Monthly Archives: January 2009

Extra Credit, Thursday Edition

Posted on January 15, 2009 by Felix

Go public? What is Steel Partners thinking? It does seem like a most peculiar time for a hedge fund to go public. Performance related pay for teachers: a dialectic: "Hypothesis: Teachers object to performance-related pay so strenuously precisely because they … Continue reading →

Posted in remainders | 1 Comment

Will Bush Mention the Economy?

Posted on January 15, 2009 by Felix

I just got a White House press release with excerpts from George W Bush’s farewell address to the nation tonight. He seems to have found the time to tell us that "America’s air, water, and lands are measurably cleaner," but … Continue reading →

Posted in Politics | 2 Comments

TED Spread Datapoint of the Day

Posted on January 15, 2009 by Felix

‘Cos we all need some good news today: The TED spread is now in double digits! I wonder how much credit for this is going to be taken by Neel Kashkari. Me, I just call it the moral hazard trade.

Posted in banking, bonds and loans | 1 Comment

Citigroup: Where Was Geithner?

Posted on January 15, 2009 by Felix

The toughest question for Tim Geithner, at his confirmation hearing, will be something along these lines: "The single most important job of the president of the New York Fed is to prevent the collapse of a systemically-important bank. No bank … Continue reading →

Posted in banking, regulation | 1 Comment

The Blogosphere vs Eugene Fama

Posted on January 15, 2009 by Felix

Eugene Fama has only just started blogging, but already he’s run into some fearsome firepower: his post claiming that a stimulus package won’t boost employment has received no fewer than three rebuttals from Brad DeLong alone. The first claims that … Continue reading →

Posted in economics | 2 Comments

Nationalize Citigroup and Bank of America

Posted on January 15, 2009 by Felix

Both Citigroup and Bank of America are down more than 20% in early trade today, and I imagine that Hank Paulson and Tim Geithner are starting work on yet another weekend deal of some description, since at this rate it … Continue reading →

Posted in banking | 1 Comment

The Problems With Mary Schapiro

Posted on January 15, 2009 by Felix

Mary Schapiro is going to face some very tough confirmation hearings on her way to taking over the SEC, and in the wake of a big WSJ article today, her confirmation is by no means a foregone conclusion. Th article, … Continue reading →

Posted in regulation | 1 Comment

When Citigroup Competes With Itself

Posted on January 15, 2009 by Felix

Dear John Thain is getting into the weeds of the Morgan Stanley Smith Barney joint venture, and doesn’t like what he’s seeing. The big problem here, according to DJT, is that Citigroup is intent on keeping its private bank — … Continue reading →

Posted in banking | 1 Comment

JP Morgan: A Better Acquirer than Bank of America

Posted on January 15, 2009 by Felix

Once Citigroup has been broken up, America will have two big financial supermarkets: Bank of America and JP Morgan Chase. There are many differences between them, but a very big one is their track record when it comes to recent … Continue reading →

Posted in banking, M&A | 1 Comment

Extra Credit, Wednesday Edition

Posted on January 14, 2009 by Felix

Brazil’s economic turndown in one easy-to-understand chart: When emerging markets collapse. New York Mag to Writers: You’re Keeping Your Jobs, Getting a Pay Cut: So much for sticky wages. Scared Yet? Chait on WSJ scare quotes. "A mundane fact–say, Paul … Continue reading →

Posted in remainders | 1 Comment

Vikram Pandit is Still a Robot

Posted on January 14, 2009 by Felix

Did you really think that Vikram Pandit would really manage to leave Citigroup without topping his infamous memo from last June? His effort today includes one of the most astonishing sentences ever to emanate from a megabank CEO: We are … Continue reading →

Posted in banking, leadership | 1 Comment

Crazy Ecuador

Posted on January 14, 2009 by Felix

A couple of major developments on the Ecuador front: yesterday, finance minister Elsa Viteri came out with the rather stunning decision that the country would make the coupon payments on its 2015 global bonds — despite deciding to default on … Continue reading →

Posted in bonds and loans, emerging markets | 1 Comment

Spot the Blogger

Posted on January 14, 2009 by Felix

My first appearance on CNBC happened to coincide with the single most important event of the century: Bernie Madoff getting out of a car. So there wasn’t much time to talk about anything substantive, although I did try to chide … Continue reading →

Posted in Media | 1 Comment

How Does One Audit a Fund Manager’s Risk Management?

Posted on January 14, 2009 by Felix

I just got off the phone with Ken Akoundi, a civil engineer turned risk manager who just left fund-of-funds group Optima Fund Management after running its risk-management operations. He agrees with me that some kind of risk auditing function or … Continue reading →

Posted in hedge funds, risk | 1 Comment

Deutsche Results Hit Citi Shares

Posted on January 14, 2009 by Felix

When Citigroup realized it was going to lose much more money in the fourth quarter than the market expected, it decided to leak the news to the press. Deutsche Bank is more grown-up about such things, releasing a "preliminary and … Continue reading →

Posted in banking | 1 Comment

Geithner, Taxed

Posted on January 14, 2009 by Felix

The blogosphere is rumbling about Tim Geithner and his back taxes: Henry Blodget has even put up a post with the headline "Geithner Tax Scandal Threatens To Derail Confirmation". Er, no, it doesn’t. As Blodget himself admits, it’s (a) not … Continue reading →

Posted in Politics | 1 Comment

Extra Credit, Tuesday Edition

Posted on January 14, 2009 by Felix

Wine Auctions Become a Buyer’s Market: Hope springs eternal. "The one thing that the world has proven to us is that when things go down, they only go up higher than ever before." Student auctions off virginity for offers of … Continue reading →

Posted in remainders | 1 Comment

Morgan Stanley Smith Barney Datapoint of the Day

Posted on January 13, 2009 by Felix

How rich are Morgan Stanley Smith Barney’s clients? Consider this: According to the official press release announcing the formation of Morgan Stanley Smith Barney, the new joint venture will have "6.8 million client households globally – with a strong presence … Continue reading →

Posted in banking | 1 Comment

From Citigroup to Citicorp

Posted on January 13, 2009 by Felix

David Enrich says that the new big idea over at Citigroup is "to focus on wholesale banking for large corporate clients and retail banking for customers in selected markets around the world". If that ever happens, I have the perfect … Continue reading →

Posted in banking | 1 Comment

Glossary

Posted on January 13, 2009 by Felix

Josh Giersch has a wonderful financial devil’s dictionary up today. Here are some of my favorites: Correction What stock analysts issue after slapping a "buy" recommendation on a stock that subsequently goes to zero. Credit default swap A financial instrument … Continue reading →

Posted in humor | 1 Comment

Where are the Risk Auditors?

Posted on January 13, 2009 by Felix

As Roger Lowenstein says, Ezra Merkin was (is?) "a Wall Street sage, noted philanthropist and professional money manager". And yet for all his protestations that he was risk-conscious and diversified and an expert at due diligence, he still ended up … Continue reading →

Posted in banking, hedge funds, regulation | 1 Comment

Why Banks Need to Lend Out Their TARP Funds

Posted on January 13, 2009 by Felix

Justin Fox likes Jack Guttentag’s argument as to why it makes sense for banks to sit on TARP funds rather than lending them out. I don’t. Guttentag defines a bank’s capital as "the difference between its assets and its debts", … Continue reading →

Posted in bailouts, banking | 1 Comment

How Safe is Ken Lewis?

Posted on January 13, 2009 by Felix

Oh, the fickle Wall Street Journal. It was so kind last month, when the American Banker named Bank of America’s Ken Lewis Banker of the Year for the second time in six years: If anyone deserved the award, it is … Continue reading →

Posted in banking, defenestrations | 1 Comment

Rental Datapoint of the Day

Posted on January 13, 2009 by Felix

If you want another reason why it’s often better to rent than to buy, even when mortgages are cheap, consider this: rents can go down. A lot. A buddy of mine that works for a private equity shop is renting … Continue reading →

Posted in housing | 1 Comment

Bernanke’s Unconvincing Confidence

Posted on January 13, 2009 by Felix

Ben Bernanke’s speech in London this morning constitutes a clear overview of the various bullets that the Fed has fired into the onrushing crisis. But he starts off with a bold and puzzling claim: I believe that the Fed still … Continue reading →

Posted in fiscal and monetary policy, regulation | 1 Comment