Monthly Archives: February 2008

Is JP Morgan Conflicted in the Visa IPO?

Floyd Norris is worried about conflicts of interest in the Visa IPO: The lead underwriters for the offering are JP Morgan Chase and Goldman Sachs. JP Morgan may have set the modern record for conflicts of interest by a lead … Continue reading

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Charitable Donations: The Next Backdating Scandal?

Are CEOs backdating charitable stock donations? They might well be, according to Zubin Jelveh, who has been talking to NYU professor David Yermack: Yermack estimates that while most of the 90 chief executives and chairmen in his sample are playing … Continue reading

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The New Market for $700,000 Houses

Now that Fannie and Freddie can buy jumbo mortgages up to $729,750, there’s new demand for houses up to that range. Dean Baker thinks the demand isn’t likely to be enormous, however: The law as it is written is time-limited. … Continue reading

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Visa IPO to Help Recapitalize US Banks

The Visa IPO, which could raise as much as $18.8 billion, is going to dwarf what until now was the largest IPO in US stock market history, AT&T Wireless’s $10.6 billion offering at the height of the dot-com boom in … Continue reading

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Krugman in Tokyo

French bank CLSA is putting on "a five-day gala gabfest" in Tokyo this week, according to Gwen Robinson. Along with expensive musical entertainment there’s more highbrow stuff as well: Among the 30-plus speakers being wheeled out for the assembled multitudes … Continue reading

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Adventures in Swapland

The Economist reports on something known as a "CMS spread ladder swap," which apparently was reasonably popular among German municipalities before it blew up. They were paying a relatively high fixed interest rate on their debt, and Deutsche Bank helpfully … Continue reading

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Is Mark-to-Market a Doomsday Machine?

John Dizard has a very good column in the FT today, comparing the rules about marking to market in the banking industry to the Doomsday machine in Dr Strangelove. He also has some ideas about how the vicious cycle can … Continue reading

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The 2.8 Million-to-One Winning Bet

A heartwarming story of a man who bet 50p on the horses and won £1 million. Except the odds were actually 2.8 million to one, which means he should have won £1.4 million, and he’s short to the tune of … Continue reading

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Chart of the Day: US Box Office Receipts

This is the best chart I’ve seen all year, it’s a bit like the NameVoyager for movies. It has time along the x-axis and weekly box-office receipts along the y-axis, which means that box office grosses are reflected in long … Continue reading

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Manhattan Real Estate Datapoint of the Day

Josh Barbanel reports on a sale at Trump World Tower to Chinh Chu of the Blackstone Group: According to several people briefed on the deal, Mr. Chu paid an extra $5 million to buy a 1,200-square-foot outdoor space on a … Continue reading

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Extra Credit, Weekend Edition

Monolines: Breaking up is hard to do, yet Bond Insurer Plans a Split to Protect Ratings Outdated Prices Blamed in Credit Suisse Error Real Choices: Why TIPS are attractive even at low yields. But I’m not sure I like the … Continue reading

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Credit: The Bandwidth-and-Hamsters Analogy

I’m not entirely sure what to make of Yvette Kantrow’s column today. On the one hand, I’m the only person she’s remotely nice about (I’ve "done a decent job," she says) in her review of the way the credit crunch … Continue reading

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Development: The Good News

Bill Easterly, in a nutshell, says that we’ve spent $2 trillion on aid over the past 50 years and have nothing to show for it. Charles Kenny says he’s entirely wrong, in a new paper saying that if you look … Continue reading

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Why All Consumer Magazines Should be Free Online

The Christopher Leinberger article in the Atlantic which I plugged at the beginning of last week is finally online. I moaned about such delays this morning, and got an email asking why exactly they’re so bad. I replied that Choire … Continue reading

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Ethanol’s Not Green

How did I miss this, when it was published a couple of weeks ago? Almost all biofuels used today cause more greenhouse gas emissions than conventional fuels if the full emissions costs of producing these “green” fuels are taken into … Continue reading

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Lloyds TSB: Not an Insurer

Let me be the second (after Carrick Mollenkamp) to congratulate Eric Daniels of Lloyds TSB on sidestepping the credit crunch and reporting 2007 profits up 17%. I am a bit confused however why Mr Mollenkamp chose to illustrate his blog … Continue reading

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Counterparty Risk in CDS Auctions

Diana Henriques has a piece in today’s NYT about CDS auctions. There are opaque auctions, like one recently held for something known as "pay as you go" credit default swaps; there are also transparent aucions, held by Creditex and Markit. … Continue reading

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A Plea

Can everybody please stop talking about this being "the worst housing crisis/recession since the Depression"? It’s the only housing crisis/recession since the Depression, at least if you exclude purely regional episodes. Thank you.

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Chart of the Day: Stock-Bond Divergence

This is from a Goldman Sachs research report dated yesterday. The details: We compare the investment grade CDX spread to the implied volatility of a 25 delta put of an equal weighted basket of the stocks represented in the CDX … Continue reading

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Magazines Still Don’t Get the Web

“We don’t hire editors anymore,” says Meredith publishing president Jack Griffin. “We hire content strategists.” As someone who gloried briefly as an official Content Strategist myself, I had to smile: it’s one of those titles which anybody with an iota … Continue reading

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Credit Losses: The Good News

Where are the hedge-fund losers in the credit markets? That’s what Option Armageddon is asking, via an email from a friend in the hedge-fund industry: There have been some nice fortunes made from the spread widening (Paulson, Hayman, Blue Ridge, … Continue reading

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House-Price Momentum: The Good News

John Authers looks at what drives house prices: Tim Bond of Barclays Capital points out that once house prices start to accelerate, people expect them to keep on rising at that rate. All other factors are swamped. As he says: … Continue reading

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When “Underwater” Isn’t the Same as Negative Equity

The NYT has one of its big 2,000-word pieces on the housing market today, this time concentrating on the phenomenon of negative equity. The estimate the article cites is very high, and was greeted with some skepticism by Calculated Risk: … Continue reading

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Extra Credit, Friday Edition

Pimco to run World Bank fund for bonds: Developing local markets and making money at the same time. Is there useful work in economics? Dani Rodrik thinks so. Peace through Superior Football: A proposal that Israel and Palestine should jointly … Continue reading

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Michelle Leder is a National Treasure

Roberta Yafie explains today how US bankruptcy judge Robert Drain slashed an $87 million bonus plan for Delphi executives to "just" $16.5 million. But don’t think they haven’t hidden all manner of other egregious overpayments in their 10-K: CEO Rodney … Continue reading

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