Author Archives: Felix

CDO Datapoint of the Day

Posted on November 20, 2007 by Felix

Aaron Johnson of Total Securitization reports: The first CDO-squared (a CDO of CDOs) has now defaulted. Lancer Funding II was issued by ACA Capital, an insurance company you’ve never heard of but which still managed to record a $1.7 billion … Continue reading →

Posted in bonds and loans | Comments Off on CDO Datapoint of the Day

Meme of the Week: Breaking Up Financials

Posted on November 20, 2007 by Felix

Financial supermarkets sure are out of favor these days. In the wake of an FT report that both Citigroup and Merrill are considering issuing shares in their brokerage arms, the NYT today says that H&R Block could be broken up, … Continue reading →

Posted in stocks | Comments Off on Meme of the Week: Breaking Up Financials

OFHEO’s Part in the Housing Crisis

Posted on November 20, 2007 by Felix

According to the WSJ, Freddie Mac has serious capital-adequacy problems, and they’re basically the fault of the Office of Federal Housing Enterprise Oversight: The losses have left the company with core capital of $34.6 billion as of Sept. 30, only … Continue reading →

Posted in housing | Comments Off on OFHEO’s Part in the Housing Crisis

Expensive ARMs: An Answer

Posted on November 20, 2007 by Felix

On Friday I asked why ARMs were so expensive. I got a few responses, but the best was from an anonymous commenter on Seeking Alpha, "User 122506". His or her comment is worth quoting in full: It seems the lending … Continue reading →

Posted in bonds and loans, housing | Comments Off on Expensive ARMs: An Answer

The USA’s Ridiculous Border Controls

Posted on November 20, 2007 by Felix

In order to keep New York attractive as an international financial center, it has to be reasonably easy for foreigners to get in and out. Not that the Department of Homeland Security seems to care. Already taking two fingerprints from … Continue reading →

Posted in cities, immigration | Comments Off on The USA’s Ridiculous Border Controls

Extra Credit, Tuesday Edition

Posted on November 20, 2007 by Felix

Fed’s Gary Stern Makes Lame Arguments Against Increased Credit Market Regulation Washington Mutual: What I have told you was true… From a certain point of view: A WaMu bond investor’s lament. Fox Business News’s Apple-AMD flub: Apple? Sounds a bit … Continue reading →

Posted in remainders | Comments Off on Extra Credit, Tuesday Edition

The Voluntary Carbon Standard

Posted on November 19, 2007 by Felix

Today marks the launch of the Voluntary Carbon Standard. The VCS is meant to be a kind of Good Housekeeping seal of approval for carbon offsets: if you want to offset your jet-set lifestyle or your new SUV, look for … Continue reading →

Posted in climate change | Comments Off on The Voluntary Carbon Standard

Opec and the Denomination Fallacy

Posted on November 19, 2007 by Felix

Okay, let’s try and make this clear, for the umpteenth time. If countries with large dollar-based foreign-exchange reserves increasingly invest those reserves in euro-denominated assets rather than dollar-denominated assets, that’s bad for the dollar. That’s true whether the country in … Continue reading →

Posted in commodities | Comments Off on Opec and the Denomination Fallacy

Famous Artist + Iconic Painting = High Prices

Posted on November 19, 2007 by Felix

This morning I spoke to Amy Cappellazzo, co-head of the postwar and contemporary art department at Christie’s, to ask her about Richard Prince’s Nurse paintings. How come one sold in London in October for $2.1 million, and then one sold … Continue reading →

Posted in art | Comments Off on Famous Artist + Iconic Painting = High Prices

Subprime Datapoint of the Day

Posted on November 19, 2007 by Felix

The entire market in subprime debt is just 1.4% of the size of global equity markets. Or, to put it another way, a 1.4% downward fluctuation in stocks erases the same amount of value as if all subprime-backed bonds were … Continue reading →

Posted in housing | Comments Off on Subprime Datapoint of the Day

Corporate Tax Revenue Datapoint of the Day

Posted on November 19, 2007 by Felix

John Cassidy: From 2004 to 2006, corporate tax receipts grew at an annual rate of more than 25 percent. Last year, they totaled $354 billion, compared with just $132 billion in 2003. By my calculations, an increase from $132 billion … Continue reading →

Posted in taxes | Comments Off on Corporate Tax Revenue Datapoint of the Day

Microsoft: It’s Not Our Fault Our Operating System Sucks

Posted on November 19, 2007 by Felix

Apple has a very good operating system, but minuscule market share. Windows, by contrast, has a much clunkier operating system, but also much larger market share. So far so boring. But how about this: Microsoft admits that Apple’s operating system … Continue reading →

Posted in technology | Comments Off on Microsoft: It’s Not Our Fault Our Operating System Sucks

How Can Index Funds Beat the Market?

Posted on November 19, 2007 by Felix

Ben Stein loves Dimensional Fund Advisors. They "run the most amazingly successful, low-cost, unmanaged but somehow deep-value index funds I have ever found," he says, adding that "their returns are amazing, and they charge almost nothing." It’s a bit weird: … Continue reading →

Posted in investing, stocks | Comments Off on How Can Index Funds Beat the Market?

Thain’s Pay

Posted on November 19, 2007 by Felix

What does Jack Flack make of the fact that John Thain’s employment contract with Merrill Lynch was filed on a Friday evening? It seems to me that Merrill Lynch was trying to bury its details by having them appear on … Continue reading →

Posted in pay | Comments Off on Thain’s Pay

Pinot Contest

Posted on November 18, 2007 by Felix

Last night, a dozen or so friends and I discovered one of the best-value wines in America. I’ll tell you what it is in a minute. But first, it’s worth explaining how we came to that conclusion: Michelle and I … Continue reading →

Posted in Not economics | 12 Comments

Extra Credit, Weekend Edition

Posted on November 17, 2007 by Felix

CPDO Cash-In Newsflash: The Law Matters! Elizabeth Warren on the Deutsche Bank case. Trusting the birth/death model GM Watch: The Flap Continues: All you ever wanted to know about third-party document custody. It’s interesting, really! What Will $1 Million Buy? … Continue reading →

Posted in remainders | Comments Off on Extra Credit, Weekend Edition

Fannie Mae Datapoint of the Day

Posted on November 16, 2007 by Felix

Peter Eavis, who started the Fannie Mae ball rolling on Wednesday, moves the story further today, with this rather startling and scary datapoint: Using fair value accounting, Fannie Mae’s capital — the company’s net worth — has declined sharply this … Continue reading →

Posted in housing | Comments Off on Fannie Mae Datapoint of the Day

Gay Demographics Datapoint of the Day

Posted on November 16, 2007 by Felix

Gary Gates: Since 1990, the Census Bureau has tracked the presence of same-sex "unmarried partners," commonly understood to be lesbian and gay couples. From an initial count of about 145,000 same-sex couples in 1990, the 2006 data show that this … Continue reading →

Posted in statistics | Comments Off on Gay Demographics Datapoint of the Day

Art Market Datapoint of the Day

Posted on November 16, 2007 by Felix

Alexandra Peers at the fall auctions in New York: All told, the auctions at Sotheby’s, Christie’s, and Phillips de Pury totaled $1.7 billion, compared to $1.4 billion six months ago at a similar round of spring sales.

Posted in art | Comments Off on Art Market Datapoint of the Day

Why Are ARMs So Expensive?

Posted on November 16, 2007 by Felix

A friend of mine is shopping for a mortgage right now, and I just had a very frustrating conversation with her mortgage broker. What I’d like to do is be able to choose between a fixed-rate mortgage and an adjustable-rate … Continue reading →

Posted in bonds and loans, housing | Comments Off on Why Are ARMs So Expensive?

Ignore Short-Term Market Moves

Posted on November 16, 2007 by Felix

Accrued Interest today has a great post about what really drives markets over short stretches of time. He uses the phrase "technicals", by which he means not drawing lines on charts, but rather the simple dynamics of how traders make … Continue reading →

Posted in stocks | Comments Off on Ignore Short-Term Market Moves

Blogging Datapoint of the Day

Posted on November 16, 2007 by Felix

Dan Frommer reports: WordPress is now the No. 2 most-visited blog host, passing rival SixApart’s TypePad last month, according to the latest tally from Nielsen Online. WordPress is the anti-MySpace. It’s clean, easy to use, easy to read, and generally … Continue reading →

Posted in technology | Comments Off on Blogging Datapoint of the Day

Currency Devaluation Datapoint of the Day

Posted on November 16, 2007 by Felix

Justin Fox reads research from Merrill’s David Rosenberg: While the loonie plummeted against the dollar between 1992 to 2002, Rosenberg says, inflation in Canada declined from 4.5% to 1.3%, the short term interest rate set by the Bank of Canada … Continue reading →

Posted in foreign exchange | Comments Off on Currency Devaluation Datapoint of the Day

Did Anyone Other Than Citigroup Have Liquidity Puts?

Posted on November 16, 2007 by Felix

Why hasn’t this "liquidity put" thing gotten greater play? I never made it down to the 11th paragraph of Carol Loomis’s interview with Bob Rubin, where she introduces the concept more than 900 words into her article. Floyd Norris, today, … Continue reading →

Posted in banking, derivatives | Comments Off on Did Anyone Other Than Citigroup Have Liquidity Puts?

Extra Credit, Friday Edition

Posted on November 16, 2007 by Felix

Life, liberty and the right to play online poker: Andrew Leonard watches the Family Research Council’s Tom McClusky get slapped down by Steve Cohen, D-Tenn. Why I’m Prepared to Become Citigroup’s Next CEO: Michael Lewis The making of a UPS … Continue reading →

Posted in remainders | Comments Off on Extra Credit, Friday Edition