Monthly Archives: April 2008

Extra Credit, Sunday Edition

Posted on April 27, 2008 by Felix

MyFICO, Myself: Why you shouldn’t worry about your credit score. Damn Latte-Drinking Obama Supporters Merrill Lynch, slackers: Why can’t Merrill wire funds from a 401(k)?

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Did the CBOT Strongarm Bob Rubin?

Posted on April 27, 2008 by Felix

Are you in the mood for 4,000 carefully-balanced words on the subject of Bob Rubin and the degree to which he may or may not be responsible for Citigroup’s recent woes? Well, here you go. The article’s good, but it’s … Continue reading →

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Ben Stein Watch: April 27, 2008

Posted on April 27, 2008 by Felix

Ben Stein’s column this week is the first since the NYT kicked off its formal review of his film thusly: One of the sleaziest documentaries to arrive in a very long time, “Expelled: No Intelligence Allowed” is a conspiracy-theory rant … Continue reading →

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The Negative Correlation Between Wine Price and Quality

Posted on April 26, 2008 by Felix

Back in November I held a Pinot contest which concluded that there was really no correlation between price and quality – or if there was, it was negative. Of course, there was nothing really scientific about a drunken night in … Continue reading →

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When Trichet Met Bernanke

Posted on April 26, 2008 by Felix
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Extra Credit, Friday Edition

Posted on April 25, 2008 by Felix

The NYT Discovers High-Priced Textbooks, but Misses Cause Baker responds to the NYT editorial board; so does Krugman. The science of buying a home: "We picked a neighborhood that we liked a lot, we found the house that we liked … Continue reading →

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The Snipes Sentence: Three Years and 65 Words

Posted on April 25, 2008 by Felix

Chuck Norris can divide by zero. Chuck Norris can split the atom with his bare hands. But even Chuck Norris can’t keep Wesley Snipes out of jail. This is an acutal letter written to the judge who recently sentenced Snipes … Continue reading →

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Learning from Amex

Posted on April 25, 2008 by Felix

It’s very long (8,500 words!) but if you have some time I’d recommend reading the transcript of yesterday’s American Express earnings call. American Express is a very interesting company to watch at times like this: it’s a borrower, and a … Continue reading →

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Heloc Securitization Datapoint of the Day

Posted on April 25, 2008 by Felix

The biggest losses in the mortgage world have generally been taken on second liens – what in the real world are generally known as home equity lines. If you have a mortgage and a home equity line, and you default … Continue reading →

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Reporting on Stock Moves

Posted on April 25, 2008 by Felix

Many thanks to Colin Barr, who joined in the conversation after I called him out for his reporting on Merrill yesterday. My problem was with Barr saying that "shares of Merrill Lynch rose 8% after CEO John Thain said he … Continue reading →

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The Nascent Secondary Market in Auction-Rate Securities

Posted on April 25, 2008 by Felix

The Restricted Securities Trading Network in auction-rate securities has been up and running now since March, with 7-10 transactions taking place per day. That’s not an enormous number of trades, but it’s enough to see pretty clearly what the clearing … Continue reading →

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Extra Credit, Thursday Edition

Posted on April 24, 2008 by Felix

Bondholders Lucky to Get 10 Cents in Looming Defaults R.I.P. Bond Rally, 2005-2008 How Murdoch Cheated ‘WSJ’ Independence Pact Is Wall Street ‘Full of Bull’? Yes, if you’re an individual investor taking sell-side research at face value. More on the … Continue reading →

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Causality Watch, Merrill Lynch Edition

Posted on April 24, 2008 by Felix

Colin Barr: Shares of Merrill Lynch rose 8% after CEO John Thain said he won’t entertain talk of a breakup of the brokerage firm, which has been hit hard since last summer by heavy losses on mortgage-related securities. Why do … Continue reading →

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Selling Funds to Institutions and Individuals

Posted on April 24, 2008 by Felix

I had a lovely lunch with Roger Ehrenberg this afternoon, and we talked among other things about the big buy-side firms such as Warburg Pincus, Fortress, and the like – companies who seem to be able to raise huge amounts … Continue reading →

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Why Index Investing Isn’t Passive Investing

Posted on April 24, 2008 by Felix

In the debate over active vs passive investing, the base-case assumption is that a passive investment involves tracking a stock-market index, normally the S&P 500. But of course stock-market indices are actively managed, with listing requirements and changing components and … Continue reading →

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Why the NYT Shouldn’t Attack the WSJ

Posted on April 24, 2008 by Felix

Barry Ritholtz thinks that as the WSJ becomes newsier and more like the NYT, the NYT should beef up its business coverage and try "to go after the Journal’s audience" of executives who expense their subscriptions. I don’t think this … Continue reading →

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Should CFOs be Economic Pundits?

Posted on April 24, 2008 by Felix

Kevin Kelleher, like me, listened to the Apple conference call yesterday. Both of us picked up on this exchange: Mike Abramsky – RBC Capital Markets And then final question, you haven’t said anything in your call about economic headwinds. It’s … Continue reading →

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Do People Drive Less When There’s a Carbon Tax?

Posted on April 24, 2008 by Felix

Peter Zimonjic makes an important point today: that a carbon tax, in itself, and over the short-to-medium term, will have very little effect on gasoline consumption. What Zimonjic doesn’t mention is that this is no reason not to implement a … Continue reading →

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Condos With Embedded Puts

Posted on April 24, 2008 by Felix

People say that given the non-recourse nature of mortgages in states like California, homeowners don’t normally buy their houses so much as buy a call option to buy the house at the purchase price, along with a put option to … Continue reading →

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Extra Credit, Wednesday Edition

Posted on April 23, 2008 by Felix

Global CDO Issuance: CRASH !!! International financial system was close to the brink – Credit Suisse ex-CEO Weighing a McCain Economist: He looks like "the least fiscally conservative candidate still in the race". The homeownership ideology: "Only an ideologue would … Continue reading →

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Getting Empirical on Subprime Losses

Posted on April 23, 2008 by Felix

Tom Brown has a very interesting essay over at bankstocks.com, where he looks at 2006-vintage subprime mortgages and tries to come up with a cumulative loss rate for them. He makes the reasonable assumption that the ABX index represents subprime … Continue reading →

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The Semiotics of Stock Tickers

Posted on April 23, 2008 by Felix

Living in New York, one sees stock tickers quite often – crawling along the bottom of a TV screen, scrolling around a building in midtown, even crowning the burger flippers at the McDonalds at 160 Broadway. What are they for? … Continue reading →

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Murdoch in Welcomed-by-the-Union Shocker

Posted on April 23, 2008 by Felix

This might be a first: has an acquisition by Rupert Murdoch ever before been welcomed by a newspaper’s unions? “We’d appreciate anybody coming in here that has a newspaper background, that knows New York, whether it’s Zuckerman or Murdoch or … Continue reading →

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Can We Trust the TIPS Spread?

Posted on April 23, 2008 by Felix

Add Wolfgang Münchau to the list of inflation hawks. If the Fed ignores inflation while putting out more urgent fires in the financial markets, he says, "the US bond market would implode, the current account deficit would become impossible to … Continue reading →

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How Economic Illiteracy Could Doom Gordon Brown

Posted on April 23, 2008 by Felix

Gordon Brown is arguably the most economically literate head of state in the world. Which is maybe why he felt comfortable tinkering with the UK’s income-tax system. But as John Kay says, Tax is always more complicated than you think … Continue reading →

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