Author Archives: Felix

Extra Credit, Tuesday Edition

Posted on December 11, 2007 by Felix

Baywatch: Bigger than Aid? The Trading Game: Where Losers Can Win and Lose Again: "The mere ability to lose hundreds of millions and wake up in the morning does not a great trader make". Ten things to know about the … Continue reading →

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Why Shuttered Galleries Don’t Mean the Art Bubble is Bursting

Posted on December 10, 2007 by Felix

During the housing boom, the only thing rising faster than house prices was the number of realtors. Yes, a handful of superstar agents became fabulously wealthy and successful. But the median realtor was in many ways worse off than before … Continue reading →

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Takeover Speculation of the Day: JPMorgan to buy Citigroup?

Posted on December 10, 2007 by Felix

When Merrill Lynch put out a research note saying that Bank of America might buy Barclays, Alphaville was not impressed, calling the Merrill research "bolshy" and "spivvy". When CreditSights puts out a research note saying that JPMorgan Chase might buy … Continue reading →

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Google Copies Everything. Is That Legal?

Posted on December 10, 2007 by Felix

Noam Cohen brings up the last taboo subject in the search-engine world: The law has largely been silent on how much copying is fair use by search engines. How much copying? A search engine spiders (ie copies) everything. That’s the … Continue reading →

Posted in law, technology | 1 Comment

The Myth That Lending Rates Rise in Response to Policies

Posted on December 10, 2007 by Felix

There’s a credit crisis going on right now. Credit is what you get when a lender lends money to a borrower. Therefore, any attempt to address any credit crisis is, by definition, going to affect lenders. For pundits of a … Continue reading →

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Recession: A Very Useful Indicator

Posted on December 10, 2007 by Felix

Most people have a good intuitive understanding of first derivatives: you’re going up or you’re going down, you’re going backwards or you’re going forwards. It’s an important distinction to make, and it’s the reason why people focus on the concept … Continue reading →

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Why a Nissan Altima is Faster Than a Ferrari Testarossa

Posted on December 10, 2007 by Felix

The reason why US fuel economy hasn’t improved over the past 20 years is not that cars are becoming less efficient, but rather that they’re becoming bigger and more powerful. If you keep size and weight constant, cars are much … Continue reading →

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Banking: It Pays To Be Conservative

Posted on December 10, 2007 by Felix

It turns out that it’s relatively easy to survive a subprime crisis, if you’re a conservative Swiss bank. The problems at Citigroup and Fannie Mae and Freddie Mac are basically that their losses are eating into their capital, leaving them … Continue reading →

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Barney Frank’s Opposition: It’s Not Hank Paulson

Posted on December 10, 2007 by Felix

Paul Krugman blogged the mortgage-freeze plan on Friday; today he has a column on the subject in the NYT. What’s interesting to me is that the column is so much more partisan than the blog entry was. Krugman’s take on … Continue reading →

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Ben Stein Watch: December 9, 2007

Posted on December 9, 2007 by Felix

Ben Stein dedicates this week’s column to the mistakes he made in 2007. Those mistakes include bad stock picks, bad hotel-room picks, and spending too much money. Weirdly, however, he admits to no mistakes whatsoever when it comes to his … Continue reading →

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Extra Credit, Weekend Edition

Posted on December 8, 2007 by Felix

How big a deal? Paul Krugman on the mortgage-freeze plan. One Perspective on Gas Prices True Story: TED on why fairness opinions are bunk. M&A bonanza: Dollar’s fall delivers takeover bargains

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World Bank Pays Off Nicaraguan Debt at 4.5 Cents on the Dollar

Posted on December 7, 2007 by Felix

Here’s something which hasn’t got a lot of traction in the press: the World Bank has just spent $61 million on paying off a bunch of old Nicaraguan debt dating back to the late 1970s and early 1980s. The amount … Continue reading →

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Free Music: A Good Idea

Posted on December 7, 2007 by Felix

Why is Marek Fuchs hating on Universal today? He says that the dumbest thing he’s seen on Wall Street this week, rating 95 on his Dumb-O-Meter, is Universal’s plan to give away its music over Nokia cellphones. Writes Fuchs: The … Continue reading →

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The “Bailout” Artists: A Roster of Shame

Posted on December 7, 2007 by Felix

I clearly spend too much time reading blogs, because I stupidly thought it was only right-leaning bloggers who would be so thoughtless as to refer to the mortgage-freeze plan as a bailout. Tinbox, however, notes that in fact it’s the … Continue reading →

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Why Does Goldman Sachs Need 10 Acres of Trading Floor?

Posted on December 7, 2007 by Felix

Gari N Corp has a question: Why do investment banks need such big trading floors? Are we talking about one big floor for everyone, or multiple huge floors? I mean, is it just about creating a collegiate atmosphere? Compliance (avoiding … Continue reading →

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Why Apple’s Right to Sit on its Cash

Posted on December 7, 2007 by Felix

The Apple share price seems never to go down. It did have a nasty lurch last month, when the price dipped to $153.76 on November 12 from its high of $191.79 on November 6 – that’s a fall of almost … Continue reading →

Posted in stocks, technology | 6 Comments

A Plea, Part 2

Posted on December 7, 2007 by Felix

Tyler Cowen stops short of calling the mortgage-freeze plan a bailout, so he’s exempt from the last plea. But this kind of thing is still very annoying: There are two main arguments for breaking the loan contracts. The first is … Continue reading →

Posted in housing | 1 Comment

A Plea

Posted on December 7, 2007 by Felix

Please can the punditosphere stop referring to the mortgage-freeze plan as a "bailout"? As Edmund Andrews says in his first sentence on the front page of the NYT today, it isn’t. The FHA’s FHASecure plan, which has existed for ages, … Continue reading →

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The Mortgage-Freeze Plan: Still Very Little Litigation Risk

Posted on December 7, 2007 by Felix

Yves Smith today plays gotcha with the American Securitization Forum, the private-sector group which was instrumental in putting together the mortgage-freeze plan officially announced yesterday. It turns out that the plan is at odds with earlier ASF guidance on loan … Continue reading →

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How Trading Floor Availability Creates Financial Districts

Posted on December 7, 2007 by Felix

John Gapper says that "something about financial centres seems to make them split into different districts" – citing West Kowloon in Hong Kong and Canary Wharf in London as financial districts which have sprung up as alternatives to the historic … Continue reading →

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Extra Credit, Friday Edition

Posted on December 7, 2007 by Felix

It’s Not 1929, but It’s the Biggest Mess Since: "This may not be 1929. But it’s a good bet that it’s way more serious than the junk bond crisis of 1987, the S&L crisis of 1990 or the bursting of … Continue reading →

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Why Lenders Love the Mortgage-Freeze Plan

Posted on December 6, 2007 by Felix

I just got off the phone with a former colleague of mine, who was wondering who the losers are in the subprime freeze. What will this do to the balance sheets of banks and buy-side institutions who ultimately own the … Continue reading →

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Subprime Reading

Posted on December 6, 2007 by Felix

The Milken Institute has chosen today to launch three big studies on subprime mortgages, which certainly makes it timely. In the first one, we’re told that subprime mortgages do help increase homeownership. (Whether that’s a good thing or not is … Continue reading →

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The Subprime Monologues

Posted on December 6, 2007 by Felix

Thanks to the wonders of webcasting, I spent a large chunk of this afternoon listening to president George Bush, Treasury secretary Hank Paulson, HUD secretary Alphonso Jackson, ASF executive director George Miller, FDIC chairman Sheila Bair, as well as men … Continue reading →

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Art Basel Miami Beach Datapoint of the Day

Posted on December 6, 2007 by Felix

From the WSJ’s On the Block blog: At the UBS tent party on the beach behind the Delano Hotel, the fire marshal had be called in by 9 p.m. to control the wealthy crowds supping on shrimp, lobster and caviar. … Continue reading →

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