Monthly Archives: November 2008

Zimbabwe Datapoint of the Day

Posted on November 19, 2008 by Felix

Steve Hanke is mainly known in the world of international economics for his conviction that dollarization is the cure for all ills. (How’s that working out, Steve?) But he’s come up with something really rather fabulous for the Cato Institute: … Continue reading →

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Extra Credit, Wednesday Edition

Posted on November 19, 2008 by Felix

Let Detroit Go Bankrupt: Mitt Romney joins those wanting the government to provide post-bankruptcy financing and warranty guarantees, rather than bailing out GM bondholders. A Housing Fix with the Right Incentives: Jed Graham on how the government can become a … Continue reading →

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Will Berkshire Lose its Triple-A?

Posted on November 19, 2008 by Felix

On the face of it, recent activity in Berkshire Hathaway makes little sense. Credit default swaps on the triple-A company were trading at 388bp yesterday, and are somewhere over 450bp today, possibly having risen as far as 560bp this morning. … Continue reading →

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Citi: From Bad to Worse

Posted on November 19, 2008 by Felix

Shares in Goldman Sachs are down 3% this afternoon to a new low of just $60 a share — a level not seen since 1999. To give you an idea of the straits that the financial sector is in, Goldman … Continue reading →

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Yet More Paulson Revisionism

Posted on November 19, 2008 by Felix

The second part of David Cho’s interview with Hank Paulson features even more revisionism. Get a load of this: Paulson used his influence within the administration to win even broader powers from Congress, allowing him to nationalize major financial institutions, … Continue reading →

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Investing in Africa and Ecuador

Posted on November 19, 2008 by Felix

Paul Collier has started giving investment advice. His big idea, as glossed this speech, is that poor resource-rich countries, such as a lot of African states, are largely immune from the global financial crisis since they were never really part … Continue reading →

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Blogonomics: Conflicts of Interest

Posted on November 19, 2008 by Felix

Dan Abrams’ new shop — a kind of Gerson Lehrman for media professionals — claims that it will "bend over backwards to make sure that there are no conflicts or ethical issues that arise", but that hasn’t stopped Gawker’s Ryan … Continue reading →

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The Return of the $70 Per Hour Meme

Posted on November 18, 2008 by Felix

You might expect it from right-leaning commentators like Will Wilkinson. You wouldn’t expect it from someone like Mark Perry, who lives in Flint, Michigan. And you certainly wouldn’t expect to see it in the New York Times, from the likes … Continue reading →

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Extra Credit, Tuesday Edition

Posted on November 18, 2008 by Felix

The 11 Blunders of Hank Paulson The Decline and Fall of the S.E.C. More troubles emerge among derivatives: Negative 30-year swap spreads. A Risk Worth Taking: Dan Gross with nice things to say about Community Development Financial Institutions, such as … Continue reading →

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Yes, Fund Managers Really Do Underperform

Posted on November 18, 2008 by Felix

Last summer, Baruch, Zubin, and I got into a discussion about the oft-cited statistic that 75% of fund managers underperform their benchmark. Is it true? Baruch concluded that no one really knows where it came from: "it seems the 75% … Continue reading →

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The Deteriorating Bond Market

Posted on November 18, 2008 by Felix

Accrued Interest has a great blog entry today on the implications of the big secular shift in the bond market, away from hedge-fund-driven leveraged relative-value plays and towards long-term real-money investing. No longer is it likely that arbitrages even of … Continue reading →

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Watches: Don’t Trust the Auctions

Posted on November 18, 2008 by Felix

Of all the weird alternative asset classes to be invested in, could watches have been one of the best? A 1963 Patek Philippe just sold at Christie’s in Geneva for $800,000 — a record for a yellow-gold watch. But as … Continue reading →

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Tradesports, RIP

Posted on November 18, 2008 by Felix

Tradesports, one of the most venerable real-money prediction markets, has closed. I’m not sure what this means for spin-off site InTrade, which recently increased the cost of withdrawing funds. But it can’t be good news, especially now that US election … Continue reading →

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Hank Paulson, Serial Revisionist

Posted on November 18, 2008 by Felix

First, Hank Paulson said that he wasn’t willing to use government money to rescue Lehman. Then he said that he would have loved to save Lehman, but he didn’t have the powers. Now he’s on his third version: he did … Continue reading →

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How a Bankrupt GM Should Merge With Chrysler

Posted on November 18, 2008 by Felix

Yesterday I sketched out a possible financial plan for how GM might be restructured within bankruptcy. Today, Andrew Ross Sorkin provides the other side of the coin — the operational side of things. Which, in his plan, includes a merger … Continue reading →

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Extra Credit, Monday Edition

Posted on November 17, 2008 by Felix

Unfair Disclosure: Companies Still Not Posting To The Web Goldman, Morgan Stanley sink; analysts cut outlook: Although the price targets are still multiples of where the stocks are now trading. As they say, how’s that working out? Insider Trading, or … Continue reading →

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The Economics and Ethics of Mortgage Default

Posted on November 17, 2008 by Felix

Noel Sheppard is mad at Kathleen Pender for educating consumers about their financial options. Pender’s article is headlined "Are you an idiot to keep paying your mortgage?", and, yes, Joe, it does lay out a pretty strong argument in favor … Continue reading →

Posted in housing | 1 Comment

Ecuador Approches Default

Posted on November 17, 2008 by Felix

Here we go again. A brief history: as soon as he was elected, back in 2006, Ecuadorean president Rafael Correa started making entirely-predictable noises about defaulting on his country’s bonds. (He’d said he’d do just that throughout his presidential campaign.) … Continue reading →

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Art Auctions: The End of Seller’s Rebates

Posted on November 17, 2008 by Felix

I wonder whether Edward Dolman is one of those people who, long after they’ve left home, casually drop into a conversation with their parents that they’ve stopped smoking cigarettes — having never admitted, in the prior years, that they were … Continue reading →

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Against Big, Public Banks

Posted on November 17, 2008 by Felix

Alexander Campbell is beginning to think that publicly-listed banks might not be such a good idea after all: The UK’s mutual building societies spent decades being humdrum, unexciting, unambitious – and solvent. Then they all demutualised, as more than one … Continue reading →

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Food: Against Self-Sufficiency

Posted on November 17, 2008 by Felix

Jim Surowiecki wants to turn the agricultural clock back to the days when countries forced their agricultural producers to feed only a national, not an international, consumer base: When prices spike as they did this spring (for reasons that now … Continue reading →

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Great Moments in Corporate Sponsorship, GM Edition

Posted on November 17, 2008 by Felix

The Onion News Network has a video up headlined "In The Know: Should The Government Stop Dumping Money Into A Giant Hole?". It’s sponsored by Saab, a wholly-owned subsidiary of General Motors.

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GM: An Alternative to Bankruptcy

Posted on November 17, 2008 by Felix

Antony Currie says that it’s possible to structure a GM bailout so that it behaves like a bankruptcy without being called a bankruptcy: If an official bankruptcy label is really too scary, another template already exists: the government bailout of … Continue reading →

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Euphemism of the Day, Unemployment Edition

Posted on November 17, 2008 by Felix

If you thought "right-sizing" was bad, check out how the real pros spin lay-offs over in Silicon Valley: Tesla Motors CEO Elon Musk told Dan Lyons, with a straight face, that he was "raising the bar on talent". Yes, that’s … Continue reading →

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Dr Phil’s Deregulatory Prescription

Posted on November 17, 2008 by Felix

Phil Gramm, Ph.D. (Econ): “There is this idea afloat that if you had more regulation you would have fewer mistakes,” he said. “I don’t see any evidence in our history or anybody else’s to substantiate it.” He added, “The markets … Continue reading →

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