding Societe Bancaire de Neasden’s surprise results. “This has come in the wake of other debacles … Continue reading

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How Gene Ludwig Forced the Countrywide Sale

Why did Countrywide sell out to Bank of America? Because it had to. That’s the message of a very good WSJ piece today, which explains that Countrywide, before its takeover by the Charlotte giant, was essentially throwing itself upon the … Continue reading

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