Author Archives: Felix

Lehman Will Survive

Posted on March 18, 2008 by Felix

This should be enough to keep Lehman going. The upspin: in the months of December, January, and February, in the face of credit-market chaos, Lehman Brothers still managed to make a substantial profit of half a billion dollars, more or … Continue reading →

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Extra Credit, Tuesday Edition

Posted on March 17, 2008 by Felix

A Subprime Conversation The Economy of Fear: Cassidy is bearish. Economics Blogs Search Bear Stearns tremors – now affecting candle-sticks

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Why The Low Capital Gains Tax? (Redux)

Posted on March 17, 2008 by Felix

Portfolio’s editors, in the April issue of the magazine, tackle the issue of which Bush tax cuts should be left to expire in 2010, and which should be extended. I like the idea of a flat 15% inheritance tax rate … Continue reading →

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The Price-to-Book Lag Table

Posted on March 17, 2008 by Felix

Last Thursday, I printed a price-to-book league table; I thought it would be interesting to see how it has changed, two full trading days later. But as I click around the internet from WSJ.com to Reuters to Yahoo, they all … Continue reading →

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Ben Stein Watch: March 9, 2008

Posted on March 17, 2008 by Felix

I apologize for completely missing Ben Stein’s NYT column on March 9, telling John McCain to balance the budget by raising taxes on the rich. So, for the sake of completeness, here’s a link to it. You might be surprised … Continue reading →

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The Perils of Forecasting

Posted on March 17, 2008 by Felix

Jim Cramer is the new Michael Fish.

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Blogonomics: Should Seeking Alpha Pay its Contributors?

Posted on March 17, 2008 by Felix

Time for a breather from the credit crunch, I think. Instead, let’s head over to Bill Rempel’s No DooDahs blog, where he rails against Seeking Alpha’s business model, and says that Seeking Alpha gets 66 times as much value from … Continue reading →

Posted in blogonomics | 1 Comment

Good News on the Credit Front

Posted on March 17, 2008 by Felix

Accrued Interest has some numbers on banks’ credit spreads, and the news seems to be bad, but manageable. Crucially, they’ve tightened in from the open, and are now only a little bit wider than they closed on Friday. Elsewhere in … Continue reading →

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Why is Bear Stearns Trading at $5?

Posted on March 17, 2008 by Felix

Bear Stearns shares are now trading at $5 apiece: clearly there’s a reasonably large constituency of investors who simply don’t believe that it’s going to be bought for $2 per share. This is definitely one of the weirder merger-arb situations … Continue reading →

Posted in banking, stocks | 3 Comments

The Dow-S&P 500 Divergence

Posted on March 17, 2008 by Felix

Financial sophisticates know that the Dow Jones Industrial Average is a bit of a joke: it’s only 30 stocks, and it’s not even an index. But for historical reasons it retains a grip on the public imagination that the S&P … Continue reading →

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JP Morgan-Bear Stearns: Good News for Architecture

Posted on March 17, 2008 by Felix

In the April issue of Portfolio, Paul Smalera contrasts two new bank headquarters: those of Goldman Sachs, downtown, and Bank of America, in midtown. It’s no contest, really: Bank of America wins hands down. The best news on the bank-headquarters … Continue reading →

Posted in architecture | 1 Comment

Bear Stearns: Let the Lawsuits Begin!

Posted on March 17, 2008 by Felix

That was quick. This morning Paul Kedrosky found some Google ads by lawyers wanting to represent Bear Stearns shareholders; by this afternoon, BearStearnsInvestors.com is up and running. There doesn’t seem to be much hard information there about grounds for any … Continue reading →

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Whither Wall Street’s Most Powerful Woman?

Posted on March 17, 2008 by Felix

"Wall Street’s Most Powerful Woman" is the headline in the April issue of Portfolio, which has yet to hit newsstands. The question is whether she’ll still be there by the time most people pick up the magazine, for the woman … Continue reading →

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Lehman: Battered Hard

Posted on March 17, 2008 by Felix

Now that European markets have closed, it seems that the US markets are taking a decided turn for the worse, with Lehman Brothers unsurprisingly leading the way down: it’s dropped more than 40% so far today and no one knows … Continue reading →

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Is the Bear Collapse Good for Clinton?

Posted on March 17, 2008 by Felix

Might the Bear Stearns collapse be good for Hillary Clinton’s presidential campaign? John McIntyre thinks so: The very serious meltdown in the financial markets is likely to focus the country’s attention on the health, stability and future of the American … Continue reading →

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Bear Karma

Posted on March 17, 2008 by Felix

I just received an IM from a friend: I know some employees at Bear who are truly wiped out. They think it is revenge by the Fed for 1998. He’s talking about the rescue of Long Term Capital Management, which … Continue reading →

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Lehman Thinks Bank Bonds are Cheap

Posted on March 17, 2008 by Felix

Fixed-income analyst Ashish Shah of Lehman Brothers has put out a report this morning urging investors to buy bank debt. "The Fed has finally intervened with overwhelming force," he writes; the regulatory authorities now understand that the time for half-measures … Continue reading →

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Chart of the Day: Fed Lending

Posted on March 17, 2008 by Felix

WCW has this chart, and says of it: Any time that a properly normalized series starts rivaling the freaking Depression, you have to worry. Worry? Yes, I’m worried. But not so much because banks are borrowing from the Fed again … Continue reading →

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Credit Markets: Very Cautious

Posted on March 17, 2008 by Felix

John Jansen is of course the place to go for updates on the credit markets, and something very interesting seems to be happening right now, which is that nothing very interesting seems to be happening right now. Says Jansen: Many … Continue reading →

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You Might Not Own Your Investment Securities

Posted on March 17, 2008 by Felix

One of the weirder aspects of this financial crisis is that in most cases the amount of harm suffered by any given entity seems to have been directly proportional to the degree of financial sophistication that entity had. Structured products … Continue reading →

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Market Open: So Far So Good

Posted on March 17, 2008 by Felix

So that’s not nearly as bad as it might have been. As of 10:00, the S&P 500 is down 1.6%, and the Dow is down less than 1%. JP Morgan is up – that’s really good news. The financials are … Continue reading →

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Is Bear Really Worth Only $2 Per Share?

Posted on March 17, 2008 by Felix

Around the world today, people are looking at each other with a semi-glazed expression on their face, and saying something along the lines of "Dude. $2 a share." As Dennis Berman says, this is what they call on the Street … Continue reading →

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The Fed Needs Credit Confidence to Return. Today.

Posted on March 17, 2008 by Felix

Today could be the single most important day in the history of this credit crunch. Up until now, every major Fed announcement has resulted in a market pop, at least for one day. If in the wake of $30 billion … Continue reading →

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Vikram Pandit Ousts Investment Banking Chief

Posted on March 17, 2008 by Felix

Today is a great day to bury news if you’re an investment bank which isn’t directly caught up in the Bear Stearns collapse. After being forced to bail out his own alternative-investments unit, Vikram has now promoted the head of … Continue reading →

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The Repo Market Crunch

Posted on March 17, 2008 by Felix

Not very long ago, when the market in Fannie and Freddie debt went pear-shaped, I tried to look on the bright side, saying that at this point we’d pretty much run out of formerly-liquid securities which have now gotten credit-crunched: … Continue reading →

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