Monthly Archives: July 2008

The Upside of Falling Bank Stocks

Posted on July 15, 2008 by Felix

Financial stocks are plunging right now: if Fannie and Freddie can be brought to their knees, then no bank is safe. And falling bank stocks are systemically very worrying: the equity cushion is an important part of the way in … Continue reading →

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Paulson Bailout Has Very Limited Success

Posted on July 15, 2008 by Felix

The top headline on the front page of the FT this morning: US loans rescue passes its first test The top headline on the front page of FT.com this morning: US bail-out fails to calm nerves It’s not that things … Continue reading →

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Extra Credit, Monday Edition

Posted on July 14, 2008 by Felix

Fannie, Freddie, Ginnie now account for 130% of mortgage lending in U.S. "The numbers are even more dramatic if you just look at the most recent period for which data are available, the first three months of this year. Total … Continue reading →

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The Astonishing Growth of Bank Deposits

Posted on July 14, 2008 by Felix

Paul Kedrosky finds this chart of total US bank deposits in a WSJ story about FDIC insurance. But step back a minute: just look at how total deposits have grown over the past ten years! Since 2000, bank deposits have … Continue reading →

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The Intelligent Investor

Posted on July 14, 2008 by Felix

Jason Zweig has a new column at the WSJ, called "The Intelligent Investor": Could things possibly get worse? I don’t know, but I am an optimist — so I certainly hope things do get worse. Nothing else should satisfy an … Continue reading →

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Plan B: Nationalization

Posted on July 14, 2008 by Felix

Amazingly, the Paulson statement seems to have worked! Stock indices are in not-down territory, the dollar is up, Fannie’s up 10% in early trade, and even Freddie’s up 27 cents. Even if the stocks are trading wholly on option value, … Continue reading →

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Parsing Paulson: The Fannie and Freddie Bailout

Posted on July 13, 2008 by Felix

Hank Paulson is a tough guy. He’s no pushover: just look at that phone call to Jamie Dimon, telling him that anything over $2 a share was altogether far too much money to pay for Bear Stearns. So what are … Continue reading →

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Ben Stein Watch: July 13, 2008

Posted on July 13, 2008 by Felix

I’ve spent an absolutely wonderful weekend celebrating my sister’s wedding, so I have no appetite whatsoever for addressing at any length Ben Stein writing on "the economics of love". Trust me, the column is just as as unpleasant as it … Continue reading →

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RSS update

Posted on July 12, 2008 by Felix

Lots of problems with the felixsalmon.com RSS feeds right now. To be sure of getting all of my Market Movers posts, Portfolio’s RSS feed for them is http://feeds.portfolio.com/portfolio/marketmovers?format=xml. It doesn’t include any felixsalmon.com content, but given the frequency of posting … Continue reading →

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How Bear Markets Help M&A Dealmaking

Posted on July 11, 2008 by Felix

The FT reports on how the Dow-Rohm deal got done so easily: Dow’s $78 per share bid represented a premium of 46 to 47 per cent to Rohm and Haas’ share price when the parties first started to negotiate, but … Continue reading →

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The Future of News: Collaboration

Posted on July 11, 2008 by Felix

Yesterday, Dealbreaker’s John Carney told me that for the past couple of months his daily Wall Street Journal has been delivered with a free copy of the New York Sun. That kind of bundling makes a lot of sense for … Continue reading →

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Extra Credit, Thursday Edition

Posted on July 10, 2008 by Felix

Guru Returns Show Just How Tough the Going Has Been Lately Yahoo must call time on Jerry Yang: "Microsoft makes software, Google does search, Facebook is a social network. Yahoo is purple and has an exclamation mark. When asked at a Journal … Continue reading →

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Why Force Your CEO to be Chairman?

Posted on July 10, 2008 by Felix

Gary Wilson finds an interesting bylaw in some of America’s bluest blue-chip companies: Such companies as General Electric, Coca-Cola, Exxon Mobil, UPS, Deere, Caterpillar, CSX and Johnson & Johnson actually have bylaws that require the CEO to also serve as … Continue reading →

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Bloomberg Buying Bloomberg?

Posted on July 10, 2008 by Felix

Blind trusts are popular with politicians: the idea is that the politician in question can’t have any conflicts of interest with respect to his investments if he doesn’t know what his investments are. As a result, you’re not going to … Continue reading →

Posted in banking, Media, Politics | 1 Comment

Saving Fannie and Freddie

Posted on July 10, 2008 by Felix

The WSJ’s front page this morning features an important-sounding 1,500-word article on contingency plans for Fannie Mae and Freddie Mac, recapitulating Katie Benner’s article in Fortune yesterday. What would the government do if the companies ran into trouble? What could … Continue reading →

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Extra Credit, Wednesday Edition

Posted on July 9, 2008 by Felix

Obama proposes bankruptcy changes; Elizabeth Warren comments favorably. Old Ice and the Northwest Passage: It might be a while until the passage is safe for shipping. Food Price Inflation: Explanation and Policy Implications: By the CFR’s Karen Johnson. A GM … Continue reading →

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Managing Your Online Reputation

Posted on July 9, 2008 by Felix

Kate Murphy has found a chap called Kent Campbell who, for between $500 and $10,000 per month, will try to make sure that the first page of search results, when someone Googles your name, will include lots of nice positive … Continue reading →

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Valuing Investment Banks

Posted on July 9, 2008 by Felix

Heidi Moore has found a June report breaking down Lehman Brothers on a sum-of-the-parts basis: Lehman Brothers asset management alone is worth $8 billion if it is valued the same as its peers using a multiple of 20.1 times the … Continue reading →

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The Curious Case of Hernan Arbizu, Part 3

Posted on July 9, 2008 by Felix

Just a quick note to point out that on Independence Day the NYT finally picked up the Hernan Arbizu story. But not from the Argentine media, and not from me: Tax Analysts, a trade publication, said Thursday that the Argentine … Continue reading →

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When Energy Speculators Move the Market

Posted on July 9, 2008 by Felix

Bethany McLean’s interview with Brian Hunter talks a lot about speculators like Hunter driving prices in the natural gas market. Everybody seems convinced that can happen, although there’s disagreement about whether it’s illegal. It’s predictable enough that US politicians would … Continue reading →

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The Disastrous Future of the US

Posted on July 9, 2008 by Felix

The insurance industry is fighting back against the kind of articles which accuse it of price-gouging, especially when it comes to natural disasters in general and hurricanes in particular. Yesterday Munich Re held a webinar for journalists, and wheeled out … Continue reading →

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Extra Credit, Tuesday Edition

Posted on July 8, 2008 by Felix

Annals of Demand Response: "In North Carolina, Triangle Transit carried almost 100,000 bus passengers in June, up 30 percent from the previous year. " Streetread: A new one-stop shop for reading financial news. Very Ajaxy. Moonves and Zucker–Goofus and Gallant … Continue reading →

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Don’t Go To Brazil, Young Man

Posted on July 8, 2008 by Felix

Paul Kedrosky asks: Say you were 22-years-old, unattached, and recently graduated and looking for your first job. You want to be part of something big and dynamic, a truly dynamic economy where you’re going to be able to rise up … Continue reading →

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What is a Covered Bond?

Posted on July 8, 2008 by Felix

What is it about covered bonds which makes them so impervious to English? Hank Paulson had nice things to say about them today, but if you didn’t know what they were already, the WSJ explanation would hardly shed much light … Continue reading →

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A Look at Long-Term Stock Valuations

Posted on July 8, 2008 by Felix

Rob Bennett emails to tell me about a handy little tool he’s constructed, which looks at stock valuations and calculates what kind of real return you can expect to get from investing in US equities over the next decade or … Continue reading →

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