Author Archives: Felix

Treasuries: Steeper

Posted on January 30, 2008 by Felix

Julian Robertson’s big macro bet right now, according to Brian O’Keefe, is a curve steepener. Here’s the idea: In the fall, Robertson invested in a derivative called a "curve steepener" that allows him to be long the price of two-year … Continue reading →

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50bp, Right on Schedule

Posted on January 30, 2008 by Felix

So it was to be 50bp after all: Ben Bernanke has proved himself capable of following through in the two-step rate cut he initiated a week ago, even in the knowledge that cutting 125bp over the course of little more … Continue reading →

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House Prices: The Best and Worst US Cities

Posted on January 30, 2008 by Felix

Justin Fox has another of his very pretty charts today, showing the evolution of house prices in 20 different cities between January 2005 and November 2007. Let’s say I allowed you to go back in time to January 2005 and … Continue reading →

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Bruce Wasserstein is Overpaid

Posted on January 30, 2008 by Felix

Now that’s what I call a bonus. Lazard reported 2007 profits of $122.6 million today, and gave CEO Bruce Wasserstein a bonus of $36.2 million for the year – on top of a restricted-stock grant of $96.3 million. How did … Continue reading →

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Cigarette Smokers For Daniel Bouton

Posted on January 30, 2008 by Felix

Last week, SocGen CEO Daniel Bouton offered his resignation to the board (chairman: D. Bouton) but it was not accepted. Today, SocGen chairman Daniel Bouton, along with the rest of the board, announced the unanimous support of CEO Daniel Bouton, … Continue reading →

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The Credit Crunch and US Politics

Posted on January 30, 2008 by Felix

It’s pretty obvious that the incumbent party is always going to have a harder time being reelected if it’s running during a recession. But a post by John Quiggin today implies that the thing that the Republicans should be most … Continue reading →

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GDP Growth: Low, and Falling

Posted on January 30, 2008 by Felix

We officially didn’t enter a recession in 2007: GDP growth for the fourth quarter was positive, albeit very low at 0.6%. The main engine of growth is still consumer spending, rather than exports, but it’s slowing, contributing 1.4 percentage points … Continue reading →

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Extra Credit, Wednesday Edition

Posted on January 30, 2008 by Felix

Morgan Stanley and the $7 Billion Unknowable: Commercial mortgages are now mark-to-model Level 3 assets. IMF Sees World Growth Slowing, With U.S. Marked Down: But the US will avoid a recession, it seems. Lessening the Reliance on VaR: It’s About … Continue reading →

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WSJ Readers Turn to the Bullish Side

Posted on January 29, 2008 by Felix

What are we to make of the fact that Brian Wesbury’s bullish outlook piece in the WSJ spent much of the day atop the most popular list? The first thought is that it’s a bearish sign: so long as there’s … Continue reading →

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Dreaming of Regulatory Cooperation

Posted on January 29, 2008 by Felix

Roger Ehrenberg has a sensible call for, among other things, "common regulatory frameworks": regulators around the world should all be singing from the same songbook, he says, in order to minimize regulatory arbitrage as well as reduce the "immense friction … Continue reading →

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Markets in Everything, Jingle Mail Edition

Posted on January 29, 2008 by Felix

Are you stressed out about your mortgage payments? Do you have little or no equity in your home? Is your home sinking under the waves of the real estate crash? What if you could live payment free for up to … Continue reading →

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How to Enjoy Your Billions

Posted on January 29, 2008 by Felix

Julian Robertson is making lots of money – and, he says, "it’s wonderfully fun". This is a sentiment one doesn’t hear very often from hedge-fund managers, who tend to have high-stress lives and demanding investors. The solution to that problem? … Continue reading →

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Boris Nurdbongleur Dodges the Credit Crunch

Posted on January 29, 2008 by Felix

Tim Price: Speaking on condition of anonymity, Marti Peeps, a spokesman for the bank, admitted that he was gloomy on prospects for the sector, notwithstanding Societe Bancaire de Neasden’s surprise results. “This has come in the wake of other debacles … Continue reading →

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How Gene Ludwig Forced the Countrywide Sale

Posted on January 29, 2008 by Felix

Why did Countrywide sell out to Bank of America? Because it had to. That’s the message of a very good WSJ piece today, which explains that Countrywide, before its takeover by the Charlotte giant, was essentially throwing itself upon the … Continue reading →

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The Ethical Economy of Meat

Posted on January 29, 2008 by Felix

Tyler Cowen, quoted in this overview of the economics of meat by Mark Bittman, says that while an environmentally-aware meat eater should eat more pork than beef, "it is better for animal welfare to eat cows rather than pigs". In … Continue reading →

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Extra Credit, Tuesday Edition

Posted on January 29, 2008 by Felix

Schmalpha: "Defer to Napoleon’s Law, that, in the absence of empirical data on skill, persistent luck is the best quality to look for in a general, and in a trader". Why Would Presidents Envy Bad Growth? "President Bush’s growth record … Continue reading →

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The Ben Stein Pile-On

Posted on January 28, 2008 by Felix

Marek Fuchs on Ben Stein this week: I have seen a lot of bad business journalism in my day, but nothing as irresponsible and so wholly unsupported by facts. Actually, by even a single fact. See also: Yves Smith, Henry … Continue reading →

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Retail Concepts and the Success of National Chains

Posted on January 28, 2008 by Felix

When I’m given the choice – which is not very often, I must admit – I choose to spend/invest my money as close to home as possible. What does that mean, in practice? That I like to buy gifts from … Continue reading →

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What Hope for Sears?

Posted on January 28, 2008 by Felix

With the news that Sears has now lost Aylwin Lewis, its nominal CEO (the de facto CEO remains its owner, Eddie Lampert), I took the opportunity to ask Jesse Eisinger a few questions via IM about what is going on … Continue reading →

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ADS Takeover Hopes Collapse

Posted on January 28, 2008 by Felix

Busted merger-arb trade of the day is the acquisition of Alliance Data Systems by Blackstone. Blackstone agreed to pay $81.75 per share for ADS, but the market didn’t believe it: on January 18, ADS shares were trading only at $52.82. … Continue reading →

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Jerome Kerviel, Prop Trader

Posted on January 28, 2008 by Felix

It seems to be emerging today that Jerome Kerviel’s job was not nearly as clerical and low-risk as SocGen first made out: his lawyers now claim that his trading was in profit to the tune of €1.5 billion at the … Continue reading →

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Fiscal Stimulus: The Consumption Dilemma

Posted on January 28, 2008 by Felix

Zubin Jelveh has some advice for the IRS on how to spin the upcoming tax rebate so that people will spend it rather than save it. It’s good advice, too – for any politician looking to maximize the bang for … Continue reading →

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How to Monetize Fed Cuts

Posted on January 28, 2008 by Felix

Matt, a loyal reader, emails: If Ben is dropping money from helicopters, how do I get some? We’re not talking about professional money traders here who can simply play in the Fed funds futures market. If you’re a retail investor … Continue reading →

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How Memes Get Started

Posted on January 27, 2008 by Felix

Friday morning, right here at Market Movers: If I had to guess, I’d say that when Kerviel’s position was discovered, he was maybe 1.5 billion or so euros underwater; the rest of SocGen’s losses are just as much the bank’s … Continue reading →

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Ben Stein Watch: January 27, 2008

Posted on January 27, 2008 by Felix

What is it with Ben Stein and his conspiracy theories? When he first started blaming Goldman Sachs traders for causing the market’s sell-off, it was easy to laugh at him. But he doesn’t seem to be letting go, and at … Continue reading →

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