Author Archives: Felix

Extra Credit, Friday Edition

Posted on April 4, 2008 by Felix

Counterparty of last resort? Yes, but: Steve Waldman on the Bear rescue. Bush, Vote Buying and the 2004 Elections: Zubin finds another important paper. A Stormy Decade for Citi Since Travelers Merger Apfel hat Logistikproblem! (probably): "T-Mobile cut the price … Continue reading →

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Ben Stein Watch, Expelled Edition

Posted on April 3, 2008 by Felix

I went to a screening of Ben Stein’s new movie this evening. My favorite bit, unsurprisingly, was when the film quoted Pamela Winnick thusly: If you give any credence at all to Intelligent Design, you are just finished as a … Continue reading →

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Are Investment Banks Really Trying to Fix the Auction-Rate Market?

Posted on April 3, 2008 by Felix

The WSJ reports on the market in auction-rate securities today: Last week, UBS said it was marking down an undisclosed amount of the value of auction-rate securities held by its customers. Other banks, including Merrill, aren’t marking down their values. … Continue reading →

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Sovereign Wealth Funds: Still Big

Posted on April 3, 2008 by Felix

Quite impressive, really, the effect that an unpublished research paper by an unknown analyst can have. After the WSJ’s Bob Davis got his hands on a leaked paper about sovereign wealth funds from the Milken Institute’s Christopher Balding, I expressed … Continue reading →

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Silly Idea of the Day: Opening Foreign Brokerage Accounts

Posted on April 3, 2008 by Felix

Abnormal Returns rarely criticises the stories it features in its invaluable daily linkfest. But today’s an exception: Color us skeptical that individual investors should be opening brokerage accounts around the world. (WSJ.com) Boy are they right to be skeptical. Armed … Continue reading →

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Why Silicon Valley Need Not Worry About Increased Regulation

Posted on April 3, 2008 by Felix

Chris Nolan is worried about the unintended consequences of investment banks being regulated: Secretary of the Treasury Hank Paulson was right when he noted on Monday that the reforms he or anyone else envisions will take years to enact. But, … Continue reading →

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How the Housing Bill Could Help New York City

Posted on April 3, 2008 by Felix

A significant beneficiary of the housing bill being voted on by the Senate today could end up being New York City – and other areas with relatively low property taxes. A part of the bill is a flat $1,000 property-tax … Continue reading →

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Geithner Explains the Bear Stearns Rescue

Posted on April 3, 2008 by Felix

Tim Geithner has shed some small amount of light today on exactly what the assets are that the Fed is financing as part of JP Morgan’s acquisition of Bear Stearns. He doesn’t give a detailed breakdown: since BlackRock is in … Continue reading →

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Why Sovereign Wealth Funds Should Invest in Africa

Posted on April 3, 2008 by Felix

I’m a fan of World Bank president Robert Zoellick’s idea yesterday that sovereign wealth funds should invest 1% of their assets in Africa. For one thing, as Zoellick says, this kind of investment makes sense on a purely financial level. … Continue reading →

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Buying Bonds in the Expectation of Technical Default

Posted on April 3, 2008 by Felix

I’m at the Harvard Club today, for a Debtwire conference on distressed debt. The editor of Debtwire, Matt Wirz, just mentioned something very interesting, which he says he’s never seen before: traders and speculators are deciding to buy leveraged loans … Continue reading →

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Extra Credit, Thursday Edition

Posted on April 3, 2008 by Felix

Are we having the right discussion about the financial crisis? Ricardo Hausmann says that if regulations had been tighter, growth would have been lower, meaning real interest rates would have been lower, leading to just as much bad lending. Playing … Continue reading →

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The Capital Infusion League Table

Posted on April 2, 2008 by Felix

This probably looks really good on a Bloomberg screen, but the formatting is all screwy online. (Weirdly, the credit-loss league table looks fine.) So as a public service I’ll republish today’s league table here in a slightly easier-to-read format. Suffice … Continue reading →

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Should the Fed Buy Securities Outright?

Posted on April 2, 2008 by Felix

In a Q&A back in March, Mark Thoma proposed that the Fed should simply buy up distressed assets, rather than simply accept them as collateral: If it were my choice, If I were king of the Fed, I’d do more. … Continue reading →

Posted in fiscal and monetary policy | 1 Comment

West Texas

Posted on April 2, 2008 by Felix

On one’s first trip to Marfa, the tour of Chinati is revelatory enough that you don’t get too annoyed by the restrictions. On one’s second trip to Marfa, the fact that you’re shepherded out of Judd’s masterpiece so that you … Continue reading →

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Bill Ackman’s Brutal Target Losses

Posted on April 2, 2008 by Felix

Equity Private, guest-blogging over at Dealbreaker, has the H2 2007 reports from Pershing Square IV, the Bill Ackman hedge fund devoted to going long Target. Which hasn’t worked out so well. He lost $52,872,231 on Target stock, which is bad … Continue reading →

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Meme of the Week: Food Stamps

Posted on April 2, 2008 by Felix

See here, of course, but also here. Then there’s this, as well as all the commentary on top, in places like this and this and this – all of which apparently has given food stamps Top Buzz. Over/under on the … Continue reading →

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Could Bear Stearns Have Filed for Chapter 11 After All?

Posted on April 2, 2008 by Felix

Does Ben Bernanke know something the rest of us don’t? Here’s a little bit of today’s testimony: On March 13, Bear Stearns advised the Federal Reserve and other government agencies that its liquidity position had significantly deteriorated and that it … Continue reading →

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The Credit-Equity Chart, Revisited

Posted on April 2, 2008 by Felix

This morning I said I’d love to see a chart showing how bond spreads have evolved relative to stock prices, connected chronologically. Next thing I know, this chart arrives in my inbox courtesy of the great Matthew Turner: You start … Continue reading →

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Currency Datapoint of the Day

Posted on April 2, 2008 by Felix

Used to be, Russians loved them their greenbacks. And not any old greenbacks, either: they had to be "new bills with the watermark and large portrait". No longer. Now, they want Chinese renminbi. That’s official policy, that is.

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Grain Conundrums

Posted on April 2, 2008 by Felix

Paul Krugman wonders this morning why food prices in general, and grain prices in particular, have spiked so dramatically: Demand has been rising for a number of years; bio-fuels is a big thing, but how much bigger is it this … Continue reading →

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Chart of the Day: Credit-Equity Divergence

Posted on April 2, 2008 by Felix

Helen Thomas finds this chart in a report from Bank of America: Basically, the x-axis is stock prices while the y-axis is bond spreads. The red dots are What Was: they’re weekly datapoints from June 2002 to June 2007. The … Continue reading →

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Not Much Hope Now

Posted on April 2, 2008 by Felix

The NYT checks in to see how the much-vaunted Hope Now coalition of mortgage lenders is doing, and you probably won’t be surprised at the results: Kenneth Goodman, a homeowner in Fontana, Calif,. said he did not have a good … Continue reading →

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Extra Credit, Wednesday Edition

Posted on April 2, 2008 by Felix

Record gas prices equal record Prius sales: They’re now roughly double Ford Explorer sales. The cautionary tale of Jefferson County Alabama Going for Broke: Surowiecki on how strict bankruptcy laws hurt the economy. Economic News: A new econoblog aggregator. Yet … Continue reading →

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Felix Salmon, Stock Picker

Posted on April 1, 2008 by Felix

This is kinda funny. Some site called SocialPicks seems to have determined that I’m a stock picker, and that this post in particular constituted a sell recommendation on Lehman Brothers. Since Lehman’s gone up since then, my "All-time Return" is … Continue reading →

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Is Iceland the New Bear Stearns?

Posted on April 1, 2008 by Felix

Got some spare cash? Thought about parking it in Iceland? The currency has plunged against the dollar, which means you get more than 77 Icelandic krona to the dollar, up from 65 at the beginning of March. Meanwhile, overnight rates … Continue reading →

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