Author Archives: Felix

How a Bullish Trade on Subprime CDOs Made Good Profits

Posted on January 14, 2008 by Felix

From Merrill Lynch to Morgan Stanley, everybody who lost boatloads of money on subprime-backed CDOs seemed to be following the same big-picture strategy: they went short the riskiest, most junior tranches of the CDOs, and hedged their bets by buying … Continue reading →

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Why China Doesn’t Want to Invest in Citigroup

Posted on January 14, 2008 by Felix

The WSJ’s Rick Carew reports today that the Chinese government might prevent the latest proposed injection of Chinese capital into a troubled US institution. For a good backgrounder on where the Chinese government is coming from, it’s worth checking out … Continue reading →

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Why Schultz Might Not be Right for Starbucks

Posted on January 14, 2008 by Felix

Jack Flack is underwhelmed by Joe Nocera’s column on Saturday, in which the veteran NYT columnist has a bearish take on Starbucks. I’m more impressed, partly because it came out on the same day as a similar column from equally-veteran … Continue reading →

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Why WSJ.com Will Go Free

Posted on January 14, 2008 by Felix

Last week, Henry Blodget made a good point about WSJ.com going free: The first indication that you WSJ holdouts may not suddenly get your free lunch is this: Murdoch’s owned the thing for several weeks now and it hasn’t yet … Continue reading →

Posted in Media, publishing | 7 Comments

Extra Credit, Monday Edition

Posted on January 14, 2008 by Felix

If, When, How: A Primer on Fiscal Stimulus: "Policies that are potentially most effective include temporary and refundable tax credits, temporary increases in food stamps, and a temporary extension of unemployment insurance benefits. Policies that are especially counterproductive include permanent … Continue reading →

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Steve Jobs on “Pungent Odors”

Posted on January 13, 2008 by Felix

This might be a little off-topic, but it’s too good not to share. It’s from the Fort Greene Kids listerv on Yahoo, where a member shared an email she sent to Steve Jobs: hi steve, i have enjoyed watching apple … Continue reading →

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Ben Stein Watch: January 13, 2008

Posted on January 13, 2008 by Felix

It’s been three weeks since the last installment of the Ben Stein Watch: had no column appeared today, I would have been ready to declare victory. But it was not to be, and a predictably bad column has arrived, along … Continue reading →

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Japanese Garbage Datapoints of the Day

Posted on January 12, 2008 by Felix

The value of indium in Japan’s garbage dumps: $833 million The value of lead in Japan’s garbage dumps: $15 billion The value of silver in Japan’s garbage dumps: $30 billion The value of gold in Japan’s garbage dumps: $178 billion … Continue reading →

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Extra Credit, Weekend Edition

Posted on January 12, 2008 by Felix

Huckabee’s Tax Plan Is Brilliant: Landsburg defends the Fair Tax. Kleiman rebuts. Mozilo severance: $110 million and change Street Smarts: Economists Take on Traffic Safety

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Nick Denton’s task at Gawker

Posted on January 12, 2008 by Felix

I’m quoted* in Allen Salkin’s NYT article on Gawker tomorrow. I thought that he’d place more emphasis on the importance of Gawker’s commenters for generating pageviews, since we talked quite a lot about that, but I guess Sunday Styles doesn’t … Continue reading →

Posted in Not economics | 7 Comments

Trading Recession Probabilities

Posted on January 11, 2008 by Felix

According to InTrade, there’s a 58% chance that the US will see a recession in 2008. That number is higher than the 43% probability assigned to recession by economists polled by the WSJ. But there’s no real discrepancy there, says … Continue reading →

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How to Trade a Bear Market

Posted on January 11, 2008 by Felix

Baruch at Ultimi Barbarorum gives us his tips on how to trade a bear market: Let the Constanza Doctrine be your guide: do The Opposite of what feels good. You are not alone, and at the moments of maximum stress … Continue reading →

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Why FT.com Charges for Subscriptions

Posted on January 11, 2008 by Felix

Jeff Bercovici has an interesting interview today with John Ridding, the chief executive of the Financial Times. He does his best to defend the FT’s weird and counterproductive online pricing model, and it’s worth reading between the lines of some … Continue reading →

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BofA-Countrywide: The Main Street Implications

Posted on January 11, 2008 by Felix

I’m going to be on Fox Business this afternoon at 4pm, talking about the Countrywide acquisition. Befitting the channel’s "Wall Street meets Main Street" concept, I’m sure they’re going to ask me less about the finances of the deal and … Continue reading →

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How Merrill Spun its Write-Down News

Posted on January 11, 2008 by Felix

Shares in Merrill Lynch are flat this morning: investors seem unconcerned about the news that the company will take a whopping $15 billion write-down in the fourth quarter. Last month, after Merrill got a $5.6 billion cash injection from Temasek … Continue reading →

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Why BofA Bought Countrywide

Posted on January 11, 2008 by Felix

Countrywide’s Angelo Mozilo has had many opportunities, over the years, to sell his company for a huge sum to Bank of America. There’s only one reason why he would say yes to a deal now, at $4 billion, when he … Continue reading →

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Extra Credit, Friday Edition

Posted on January 11, 2008 by Felix

RiskMetrics’ IPO promises payoff: Soon, Institutional Shareholder Services will be advising how shareholders should vote on its own parent. NYSE Euronext Is in Talks to Buy Amex Hans Monderman, Engineer of Livable Streets, 1947-2008

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Blackstone: The Stock Buyback Which Isn’t

Posted on January 10, 2008 by Felix

Stock buybacks are good news for shareholders for two reasons. Firstly, they increase demand for the stock, which helps boost the share price – but that effect is one-off, and temporary, and mostly benefits the shareholders who sell their stock … Continue reading →

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BofA-Countrywide: An Acquisition Which Makes Sense

Posted on January 10, 2008 by Felix

Countrywide shares are up over 40% today as the WSJ reports the company might be taken over by Bank of America.
Continue reading →

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The CNBC-PZE Fiasco

Posted on January 10, 2008 by Felix

It’s a fun game, this stock-market malarkey. You watch CNBC, see a talking head recommend a stock ticker symbol, and then jump onto your computer to execute the trade. It’s so easy! And, for all that investors are continually advised … Continue reading →

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Bernanke Now Fully On Board the Rate-Cutting Bus

Posted on January 10, 2008 by Felix

Was Ben Bernanke reading this morning’s New York Times? "Many on Wall Street," wrote Louis Uchitelle, "argue that with the stock market falling, unemployment rising and the economy flirting with a recession, Mr. Bernanke should be dealing with the situation … Continue reading →

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International Capital Flows Datapoint of the Day

Posted on January 10, 2008 by Felix

The most money the IMF ever lent to the emerging world in one quarter: $13.7 billion (Q3, 2001) Total capital infusions from emerging-market sovereigns into US and European banks in Q4 2007: $28.4 billion (Via Setser, natch; he reckons that … Continue reading →

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It’s OK for Tony Blair to Cash Out

Posted on January 10, 2008 by Felix

Yves Smith says that Tony Blair’s decision to work as a part-time adviser to JP Morgan is "reprehensible". I’m more sanguine about it. Yes, the amount that Blair is pulling in is huge: 5 million pounds for his memoirs, millions … Continue reading →

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Can Pandit Cut Citi’s Dividend?

Posted on January 10, 2008 by Felix

In the WSJ report on Citi shoring up its capital base, we’re told that a dividend cut is now a real possibility: The board of Citigroup is expected to meet on Monday, a day before it reports earnings, and to … Continue reading →

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Capital Injections at Citi and Merrill: The Shorter Version

Posted on January 10, 2008 by Felix

The WSJ’s massive front-page story this morning, headlined "Citigroup, Merrill Seek More Foreign Capital", is an important one. But you might well not have time to read the entire 2,365-word article, so let me summarize it for you. Here’s the … Continue reading →

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