Author Archives: Felix

Four Myths About the Stock Market

Posted on January 23, 2008 by Felix

1. Global stock markets plunged this week (until the Fed rode to the rescue) "on recession fears". You can argue the "decoupling" toss as much as you like, but there was absolutely no correlation between the degree that any given … Continue reading →

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Ben Stein Watch

Posted on January 23, 2008 by Felix

Is outsourced to Sandwichman. I don’t do Stein’s Yahoo columns, I’d go mad.

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Extra Credit, Wednesday Edition

Posted on January 23, 2008 by Felix

ISDA Sees Default Swaps Losses at $15 Billion, Not $250 Billion Self-Control, Delusion and Why Subscription Services Rule Wal-Mart Gives The New Yorker (And Forbes, Fortune, BizWeek etc) The Boot Does Senator Clinton Know How Little the United States Spends … Continue reading →

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Bernanke Hits the Panic Button

Posted on January 22, 2008 by Felix

It feels a long time ago right now, but if I recall correctly, Ben Bernanke was talking in a generally positive way at the end of last week about the effects of a well-targeted fiscal stimulus. Well, so much for … Continue reading →

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MBIA: The Longs Fight Back

Posted on January 22, 2008 by Felix

Have you read anything positive about MBIA recently? The short-sellers – principally Bill Ackman, of course, but also Whitney Tilson – have been dominating the conversation, and since they’ve also been making a huge amount of money one can understand … Continue reading →

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Extra Credit, Tuesday Edition

Posted on January 22, 2008 by Felix

For Clinton, Government as Economic Prod: Leonhardt interviews the favorite for the presidency on her economic policy. Why 2008 isn’t 1971 (the first ever Curious Capitalist list!) Just When I Thought I Was Out: The Epicurean Dealmaker vs Martin Wolf, … Continue reading →

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Value-per-Employee Datapoint of the Day

Posted on January 21, 2008 by Felix

Sun has bought MySQL – a company which gives its main product away for free – for $1 billion, or about $2.5 million per employee. Which is pretty much exactly the same valuation per employee as the market puts on … Continue reading →

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Counterfeiting Statistics: Still Atrocious

Posted on January 21, 2008 by Felix

Do you remember the atrocious and disappointing OECD report on counterfeiting? Rather than come up with a realistic estimate for the value of counterfeits traded worldwide, it came out with a hugely exaggerated "ceiling" of $200 billion. All the same, … Continue reading →

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The Politics of Equity Capital Inflows

Posted on January 21, 2008 by Felix

If a country runs a current-account deficit, that means that it’s going to run an equal and opposite capital-account surplus: it’s simple economic mathematics. And when the federal budget deficit is a bit over 1% of GDP while the current-account … Continue reading →

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Gawker’s resurgence

Posted on January 21, 2008 by Felix

I am so losing my bet. Thanks to Tom Cruise, Gawker is going to easily set a new record for pageviews this month. Remember that the old record was 11.5 million pageviews in the month of October; Gawker got 5.3 … Continue reading →

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Blogger Sans Email

Posted on January 19, 2008 by Felix

Blogger disaster! I spent all Friday without any email, and it’s looking increasingly as though it’s not going to get fixed until Thursday at the earliest. This is going to be interesting – especially as I’m meant to be going … Continue reading →

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Extra Credit, Weekend Edition

Posted on January 19, 2008 by Felix

Do we need a recession to purge the rottenness out of our system? It seems the Americans tend to say no, while the Europeans are more likely to say yes. Bloomberg Still Deciding Whether to Buy Presidency: “At this point, … Continue reading →

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Ken Lewis’s Call Option on Countrywide

Posted on January 18, 2008 by Felix

The most recent deal not going according to the merger-arb playbook is Bank of America’s acquisition of Countrywide. The takeover takeunder is valued at $6.47 per share, but Countrywide is trading at only $5.11. How come? Well, have a look … Continue reading →

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Another Hedge Fund Tracker Launches

Posted on January 18, 2008 by Felix

No one would ever design a mutual fund tracker, which returned a little bit less than mutual funds in aggregate. The reason is obvious: mutual funds in aggregate always underperform the market as a whole, so you’d be much better … Continue reading →

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Why Paying for Web Usage Might Make Sense

Posted on January 18, 2008 by Felix

Time Warner is dipping its toe, ever so gingerly, into charging for data downloaded rather than bandwidth. Kevin Maney explains why this makes sense for them: they’re competing, on the video-content front, with online providers. But that doesn’t necessarily mean … Continue reading →

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Telco Merger Datapoint of the Day

Posted on January 18, 2008 by Felix

Dana Cimilluca: When Sprint and Nextel agreed to combine in a “merger of equals” at the end of 2004, they were worth $70 billion together. The current value of the combined Sprint Nextel after the bleak news today from the … Continue reading →

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The Bush Fiscal Stimulus Plan: Looks Good to Me

Posted on January 18, 2008 by Felix

Bloomberg News has some details of the kind of fiscal stimulus George Bush is looking for: The administration is considering a plan that may include $800 rebates for individuals and $1,600 for households as well as tax breaks to encourage … Continue reading →

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MBIA and Ambac Fight for Their Lives

Posted on January 18, 2008 by Felix

Colin Barr: On Friday, analysts at Citi and Bank of America downgraded MBIA and Ambac shares – to hold from buy. Skeptics might note that the move comes with Ambac stock down 94 percent over the past year and MBIA … Continue reading →

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Email down

Posted on January 18, 2008 by Felix

I’m not receiving any email at my felixsalmon.com address, for some reason. If you need to reach me, my temporary email address is felix.salmon at gmail. Email back up. Crisis over.

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Failed Hedge Fund Strategy Du Jour: Merger Arbitrage

Posted on January 18, 2008 by Felix

Last week, I wondered whether Sam Heyman had lost $1 billion on a merger-arb strategy. And now Dana Cimilluca has found a couple of other companies where merger arbs are likely to have lost a huge amount of money, at … Continue reading →

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Extra Credit, Friday Edition

Posted on January 18, 2008 by Felix

Fed Chief Backs Quick Action to Aid Economy Tyler Cowen on inflation, glossed by Aaron Schiff The Pressure Room: The Epicurean Dealmaker explains investment banking. BF Dome In BF Louisiana Gets BS Treatment: The first industrial-scale geodesic dome, built by … Continue reading →

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The Bonus Bet

Posted on January 17, 2008 by Felix

Some loyal readers may recall that back in October I entered into a wager with Jesse Eisinger, who had written in Portfolio that "bonus season this year will make Montgomery Burns look generous". If aggregate Wall Street bonuses fell by … Continue reading →

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Why Merrill’s Falling

Posted on January 17, 2008 by Felix

I liked the Merrill Lynch earnings call this morning, and when I posted my take on it just after the markets opened, it seemed as though the bank’s stock would avoid much in the way of punishment for its enormous … Continue reading →

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Bankers’ Pay: Should be Changed, Won’t be Changed

Posted on January 17, 2008 by Felix

Why pick on banks, and bankers? Steve Waldman tells us: It’s not because they’re bad people. Most bankers are very nice people. We should pick on them because, as Andrew says, banks intermediate. They are a point where all the … Continue reading →

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Why Goldman Sachs was Short CDOs

Posted on January 17, 2008 by Felix

Michael Lewis has a very peculiar column up at Bloomberg today, tied to Kate Kelly’s December 14 WSJ story about the subprime traders at Goldman Sachs. Lewis says that Goldman’s executives essentially overruled their own traders, thereby saving themselves from … Continue reading →

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