Author Archives: Felix

FT Story Hammers Moody’s Stock

Posted on May 21, 2008 by Felix

The stock market has spoken: Moody’s shares are down 14% today in the wake of the ratings scandal uncovered by the FT. Portfolio did a good job of rounding up the reactions, including a unwisely dismissive piece by the WSJ’s … Continue reading →

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Car-Commute Datapoint of the Day

Posted on May 21, 2008 by Felix

SAR has a provocative back-of-the-envelope calculation today: At $4.00 a gallon, a minimum wage earner driving the average 15,000 miles a year will spend 25% of his/her after-tax income on gasoline. I’m not sure whether this includes things like the … Continue reading →

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The Economics of DVD Rentals

Posted on May 21, 2008 by Felix

Aaron Schiff says that it’s "very cheap" to rent a DVD in Japan: he pays ¥350 ($3.39) for an overnight new release. Here in Berlin, it’s €3.40 ($5.36) to rent a DVD overnight. But there’s a twist: the headline rental … Continue reading →

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Green Berlin

Posted on May 21, 2008 by Felix

Paul Krugman joins me in Berlin: Consider where I am at the moment: in a pleasant, middle-class neighborhood consisting mainly of four- or five-story apartment buildings, with easy access to public transit and plenty of local shopping. It’s the kind … Continue reading →

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Pimco Datapoint of the Day

Posted on May 21, 2008 by Felix

Bill Gross has enormous latitude to invest his Total Return Fund wherever he likes. But even so, investors who have entrusted that fund with well over $100 billion might raise their eyebrows at this: As of April 30, Gross’s Total … Continue reading →

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The Time Warner Cable Control Premium: $0

Posted on May 21, 2008 by Felix

MarketWatch has a good summary of the rather complex deal by which Time Warner plans to spin off Time Warner Cable. But something here doesn’t make a lot of sense to me. Time Warner currently own 84% of Time Warner … Continue reading →

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A New Moody’s Rating Scandal

Posted on May 21, 2008 by Felix

The FT has an explosive story today about the market in CPDOs, and the way that Moody’s, in particular, rated them. The problem is that CPDOs are so ridiculously complex that this scandal – and it is a scandal – … Continue reading →

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Commercial Real Estate Datapoint of the Day

Posted on May 21, 2008 by Felix

In April last year, the New York Observer declared the GM Building to be "the most valuable building in the world," and quoted Scott Latham of Cushman & Wakefield as saying it was worth more than $4 billion. Today, the … Continue reading →

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It’s Time to Pay Sales Tax Online

Posted on May 21, 2008 by Felix

It’s rare that I unreservedly praise a WSJ column – after all, where’s the fun in that. But Lee Gomes today is entirely correct that the time has long since come for web-based merchants to start collecting sales tax. Do … Continue reading →

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Extra Credit, Tuesday Edition

Posted on May 20, 2008 by Felix

Break up AIG! Robert Thomson Named WSJ’s Managing Editor: To absolutely nobody’s surprise. High-End Homes Sold as Art: I’m quoted in this NPR feature on collectible architecture, which aired on All Things Considered today. Huntington Hartford, A. & P. Heir, … Continue reading →

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CDS Counterparty Risk and the Bear Stearns Bailout

Posted on May 20, 2008 by Felix

Jesse Eisinger points me to David Evans’s 4,400-word article on credit default swaps; he likes it a lot. Me, not so much. If it were shorter, it wouldn’t bother me so much. But if you’re writing at that sort of … Continue reading →

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Rich-Poor Inflation Differentials: Smaller Than You Might Think

Posted on May 20, 2008 by Felix

Steve Levitt helpfully provides a link to the Broda and Romalis paper that Jim Surowiecki references this week, and whose findings I found so startling. After reading the paper, whose findings on inflation rates are by no means easy to … Continue reading →

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Carl Icahn’s Communication Problems

Posted on May 20, 2008 by Felix

Remember last year, when Rupert Murdoch and Harvey Golub played phone tag? Rupert left a message for Harvey on March 29, but Harvey was out of the country. When Harvey returned Rupert’s call on April 4, Rupert was out of … Continue reading →

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Check Forgery Datapoint of the Day

Posted on May 20, 2008 by Felix

Luke Mullins talks to Frank Abagnale, the acknowledged expert on such matters: Check forgery is now at about $20 billion a year, up from about $12.6 billion in 1996. There was an increase in check forgery of over 25 percent … Continue reading →

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Barclays’ Plan B: No Better Than Plan A

Posted on May 20, 2008 by Felix

Is Bob Diamond delusional? Barclays’ top team feels it has earned kudos with the City by walking away from last year’s battle for ABN Amro, which was bought by a consortium led by RBS for ߣ47bn. Um, walking away? That’s … Continue reading →

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The Cheap Pennsylvania Turnpike

Posted on May 20, 2008 by Felix

What kind of effect has the credit crunch had on the formerly-frothy market for infrastructure investments? As money becomes scarcer, the price tags attached to future-cashflow investments like toll roads would normally go down. But there was always another possibility: … Continue reading →

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Extra Credit, Monday Edition

Posted on May 19, 2008 by Felix

Shiller on the Psychology of Foreclosure: A Tanta classic. Spot the Contradiction: Tabarrok on Gross on Sachs. Auction-Rate Collapse Costs Taxpayers $1.65 Billion Why your internet experience is slow: Because of the need to sell pretty ads against the content … Continue reading →

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Mark-to-Model Datapoint of the Day

Posted on May 19, 2008 by Felix

The gimlet-eyed SAR found this gem in a Bloomberg story from Friday: Potential homeowners approved by [Fannie Mae’s] automated computer program will be able to borrow up to 97 percent of the value of the property, the company said… The … Continue reading →

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China (and Inflation) Datapoint of the Day

Posted on May 19, 2008 by Felix

Jim Surowiecki: According to the Yale economist Peter K. Schott, machinery and electronics products made in developed countries sell in the U.S. for four times the average price of Chinese products. And, since the late nineteen-eighties, that price gap has … Continue reading →

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Chart of the Day: Credit Losses Per Employee

Posted on May 19, 2008 by Felix

Here Is The City has put together this chart of credit losses per wholesale-banking employee, and it’s quite eye-opening, even if you discount the Mizuho outlier: Wachiovia, UBS, and Citi have all managed to rack up more than $1 million … Continue reading →

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Blogonomics: Integrating Acquisitions

Posted on May 19, 2008 by Felix

Stephen Dubner is a journalist (he has written mainly for the NYT) who is now blogging for the NYT. And so it’s interesting to me what he did when given the opportunity to break some news: The other day, I … Continue reading →

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Getting it Backwards

Posted on May 19, 2008 by Felix

The FT reports: Cowotinam of the US, known for its ice-dispensing equipment as well as its Niatop tower cranes, again upped its bid for Britain’s Sidone, which controls a range of catering brands… Actually, I reversed all the company names … Continue reading →

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The Risks of an Argentine Financial Crisis

Posted on May 19, 2008 by Felix

Finally! A good old-fashioned emerging-market currency crisis! Well, possibly, anyway. The WSJ headline says it all: Argentines Rush to Buy Dollars Amid Fear of a Financial Crisis This, if it happens, will turn out to be the most-forecasted crisis in … Continue reading →

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Extra Credit, Sunday Edition

Posted on May 18, 2008 by Felix

In Reversal, Microsoft Proposes New Deal to Yahoo: Here we go again. Solving the climate change attitude mystery: Why only 19% of college-educated Republicans believe in anthropogenic global warming. Condé Nast/Wired Acquires Ars Technica: There’ll be more about this on … Continue reading →

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Why Cap-Weighted Funds Aren’t for Everyone

Posted on May 18, 2008 by Felix

Joe Nocera finds himself enmeshed this week in a rather arcane fight within the world of index funds: the one between cap-weighted funds, on the one hand, and fundamentally-weighted funds, on the other. Nocera ultimately dodges the question – "they’ve … Continue reading →

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