Monthly Archives: October 2007

Dow Jones: The Murdoch Era Begins

Rupert Murdoch does not, yet, officially own Dow Jones. But he clearly controls it, all the same. Today, the day that Rupert’s new business channel launches in head-to-head competition with CNBC, Dow Jones’s websites have decided to pull all CNBC’s … Continue reading

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For the Record

The wager entered into between me and Jesse Eisinger: that investment banks’ bonus pool this year – in aggregate – will be at least 90% of the size it was last year. If it is, I win a bottle of … Continue reading

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Why Environmentalism is Here to Stay

Kevin Maney reckons that environmentalism is a short-lived fad, and that Americans will keep on upping their consumption of bottled water and other environmentally-unfriendly products. I’m more optimistic than he is, however. Kevin sees environmentally-friendly behavior as making a virtue … Continue reading

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Investment Banks: Not Dead Yet

Jesse Eisinger has the cover story of the November issue of Portfolio with an obituary for Wall Street. I wonder what Barry Ritholtz thinks about this: Barry is structurally bearish, and might be inclined to agree with Jesse’s thesis, but … Continue reading

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Mechanism Design Theory for Dummies

This Nobel prize is exactly the sort of thing that journalists have nightmares about. They wake up early, and read a citation from the Royal Swedish Academy of Sciences giving the Economics prize to three economists they’ve never heard of, … Continue reading

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How the Superconduit Just Might Work

Yves Smith is pessimistic about the prospects for this proposed superconduit. (The press is all over the story this morning: you can start with the NYT, FT, WSJ, and Bloomberg, although there’s much more where that came from; that said, … Continue reading

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Ben Stein Watch: October 14, 2007

Ben Stein had an intimation of mortality about a week ago, and before he dies, he wants to share with us, his readers, his "best possible thoughts". And, amazingly, it turns out that Ben Stein’s best possible thoughts are, mostly, … Continue reading

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Is it a Bird? Is it a Plane? No, it’s Superconduit!

There’s a certain amount of sense to this idea: as Citigroup and other banks find themselves at the mercy of their off-balance sheet structured investment vehicles, or SIVs, they should just create one enormous pool with $100 billion or so … Continue reading

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Adventures in Personal Finance, APR Edition

I just got my Mastercard statement from Citibank, and found this: Apparently the ANNUAL PERCENTAGE RATE on purchases is 36%, corresponding to a "Nominal APR" of 17.74%, while the two are the same on advances. (Click on the image for … Continue reading

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International Capital Flows, Swiss Border Edition

Mark Gimein is puzzled by the lack of attention that the news media is paying to the story of a man who was stopped at a Swiss border crossing in possession of a $500 million check. I can think of … Continue reading

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US Inequality Hits New Record Highs

Greg Ip is all over the inequality beat today, with a whole series of datapoints from the IRS: New data from the Internal Revenue Service shows that in 2005, the richest 1% of tax filers earned 21.2% of all income, … Continue reading

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Madonna Math, Revisited

I still can’t quite believe the supine nature in which a throwaway clause in a rushed WSJ article – "people in the music industry estimate that at current recorded-music prices, the promoter would have to sell about 15 million copies … Continue reading

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$6.66: The Number of the BEAS

Dana Cimilluca notes that Oracle is offering $6.66 billion exactly for BEA Systems, whose ticker symbol is BEAS. He asks whether this is a coincidence. The answer is that no, it isn’t. It’s another instance of tech CEOs being cute, … Continue reading

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Where are the CROs’ Pink Slips?

Rick Bookstaber makes a good point today. Across Wall Street, heads of fixed income have been losing their jobs in the wake of trading losses. Now these men had a job: to take on risk in the fixed-income markets. When … Continue reading

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Boeing’s Fastener Slowdown

Boeing doesn’t seem to be going into much detail about the "parts shortages" which have delayed the rollout of its new 787 Dreamliner by six months. But Jeff Matthews talked to a Boeing supplier a couple of weeks ago, who … Continue reading

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No Value Added in Citi Shake-Up

I’m not a fan of this Citigroup shake-up. The ousted Thomas Maheras might have sat uncomfortably in his co-head role at the investment bank with Michael Klein (co-heads nearly always sit uncomfortably), but he was – is – a very … Continue reading

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The Wisdom of Crowds

There are pundits, and then there are prediction markets. And as a general rule, any prediction market is going to be smarter than any pundit – even especially when the pundit is a blogger with no real money on the … Continue reading

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There’s No Such Thing as Foreclosure Lite

Mark Gimein reckons that a foreclosure on a subprime mortgage isn’t as bad as a foreclosure on a more traditional mortgage, because he’s been reading about subprime borrowers going into foreclosure, and "almost without exception the borrowers the stories cite … Continue reading

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Argentina to Settle with the Paris Club

It’s taken almost almost seven years since Argentina defaulted on its debt at the beginning of 2001, but finally the country looks as though it’s going to agree terms with the Paris Club of bilateral creditors. Argentina owes the Paris … Continue reading

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Stocks: The Hunt for Causality

It’s another day of volatility in the Dow, with an intraday movement of 200 points from high to low in the space of about 90 minutes. Barry Ritholtz is hunting for causality: is it something to do with the oil … Continue reading

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Bad, Yes. Crisis, No.

Charlie Calomiris is a hawk and a bear – a combination which means that his latest paper makes for very interesting reading. It’s entitled "Not (Yet) a Minsky Moment" and the big-picture takeaway is that things are bad, but they’re … Continue reading

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Philanthropy Without Money

Philanthropy is the act of making the world a better place. That can be done directly (by giving anti-malarial bed nets to poor Africans, for instance) or it can be done indirectly (by giving money to people who will use … Continue reading

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VaR Question of the Day

What is the point of Value-at-Risk? Yesterday, in a mildly confused post, I said that if a bank loses more than its VaR six days in one quarter, that’s "a sign of utter cluelessness". In fact, it’s not quite as … Continue reading

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Inequality Datapoint of the Day

From Shanghai-based data group The Hurun Rich List, via Marketwatch: There are currently 106 mainland billionaires, up from 15 last year… The report added that China’s 800 richest individuals have net wealth of $459.3 billion, equivalent to 16% of China’s … Continue reading

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Madonna Math

I understand the thinking behind Live Nation poaching Madonna. Big concert acts like her receive 90% of gross revenues, which means that concert-promotion companies like Live Nation have difficulty making any money: In 2005 and 2006, Live Nation lost $130 … Continue reading

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