Author Archives: Felix

The Return of Stock-Based Compensation on Wall Street

Everything old is new again, as Yves Smith points out with respect to UBS’s bonuses. Apparently the poor Swiss bankers won’t get cash this year: everything above a measly $750,000 is going to be paid in stock. Is this kind … Continue reading

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Extra Credit, Tuesday Edition

Citi’s giant write-downs: What did it know, and when did it know it? Blackstone’s M&A Biz Provides No Relief: You thought Blackstone was an M&A advisory shop as well as a private-equity firm? Turns out, not so much. Also: Blackstone … Continue reading

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E*Trade: In Defense of Prashant Bhatia

Just as one shouldn’t shout "fire" in a crowded theater, one shouldn’t shout "run on the bank" in an analyst’s report. If you do that, as Citigroup’s Prashant Bhatia notoriously did in his report on E*Trade, you risk your report … Continue reading

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Earnings Datapoint of the Day

Ken Rogoff: "If you are earning $540,000 an hour, it does not take too long to save up to buy an apartment, even in London." The sum in question is the minimum amount you need to earn in order to … Continue reading

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Counting Foreign Students

Dani Rodrik gives the NYT a slap on the wrist today for its article saying that foreign students "added to the economy" to the tune of $14.5 billion last year. The article was based on a press release from the … Continue reading

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Holiday Party Datapoint of the Day

Battalia Winston runs its annual survey: 85 percent of businesses will be conducting some type of holiday celebration this year, a nine percent decrease from 2006… In addition, while a majority (54%) of parties will be evening events and 70 … Continue reading

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When Athletes IPO

Remember the jock exchange that Michael Lewis wrote about in the first issue of Portfolio? The idea was that an exchange could be set up where the assets traded were not shares in companies but rather shares in athletes. Well, … Continue reading

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When is a Hedge Not a Hedge?

Allison Pyburn has some numbers on just how much the notorious "super-senior" tranches of subprime-backed CDOs are actually worth in the market. It’s probably no surprise that the junior tranches are changing hands in "the high single digits," but more … Continue reading

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Next Rate Move: Up And Down at the Same Time?

Steve Waldman, provocative as ever, resuscitates a 2002 speech by Ben Bernanke, wherein the future Fed chairman notes that the central bank has more tools at its disposal than simply raising or lowering the Fed funds rate. Specifically, he says, … Continue reading

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The Economist Debates: Bloggers Win!

The Economist has brought its debate series to New York, and the first two debates took place in the magnificent Gotham Hall on Saturday. The first one was on wealth and happiness, and pitched two bloggers (Tyler Cowen and Will … Continue reading

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Ugliness in Industrial Design

Sometimes, good design is good business. Just look at Apple. And sometimes, bad design is bad business: look at Detroit. But sometimes, the beauty of the object plays precisely zero role in purchasing decisions. That’s obviously the case for things … Continue reading

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Ben Stein Watch: November 11, 2007

Ben Stein’s big idea this week is that if banks have taken large losses, their board members should be held responsible. It’s something I’ve said in the past, so I should agree with him, right? But this is Stein, of … Continue reading

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Extra Credit, Weekend Edition

Prince Alwaleed: Why Chuck had to go Redstone: ‘If Content Is King, Copyright Is Its Castle’: The codger comes out swinging. Who’s Afraid of a Falling Dollar?: "For the vast majority of the country, a ‘strong dollar’ is more like … Continue reading

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Deciphering Auction Results

In the wake of my entry yesterday about auction houses’ estimates and reserves, Rik Pike of Christie’s has been very helpful in clearing a few things up for me. For one thing, there’s no doubt that estimates refer to the … Continue reading

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Secrecy in Book Publishing

Between the issues dated January 8 and November 12, nothing by Malcom Gladwell appeared in the New Yorker, and nothing appeared on his blog, either. Gladwell finally broke his silence on Monday: I took a little break from blogging, to … Continue reading

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Stiglitz’s US Datapoints

Vanity Fair gives Joe Stiglitz 4,000 words in its December issue, and he delivers what Andrew Leonard describes as "a stinging, biting, razor-sharp dissection of everything George W. Bush has done wrong as the keeper of the American economy". A … Continue reading

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Carina: The 18-Notch Downgrade

You wondered what would happen when a CDO was forced to liquidate? Now you know: The ratings on the most senior class of Carina CDO Ltd. were lowered to BB, two levels below investment grade, from AAA, while another AAA … Continue reading

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Emilio Botin for Citigroup CEO!

Chalk up another victory for Santander’s Emilio Botín. When I said last month that he was the big winner in the Battle of ABN Amro, I was concentrating mainly on Banco Real, the Brazilian bank that Santander now owns. But … Continue reading

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You Just Can’t Find the Skilled Blue-Collar Workers These Days

When it comes to reasons for electricity prices going through the roof, the inability of your local utility company to find qualified line technicians is not going to be very high up the list. But when it comes to the … Continue reading

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Replica Spam and the Poetry of Karl Marx

Never mind that Murakami boutique at the Museum of Contemporary Art in LA. You only have nine more days to buy a REPL1CA [W4TCH] from the Untitled Project Store, which goes dark on November 18. Regularly priced at $850, it … Continue reading

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Extra Credit, Friday Edition

Deregulated thinking: "Deregulation could be causing higher [electricity] prices. But I suspect it’s only one factor among many, and would look relatively small if you could effectively control for many of the other factors." Bending Ears on Economics as ’08 … Continue reading

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Mystery Stock Update

On Monday I wondered what stock could possibly have been worthless at the end of 2005, but worth $14 million at the end of 2006. A very loyal reader (really: the name on the comment is "averyloyalreader") pointed out that … Continue reading

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Has Nassim Taleb Killed Black-Scholes?

Nassim Taleb and Espen Haug have a paper out. Here’s the abstract: Options traders use a pricing formula which they adapt by fudging and changing the tails and skewness by varying one parameter, the standard deviation of a Gaussian. Such … Continue reading

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The World’s Wost ETF

Greg Newton has found an ETF with the ticker symbol DCR, the MacroShares Oil Down fund. Its net asset value is $7.91 per share, but its price is $14.25 per share: a premium of more than 80%. Yes, I know … Continue reading

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WSJ Circulation: A Correction

I was wrong about the WSJ’s circulation on Tuesday; I got confused by some slightly misleading language in the New York Times. If and when WSJ.com goes free, the newspaper will still have a huge circulation lead over all other … Continue reading

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