Author Archives: Felix

Why Bloomberg Won’t Buy the New York Times

Posted on April 21, 2008 by Felix

Newsweek and the NY Post are today resuscitating one of the perennial rumors in medialand: that Mike Bloomberg will somehow end up buying the New York Times. If the Sulzberger family was amenable – and that’s a big if – … Continue reading →

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Why Private Equity Shops are Recapitalizing Banks

Posted on April 21, 2008 by Felix

Many banks are raising capital these days; the latest to hit the headlines are Washington Mutual, raising $7 billion from TPG, and National City, which is getting something north of $7 billion from a syndicate led by Corsair Capital. Such … Continue reading →

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Costs and Benefits in Education

Posted on April 20, 2008 by Felix

It’s that time of year again, when students are deciding where they’re going to go to college. And the NYT is on the case. Today Greg Mankiw tells us that "the financial return to education" has never been higher: In … Continue reading →

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Branding Art

Posted on April 18, 2008 by Felix

Illinois artist Conrad Bakker, whose art has a habit of raising uncomfortable questions about price and value in the art world, popped round this afternoon on a visit to New York. Conrad makes all his own work – he doesn’t … Continue reading →

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SocGen CEO Finally Resigns

Posted on April 18, 2008 by Felix

Finally. SocGen CEO Daniel Bouton will officially resign as of May 12, and it seems like SocGen’s head of investment banking, Jean-Pierre Mustier, won’t last much longer either. Bouton will remain as chairman, but my guess is that’s a face-saving … Continue reading →

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Lawrence Niren Reappears as a Pig

Posted on April 18, 2008 by Felix

Convicted fraudster Lawrence Niren still hasn’t given up: I just received another fabulously crazy email from him, calling me an "egomaniac liar" and saying that his fake bid for Gold Fields wasn’t fake at all: For your information the Gold … Continue reading →

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Deconstructing Libor

Posted on April 18, 2008 by Felix

Henri, in my comments yesterday, has a smart way of looking at the TED spread. The TED spread between Treasuries and Libor, he says, is the sum of two other spreads: the Treasuries-OIS spread plus the OIS-Libor spread. OIS stands … Continue reading →

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Another Horrible Quarter for Citi

Posted on April 18, 2008 by Felix

Citigroup’s earnings this quarter were horrible. So what’s the reaction? Internally, it seems weak: Citi’s announced the culling of 9,000 jobs, which sounds like a lot until you step back and look at the big picture. As CFO Gary Crittenden … Continue reading →

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JetBlue Pushes PayPal Option

Posted on April 18, 2008 by Felix

As we saw with Frontier, airlines are at risk not only from high jet fuel prices but also from their credit card companies, who have the right to unilaterally hold back a very large percentage of any airline’s cashflow. I’m … Continue reading →

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Extra Credit, Thursday Edition

Posted on April 17, 2008 by Felix

O’Neill Says U.S. `Strong Dollar’ Policy Is `Vacuous Notion’ Food prices: How corn ethanol helps cause riots in Haiti and Bangladesh. A Transit Miracle on 34th Street Merrill’s Muppet Moment

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How Jingle Mail Might Help Make Short Sales Easier

Posted on April 17, 2008 by Felix

Remember youwalkaway.com? It was $995. Sound a bit too expensive? Well, do I have good news for you! Youwalkaway.com now has a competitor, walkawayplan.com, which is only $495! And the new site quotes bloggers, to boot! Apparently, if you go … Continue reading →

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727-727 vs 727

Posted on April 17, 2008 by Felix

A curious postscript to the post below: both the NYT and Slate have slide shows about the Murakami show. Both of them talk about 727-727, and attempt to illustrate it, on slide 10 of the NYT slideshow, and slide 8 … Continue reading →

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A Little Financial Knowledge is a Dangerous Thing

Posted on April 17, 2008 by Felix

The Citi Smith Barney chap at my local Citibank branch is very sweet. Whenever anybody asks to open a brokerage account, he tells them that he’s not a discount brokerage, and that there are lots of discount brokers like E*Trade … Continue reading →

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The TED Spread and the Flight to Liquidity

Posted on April 17, 2008 by Felix

Paul Krugman tries today to explain why he’s so obsessed by the spread between Treasuries and Libor: I got to ask Fed officials about [it], and was told that they preferred the OIS spread, based on Fed funds futures prices. … Continue reading →

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JP Morgan: $6 Billion Capital Raising is “Routine”

Posted on April 17, 2008 by Felix

Joe Giannone managed to get someone at JP Morgan to try to explain what on earth is going on with their $6 billion issue of preferred stock: The bank declined to comment on the transaction, but our sources at JPMorgan … Continue reading →

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Why do Investors Pay Fund-of-Funds Managers?

Posted on April 17, 2008 by Felix

Tim Price isn’t impressed with the way that fund-of-funds managers navigated the volatility of the past 12 months: Hedge funds, often erroneously referred to as an asset class (talent class might be more appropriate, only the phrase smacks of leaden … Continue reading →

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Welch Gets It: Don’t Criticize Your Successor

Posted on April 17, 2008 by Felix

Good on Jack Welch for his loud and public mea culpa both on this morning’s CNBC and in Business Week, after he screwed up big time on CNBC yesterday. His criticism of his successor was pretty harsh, but his backtracking … Continue reading →

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JP Morgan’s Really Weird Capital Raise

Posted on April 16, 2008 by Felix

File under "WTF?": JPMorgan Chase & Co., hours after saying the credit-market crisis is almost over, made plans to raise $6 billion in its biggest offering of perpetual preferred stock, according to data compiled by Bloomberg. The non-cumulative securities priced … Continue reading →

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Extra Credit, Wednesday Edition

Posted on April 16, 2008 by Felix

Here Comes the Next Mortgage Crisis: Add Mark Gimein to the list of people convinced that prime borrowers will walk away from their homes if they’re underwater. Fannie, Freddie Could Hurt U.S. Credit: S&P makes ominous noises about the USA’s … Continue reading →

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Can Restaurants Auction Their Reservations?

Posted on April 16, 2008 by Felix

Adam Platt’s rave review of Momofuku Ko won’t make it any easier to get a table at the white-hot 12-seater in New York’s East Village. But one of the most interesting things about the four stars that Platt awarded the … Continue reading →

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George Bush Gets Good News on Oil

Posted on April 16, 2008 by Felix

George Bush, who wants to slow down the growth of US carbon emissions, got great news today: oil’s over $115 a barrel! I look forward to the White House statement embracing the fact that market mechanisms are sure to reduce … Continue reading →

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The Limits of Market Capitalization

Posted on April 16, 2008 by Felix

Kevin Maney today looks at the mooted $17.7 billion valuation of a merged Delta and Northwest, and contrasts it unfavorably with the market capitalization of Yahoo. "It’s almost hard to believe that all those planes, all those people, all that … Continue reading →

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Merrill’s Six Mistakes

Posted on April 16, 2008 by Felix

The WSJ has a wonderful narrative today of how Merrill Lynch managed to get so badly hit by the mortgage-bond crisis: apparently it’s going to take even more write-downs in the first quarter, making an unprecedented three successive quarterly losses. … Continue reading →

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WSJ.com Gets its Redesign

Posted on April 16, 2008 by Felix

Rafat Ali reports today that after spending "millions" on a redesign, the all-new WSJ.com will launch "in the next few weeks", with a simple aim: "to drive more traffic in a bigger way". At the margin, resdesigns can and do … Continue reading →

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Credit Derivatives Datapoint of the Day

Posted on April 16, 2008 by Felix

Isda: The notional amount outstanding of credit default swaps (CDS) grew 37 percent to $62.2 trillion in the second half of 2007 from $45.5 trillion at mid-year. CDS notional growth for the whole of 2007 was 81 percent from $34.5 … Continue reading →

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