Author Archives: Felix

Airlines Lose Their Jet Fuel Credit Lines

Another nail in the (legacy) airline industry’s coffin: A credit controller at a leading European multinational oil company told The Times that the oil industry was moving to jet fuel prepayment. “It’s common in the US and it is moving … Continue reading

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ETFs Go Global

It’s taken long enough, but finally Barclays and Vanguard are offering genuinely global ETFs: the iShares MSCI ACWI fund, and the Total World Stock fund, respectively. (The latter’s launching next month.) This is great: rather than having to laboriously construct … Continue reading

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David Leonhardt Buys a House

Many congratulations to David Leonhardt, who has just bought a house in Washington. Leonhardt is the person behind the NYT’s truly wonderful rent vs buy calculator, which should be the first stop of call on the internet for anybody thinking … Continue reading

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Extra Credit, Tuesday Edition

There won’t be much in the way of posting today, I’m afraid. But in the mean time, here are a few things which caught my eye: The Economist on banking risk FT Alphaville on default rates Megan McArdle on own-to-rent … Continue reading

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Ben Stein Watch: May 25, 2008

Ben Stein is worried about oil prices. We know this because he uses words in his column this week like "frightening", "extreme hardship", "overwhelming trouble", "peak oil" (twice), "true crisis", and "emergency". Plus: If we keep acting as if the … Continue reading

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Extra Credit, Friday Edition

Delta-Northwest: Wall Street’s $80 Million Fee Bonanza: Morgan Stanley’s getting $42 million in fees on a $3 billion merger. I guess some people are getting rich in the airline industry. It’s the first time any bank has got more than … Continue reading

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Recession: The Forgotten Indicia

This piqued my interest (via Mike Simonson): Ignorance about recessions has taken hold because of a simplistic idea that a recession is two successive quarterly declines in gross domestic product (GDP), a measure of the nation’s output. The idea originated … Continue reading

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Annals of Pathetic CEO Communications, Moody’s Edition

When a company runs into trouble, it turns to its chairman and CEO (if they are the same person) for leadership. If that person is someone like MBIA’s Jay Brown, he provides it, showing backbone and passion and clarity of … Continue reading

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Wikipedia: A Perfectly Acceptable Data Source

Bess Levin is taken aback by the fact that Morgan Stanley is now citing Wikipedia as a source in its research reports. Why? We’re talking here about a pretty simple chart, showing the price of gasoline in different countries around … Continue reading

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InBev-Bud: The Brazilians Are Coming

There’s an air of inevitability about this InBev bid for Anheuser Busch: it might take a while, it might end up having to be raised, but I have a feeling that, sooner or later, it’s going to happen. When it … Continue reading

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Citi’s Dreadful Succession Planning

Sandy Weill is sniping at Chuck Prince via the FT – again. Why? It makes him look like a petty and bitter old man, rather than any kind of elder statesman of finance. Interestingly, this time he’s not just blaming … Continue reading

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The Art Trading Fund: Getting Desperate

Liz Gunnison has an interesting take on the news that Charles Saatchi has been appointed an advisor to the Art Trading Fund. You might recognise the name: I said twice last summer that it was doomed to fail, and this … Continue reading

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Why ETF-Squareds Are a Bad Investment

Floyd Norris today brings up the question of mutual fund fees, which gives me a good excuse to revisit the ETF-squareds I wrote about yesterday. By coming up with an extra service (quarterly rebalancing) they justify an extra 25bp in … Continue reading

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Extra Credit, Thursday Edition

Amazon – The Stock that Defies Gravity: "Goldman has a novel argument: Amazon has now proven its business model, so itßís safe to assume stable margins going forward. I thought it was supposed to be the other way around." Odd … Continue reading

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Canadian Law: No Friend to LBOs

The news out of Quebec today really is quite stunning: a court has held that bondholders in Canada can effectively block a leveraged buy-out if their bonds will be downgraded to junk (as most are, in such situations). Steven Davidoff … Continue reading

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Annals of Hypocrisy, John Mackey Edition

Thanks to Jeff Cane for alerting me that John Mackey is back, and defending his sockpuppet antics: I strongly believe in the First Amendment of our Constitution and our right as citizens to express our opinions to each other. I … Continue reading

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The Romer-Harvard Affair

If you haven’t been following the peculiar story of Harvard’s failure to poach Christina and David Romer from Berkeley, Shan Wang of the Harvard Crimson has a good round-up. Basically, it was all going to happen, until the very last … Continue reading

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The Economics of Carl Icahn

Carl Icahn has an interesting take on basic macroeconomics: Icahn kicked off his political rant by saying that it would be "devastating" if this country elected a Democratic president… He said that "Obama doesn’t understand the economy," adding that he … Continue reading

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Trickle-Down Economics, Art Edition

There’s been a lot of talk about the UK’s "non-doms": rich foreigners who generally live in very expensive London property, thereby driving up the cost of living for everybody else while paying little or nothing in the way of taxes. … Continue reading

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The Fed Scales Back its Growth Forecasts

A quick note about the new GDP forecasts from the Fed: Policy makers estimate U.S. gross domestic product will increase by 0.3 percent to 1.2 percent this year, compared to the 1.3 percent to 2 percent growth they predicted in … Continue reading

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Is Ben Bernanke Too Inventive?

Steve Waldman has a great description of the powerful and inventive Ben Bernanke today: Our man Ben is like an Amadeus-cum-MacGyver, he’s brilliant, unpredictable, he’ll improvise a Delaware company from paper clips and vacuum up your derivative book with a … Continue reading

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The ETF-Squared: It Reallocates For You

Remember Ron Lieber’s catchy little slogan? "Index (mostly). Save a ton. Reallocate infrequently." Turns out, here’s a new ETF out there which doesn’t just do the indexing for you, it does the reallocation as well. To be precise, there are … Continue reading

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When Hedges Fail

Here’s a gentle reminder for CFOs and risk officers at major international banks: if you hedge your position but you don’t hedge it 100%, then you haven’t fully hedged your position. Last month, it was UBS, which made a decision … Continue reading

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Moody’s Brings In the Lawyers

Moody’s second statement on the CPDO scandal shows – in the wake of their stock falling 16% yesterday and Chuck Schumer breathing fire – that they’re finally beginning grok just how serious it is. The first statement, you’ll recall, merely … Continue reading

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Extra Credit, Wednesday Edition

Stocks Don’t Like Obama: Kudlow descends into self-parody. "This idea of rewarding work instead of wealth is just insane"! Stein’s law, China edition … What can not go on forever: "Chinese exports are still expanding by about $250b a year. … Continue reading

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