Monthly Archives: January 2008

The Ethical Economy of Meat

Posted on January 29, 2008 by Felix

Tyler Cowen, quoted in this overview of the economics of meat by Mark Bittman, says that while an environmentally-aware meat eater should eat more pork than beef, "it is better for animal welfare to eat cows rather than pigs". In … Continue reading →

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Extra Credit, Tuesday Edition

Posted on January 29, 2008 by Felix

Schmalpha: "Defer to Napoleon’s Law, that, in the absence of empirical data on skill, persistent luck is the best quality to look for in a general, and in a trader". Why Would Presidents Envy Bad Growth? "President Bush’s growth record … Continue reading →

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The Ben Stein Pile-On

Posted on January 28, 2008 by Felix

Marek Fuchs on Ben Stein this week: I have seen a lot of bad business journalism in my day, but nothing as irresponsible and so wholly unsupported by facts. Actually, by even a single fact. See also: Yves Smith, Henry … Continue reading →

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Retail Concepts and the Success of National Chains

Posted on January 28, 2008 by Felix

When I’m given the choice – which is not very often, I must admit – I choose to spend/invest my money as close to home as possible. What does that mean, in practice? That I like to buy gifts from … Continue reading →

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What Hope for Sears?

Posted on January 28, 2008 by Felix

With the news that Sears has now lost Aylwin Lewis, its nominal CEO (the de facto CEO remains its owner, Eddie Lampert), I took the opportunity to ask Jesse Eisinger a few questions via IM about what is going on … Continue reading →

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ADS Takeover Hopes Collapse

Posted on January 28, 2008 by Felix

Busted merger-arb trade of the day is the acquisition of Alliance Data Systems by Blackstone. Blackstone agreed to pay $81.75 per share for ADS, but the market didn’t believe it: on January 18, ADS shares were trading only at $52.82. … Continue reading →

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Jerome Kerviel, Prop Trader

Posted on January 28, 2008 by Felix

It seems to be emerging today that Jerome Kerviel’s job was not nearly as clerical and low-risk as SocGen first made out: his lawyers now claim that his trading was in profit to the tune of €1.5 billion at the … Continue reading →

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Fiscal Stimulus: The Consumption Dilemma

Posted on January 28, 2008 by Felix

Zubin Jelveh has some advice for the IRS on how to spin the upcoming tax rebate so that people will spend it rather than save it. It’s good advice, too – for any politician looking to maximize the bang for … Continue reading →

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How to Monetize Fed Cuts

Posted on January 28, 2008 by Felix

Matt, a loyal reader, emails: If Ben is dropping money from helicopters, how do I get some? We’re not talking about professional money traders here who can simply play in the Fed funds futures market. If you’re a retail investor … Continue reading →

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How Memes Get Started

Posted on January 27, 2008 by Felix

Friday morning, right here at Market Movers: If I had to guess, I’d say that when Kerviel’s position was discovered, he was maybe 1.5 billion or so euros underwater; the rest of SocGen’s losses are just as much the bank’s … Continue reading →

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Ben Stein Watch: January 27, 2008

Posted on January 27, 2008 by Felix

What is it with Ben Stein and his conspiracy theories? When he first started blaming Goldman Sachs traders for causing the market’s sell-off, it was easy to laugh at him. But he doesn’t seem to be letting go, and at … Continue reading →

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Everything You Ever Wanted to Know About the Buy Side

Posted on January 26, 2008 by Felix

This is eight different kinds of genius.

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Extra Credit, Weekend Edition

Posted on January 26, 2008 by Felix

The Great Deal Spread of 2008: A merger-arb hit list. Might Google Buy the New York Times? I thought that was my idea! The global economic impact of private equity investigated in most comprehensive report: Yes, that really is the … Continue reading →

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Getting Results in Davos

Posted on January 25, 2008 by Felix

I’ve been on a mini-crusade while in Davos: every time I meet someone with a truncated RSS feed or no RSS feed at all, I get all evangelistic on them about the wonders of full RSS. And guess what – … Continue reading →

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The Millennium Development Goals Take Center Stage in Davos

Posted on January 25, 2008 by Felix

If Bono did not exist, it would be necessary to invent him. The big press conference at Davos today was full of important people making important statements about how very important it is that we meet the Millennium Development Goals; … Continue reading →

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Sharing a Cab with an Ayatollah

Posted on January 25, 2008 by Felix

My Only In Davos moment this morning: sharing a cab from the train station to the conference center with an honest-to-goodness ayatollah, Mahdi Hadavi. He was a panelist at a session I attended yesterday, on faith and modernization, moderated by … Continue reading →

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When a Merger Arbitrage Goes Sour

Posted on January 25, 2008 by Felix

The first rule of merger arbitrage is simple: Don’t Try This At Home. If you’re a retail investor and one of your stocks spikes after it agrees to be taken over, sell the stock. Don’t get greedy and wait for … Continue reading →

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SocGen’s Big Mistakes

Posted on January 25, 2008 by Felix

Did Jerome Kerviel and Societe Generale cause Monday’s market meltdown? I asked the question yesterday, and today it’s looking increasingly as though the answer might be yes. His positions are being reported at between 40 billion and 50 billion euros, … Continue reading →

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Why I Still Think WSJ.com Will be Free

Posted on January 25, 2008 by Felix

I’ve said repeatedly on this site that Rupert Murdoch should and will make WSJ.com free. So how am I feeling now that he seems to have said precisely the opposite in Davos? Not quite as wrong as you might think, … Continue reading →

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Gates: Underwhelming

Posted on January 24, 2008 by Felix

Bill Gates, dishevelled as ever, launched into a hugely-anticipated speech this evening in Davos, the closest thing that this conference has to a keynote. Gates managed to splash the speech all over the front page of today’s WSJ even before … Continue reading →

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Davos Surprise: Rick Warren

Posted on January 24, 2008 by Felix

The biggest surprise of Davos so far for me? Rick Warren. Being a cosmopolitan atheist type, I’d heard of him, of course, but thought he was, well, author of a bestselling self-help book and pastor of a megachurch somewhere. What … Continue reading →

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Debt and Equity: “Fundamentally the Same Thing”

Posted on January 24, 2008 by Felix

On January 22, 2007, I wrote a slightly confused blog entry called "in defense of leverage", which tried to explain that debt and equity are not nearly as different as people often think. Exactly one year later, on January 22, … Continue reading →

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The Power of Collaborative Innovation In Action

Posted on January 24, 2008 by Felix

The theme of Davos this year is "the power of collaborative innovation". As it happens, I’m talking to one veteran delegate who explains that I’m wearing a piece of collaborative innovation around my neck. In years past, the World Economic … Continue reading →

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SocGen: The Cause of Monday’s Sell-Off?

Posted on January 24, 2008 by Felix

Was a single 30-year old French equity-derivatives trader directly responsible for the emergency 75bp rate cut that Ben Bernanke announced on Tuesday morning? It’s entirely possible. The fraud at Societe Generale was uncovered over the weekend, at which point the … Continue reading →

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Optimism over Africa

Posted on January 24, 2008 by Felix

Paul Collier and other old Africa hands gathered in Davos on Wednesday to talk about "Africa’s governance dividend". The past few years have seen Africa’s strongest growth in living memory, and the mood was cautiously optimistic – risks of a … Continue reading →

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