Author Archives: Felix

Extra Credit, Thursday Edition

Posted on March 13, 2008 by Felix

What Role did Langone Play in Spitzer’s Fall? Time travel & real interest rates The Scalps of the Credit Crunch

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Why Bonds are Unloved by the Media

Posted on March 12, 2008 by Felix

Dear John Thain pleads with the financial media to stop with the stock-market obsession, already: The S&P 500 represents about $13 trillion (slightly lower, as of this posting). The bond market, though, is over $27 trillion dollars (a statistic from … Continue reading →

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How the CDS Market Can Support the Bond Market

Posted on March 12, 2008 by Felix

I’m glad that Equity Private quoted herself yesterday, because I missed this the first time round: Are we surprised when people point fingers at Bear and suggest, for instance, that they are buying up the underlying assets and loosening credit … Continue reading →

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Cramer on Spitzer

Posted on March 12, 2008 by Felix

Just, wow. Cramer as you’ve never seen him before. (HT: Levin.)

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Never Lend Money to Gisele Bundchen!

Posted on March 12, 2008 by Felix

Enrichetta Ravina studied 11,957 loan requests from 7,321 borrowers and concluded: Borrowers whose appearance is rated above average are 1.41 percentage points more likely to get a loan and, given a loan, pay 81 basis points less than an average-looking … Continue reading →

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The Latest Argentine Default

Posted on March 12, 2008 by Felix

Sovereign debt has long had a semi-fluid system of seniority, what Anna Gelpern calls a "seating chart". Back in the 1980s, countries were generally pretty happy to default on foreign bank loans. They occasionally defaulted to their fellow governments, too, … Continue reading →

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The Fool of Last Resort

Posted on March 12, 2008 by Felix

The Fed is worried about a lack of liquidity in the credit markets. The Fed acts to make the markets more liquid. Is the Fed’s action foolish? We hope so! We like to think: "market — trade — liquidity — … Continue reading →

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Spitzer: The Monoline Angle

Posted on March 12, 2008 by Felix

It looks very much as though Eliot Spitzer is toast right now: the NYT is reporting that he’s expected to resign this morning. If and when that happens, whither the monoline insurers? Gari does some analysis: It’s interesting to note … Continue reading →

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Misleading Chart of the Day: Credit Premia

Posted on March 12, 2008 by Felix

Martin Wolf appends this chart to his most recent column. It shows the well-known-by-now interbank spread – the way that Libor has gapped out relative to central bank rates – and tries to decompose it into two parts: a credit … Continue reading →

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US Default Risk Soaring

Posted on March 12, 2008 by Felix

Shorting subprime? That was a good idea. Or shorting agencies, or any other credit product, for that matter. But shorting US Treasuries in July? That, surely, would have been pretty disastrous. Unless, that is, you went short not directly, but … Continue reading →

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Extra Credit, Wednesday Edition

Posted on March 11, 2008 by Felix

Just think, the fees you could charge Buffett: "Over a sufficiently long time horizon, your investment manager will become richer than you". Will It Work This Time? "By my count, this is the ninth time since August that the Fed … Continue reading →

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Stock Volatility Datapoint of the Day, Part 2

Posted on March 11, 2008 by Felix

You might have noticed some large moves in the stock market today: the Dow rose over 400 points. Is this an Important Event, or is it just market noise? Commenter Danw thinks it’s the former, telling me that I am … Continue reading →

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CDOs and SIVs in a Legal Shambles

Posted on March 11, 2008 by Felix

Arturo Cifuentes says that it’s not just the bankers and the ratings agencies who bollixed up the alphabet soup of debt products which are now imploding. It’s the lawyers, too: More than 100 collateralised debt obligations (CDOs) and structured investment … Continue reading →

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Stock Volatility Datapoint of the Day

Posted on March 11, 2008 by Felix

Bear Stearns stock today has traded between a high of $68.24 (before the Fed’s new facility was announced) and a low of $55.42. That’s an intraday move of $12.82 per share, or more than 23% of Bear’s value at its … Continue reading →

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Chart of the Day: Microfinance Fund Performance

Posted on March 11, 2008 by Felix

If you invest your money in microfinance funds, you’re doing good. But are you doing well? The World Bank seeks to answer that question today, by releasing the first performance figures on how microfinance investment funds are doing. And it … Continue reading →

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TSLF: TAF for Investment Banks

Posted on March 11, 2008 by Felix

So you still want to know the difference between the TAF and the TSLF? Over at Interfluidity, "livingstone guy" explains: The new repo line you talk about is nothing more than the TAF for the brokers who dont have access … Continue reading →

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Auction-Rate Securities: No Danger to Silicon Valley

Posted on March 11, 2008 by Felix

It’s like Telephone (Chinese Whispers) in the blogosphere today. First there’s a sober report on Venture Wire warning that "cracks of the economy" might affect the VC industry: Perkins said VCs need to be aware of the "cracks of the … Continue reading →

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Spitzer’s Resignation Odds

Posted on March 11, 2008 by Felix

The SPITZER.RESIGN.MAR08 contract at InTrade has been trading between 80 and 90 today, with the last trade at 85: essentially, the market is saying that there’s a 15% probability he won’t resign by the end of the month. Obviously, there … Continue reading →

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Vikram Pandit Forced to Bail Out His Own Unit

Posted on March 11, 2008 by Felix

How great of an executive is Citigroup’s Vikram Pandit? Well, he’s good at making a lot of money: he sold his young hedge-fund shop, Old Lane Partners, to Citi for something north of $600 million. Old Lane was then incorporated … Continue reading →

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The NYPL Respects Schwarzman’s Stature

Posted on March 11, 2008 by Felix

I’m working today out of what I sometimes call my "midtown office" – the magnificent reading room on the top floor of the New York Public Library on Fifth Avenue and 42nd Street. Which will soon be called the Stephen … Continue reading →

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Bernanke Invents a New Weapon

Posted on March 11, 2008 by Felix

Do you know your TAF from your TSLF? Frankly, it doesn’t matter if you don’t. Think of Ben Bernanke as action hero: every time the credit markets seize up and threaten to bring down the US financial system, he pulls … Continue reading →

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Pastorini/Niren/Roxford Convicted of Fraud

Posted on March 11, 2008 by Felix

I love this story: Theodore Roxford, accused by U.S. regulators of making bogus bids for companies including Sony Corp., was ordered to pay $900,000 by a judge, who also denied the Canadian man’s request for “execution by firing squad.” I … Continue reading →

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SocGen gets its New Equity Capital with Ease

Posted on March 11, 2008 by Felix

The €5.5 billion SocGen rights offering has received more than €10 billion in demand, putting to rest any doubt about the bank’s ability to survive the Kerviel crisis – and also proving that banks have more options than simply running … Continue reading →

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CDOs: Dead. CLOs? Not So Much

Posted on March 11, 2008 by Felix

Vipal Monga takes a look at the CDO and CLO markets, and asks: are they really dead? Or just taking a breather? He draws the conclusion that they’re very different animals. CLOs, he says, are crucial to the loan market: … Continue reading →

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Extra Credit, Tuesday Edition

Posted on March 11, 2008 by Felix

Return of Capital: Accrued Interest on the cheapness of agency bonds. What Went Wrong…and Right: "Bumbling rubes somehow got control of major banks…and lost billions!" Your Oil Datapoint of the Day: Oil companies made $10 million last year. Per hour. … Continue reading →

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