Monthly Archives: April 2008

Attractive Lenders

If I were a chartist, which I’m not, I’m sure I would consider the chart of KKR Financial to be surpassingly ugly. But I had lunch today with Brian McMahon, the CEO and CIO of Thornburg Investment Management, and he’s … Continue reading

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Are There Low-Risk, Low-Return Hedge Funds?

Megan Barnett reckons that all hedge funds are high-risk investments. Because of their performance fees, she says, they’re incentivized to take greater risks because it’s there that the big money lies. I like these arguments from incentives, because they do … Continue reading

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Blogonomics: Narrow Blogs

Liquidity Freeze is, in its own words, A blog following the catastrophic failure in auction rate security markets, concentrating on closed end funds. The author even adds a note saying that anything not associated with closed end funds is "out … Continue reading

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Agricultural Subsidies: Still a Bad Idea

If you want proof that the free-market intelligentsia really doesn’t get what it wants, all you need to do is look at agricultural subsidies. The right hates them because, well, they’re subsidies, and the left hates them because the beneficiaries … Continue reading

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Why Hedge Funds Lose Money in Volatile Markets

Insight from Baruch: The strategists at my beloved employer told the punters, correctly, that this year would see a lot of volatility in equities. So, they said, increase allocation to equity long short, which struck me as precisely the wrong … Continue reading

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The Fight for Yahoo

The more I think about it, the more I like this idea of a joint bid for Yahoo from Microsoft and News Corp. The bits of Yahoo which Microsoft doesn’t want – call them "content", if you like – are … Continue reading

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The Euro Under Attack

Avi Tiomkin has a provocative article in the latest Forbes on "the demise of the euro". His thesis is not only that the euro will fall against the dollar, but that the entire currency will fall apart, and that Europe … Continue reading

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Sheila Bair’s Plan B

FDIC chairman Sheila Bair’s Plan A for modifying troubled mortgages is, by her own admission, not working out very well. But never worry, she’s got a Plan B: One idea is to provide loans directly to troubled borrowers to pay … Continue reading

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Sebastian Mallaby Still Loves Hedge Funds

Every so often over the past few months, as yet another hedge fund or private-equity legend came unstuck, I wondered how Sebastian Mallaby’s book was doing. After writing an astonishingly upbeat article on hedge funds for Foreign Affairs, he decided … Continue reading

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Extra Credit, Wednesday Edition

Survey of economics blog readers: If you have a minute, take it! A Tax Break for Bubble Heads: More problems with the housing bill. The Bear Stearns Tombstone.

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Blogonomics: Leaving Seeking Alpha

I feel I have to mention Barry Ritholtz’s very public abandonment of Seeking Alpha. After they mistakenly edited a couple of his headlines, he put up an anguished post on his personal blog, asking if he should quit the relationship; … Continue reading

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Apollo’s Discount IPO

One thing the stock market has in common with the art market is a very strong allergy against primary-market offerings which have fallen in price from the last time round. It’s one of the reasons why gallerists invariably sell their … Continue reading

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Petrochemical Datapoint of the Day

Darren Rovell is on the baseball-cap beat: New Era raised prices on its 59Fifty hats by $4 last year because of a change in material from wool to polyester. No, that’s not a misprint. Polyester, it seems, is now more … Continue reading

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Wall Street Euphemism Watch

At Citigroup, the guy in charge of firing people is known as the "head of productivity". Someone give Vikram Pandit a bloody shovel already.

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Hedge Fund Losses Blamed on Volatility

There’s more than a little schadenfreude doing the rounds at the news that one of Jim Simons’s funds is down 12% from its peak last May – especially since it’s meant to provide "lower, yet steadier, returns" than your average … Continue reading

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Where Private Equity Meets Public Debt

Back in October, things were so much smaller. The idea then was that KKR would put up $2 billion of equity, leverage it up to a total of $10 billion by borrowing $8 billion from Citigroup, and then use the … Continue reading

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The Greenspan Defense

Have you had enough Alan Greenspan yet? Just in case his interview with Greg Ip today isn’t enough for you, I should also point out his 1,638-word "response to my critics" over at Martin Wolf’s FT.com forum. There are some … Continue reading

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Extra Credit, Tuesday Edition

Jobless Rates by Education: Stay In School! Machiavelli meets the Big Apple: Ten reasons NYC’s congestion pricing plan went belly up. I Cahn’t (turn Motorola around) My Experiment With Incentives: Mike Moffatt used incentives to lose weight. And MSF still … Continue reading

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Which Taleb is Right?

Pablo Triana today wades back in to the Black-Scholes debate, and takes aim at Michael Lewis: Black-Scholes has been blamed in certain quarters for the subprime crisis. Essentially, the argument is that those blinded by the dictates of the model … Continue reading

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Credit Card Datapoint of the Day

Visa is truly the global leader in credit cards. It has a market capitalization of $50 billion, and has a total transaction volume of $3.5 trillion per year: it’s worth about 1.4 cents per dollar transacted annually. Diners Club (remember … Continue reading

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Why it Makes Sense to Give the Fed More Regulatory Powers

Bethany McLean makes a seemingly salient point in the latest Fortune: a year ago, in the Bloomberg-Schumer report, Chuck Schumer was saying that there was too much regulatory red tape on Wall Street. Today, he seems to support Hank Paulson’s … Continue reading

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The Most Depressing Headline of the Day

Congestion Pricing Plan Is Dead, Assembly Speaker Says I hope Shelly Silver finds it impossible to show his face in his own district from here on in.

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The Plunging Schwab Bond Funds

As you might have heard, the largest bond fund at Charles Schwab, YieldPlus, is plunging in price. Suffering from massive redemptions, of the vast majority of its assets, it was forced to sell illiquid mortgage-backed securities at distressed fire-sale prices. … Continue reading

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Housing Datapoint of the Day, Schadenfreude Edition

The Mortgage Bankers Association is having difficulties with its mortgage. (Via Campbell)

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Will Banks Ever Promote Financial Wellness?

There are very few things more stressful than money, whether you don’t have it or whether you do. Money problems destroy relationships every day, and I’m sure that all of my readers can think of quite a few people off … Continue reading

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