Author Archives: Felix

Negative Convexity at Morgan Stanley

Morgan Stanley was short subprime. Subprime went down. Morgan Stanley lost $3.7 billion on the trade. How is that possible? Morgan Stanley’s CFO, Colm Kelleher, explained it thusly: “We began with a short position in the subprime asset class, which … Continue reading

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CheatNeutral

If carbon offsetting is a joke, you might as well make it funny. (Via Tabarrok)

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Rio Tinto Won’t be Independent for Long

When mergers get mooted, the stock-market reaction is generally predictable: the stock of the target company rises, and the price of the would-be aquirer falls. In the case of the latest proposed mining mega-merger, the stocks followed most of the … Continue reading

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On Auction Houses’ Estimates and Reserves

There’s something I’ve always wondered about auction-house estimates: are they estimating the hammer price, or are they estimating the final sale price, including commission? The auction house press releases, and newspaper reports in the wake of the auction, always talk … Continue reading

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Extra Credit, Thursday Edition

Two for the pot: Citi needs more new hires than just a CEO. The Carbon Calculus: Energy sources which become cost-efficient if you charge for carbon emissions. No government after 149 days and no one notices: [insert obligatory Belgian joke … Continue reading

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Fiji Water goes Carbon Negative

You thought it was cool to be carbon-neutral? Well, Fiji water, one of the most environmentally absurd companies on the planet, has now gone carbon-negative! I’m sure Nigel Tufnel would be proud. Claudia Deutsch reports: The announcement comes after a … Continue reading

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Japan Datapoint of the Day

And you thought it was bad here, in the US: Japan’s housing starts dived 44% in September from the year earlier, the sharpest fall on record, following a 43.3% plunge in August and a 23.4% drop in July. As Brad … Continue reading

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Whole Foods Board Wimps Out, Exonerates Mackey

When the world found out that John Mackey, the CEO of Whole Foods, was a sockpuppet hyping his own stock on internet message boards under an assumed name, it was clear that he should resign immediately. Instead, the Whole Foods … Continue reading

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Toxic Waste Watch: Beware CDO-backed ABCP!

Since when do CDOs borrow money? I’m obviously rather behind the curve here, since I thought that a CDO was basically an unlevered entity which invested in debt. When it got income from that debt, the income would go first … Continue reading

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How to Address a Goldman Sachs Banker

Goldman Sachs is building a new headquarters building which will carry the address 200 West Street. It’s on the west side of the street, on the block between Vesey and Murray. But if you plug the address into Google Maps, … Continue reading

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Bleg: Looking for a Free-Float League Table

Companies like PetroChina and Google, which have a very small free float, have been getting a lot of press for their enormous market capitalizations. Does anybody have a league table of the most valuable companies in the world by value … Continue reading

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PageRank: WaPo Up, Forbes Down, Portfolio beats WSJ

Remember the Great PageRank Massacre, when the Washington Post saw its Google PageRank drop from 7 to 5 overnight? Well, the good news is that WaPo is back, and stronger than ever – it now has a PageRank of 8! … Continue reading

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Wall Street Bonus Watch

Jesse Eisinger emails to say that he’s hopeful about winning our bonus bet, in the wake of stories today in the WSJ and the NYT. Both of them report on projections from executive-compensation experts Options Group and Johnson Associates, and … Continue reading

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Privatizing the Sidewalk

Matt Cooper says that he is "not a privatize-the-sidewalks kind of guy". Why not? It seems to be working pretty well in New York: A 150-square-foot sidewalk berth anywhere between 96th Street and Canal Street costs $4,749.29 annually, about $31 … Continue reading

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The Best Subprime Reporting and Analysis

Jack Flack and Jack Shafer look to the MSM today for help in unscrambling the subprime mess. (Weirdly, however, Shafer asks journalists to nominate the best journalists on this beat, rather than asking genuine housing experts.) In the broader media … Continue reading

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What is a Deferred Tax Credit Noncash Charge, Anyway?

The NYT is a general-interest newspaper, which should be comprehensible to a broad reading public. And certainly me. But even the NYT can’t seem to explain clearly what’s going on at GM. What does this mean? DETROIT, Nov. 7 — … Continue reading

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Extra Credit, Wednesday Edition

GM Watch, Again: Foreclosures and Fees: Tanta on Morgenson. "High rates of foreclosure and bankruptcy are money-losers for mortgage servicers, not profit centers". More Bank, Brokerage Writedowns, Ratings Cuts Inevitable The dollar hits an all-time low against the Deutschmark Price … Continue reading

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Shaukat Aziz as Citigroup CEO!

The Economist places its weight behind Shaukat Aziz as the ideal CEO of Citigroup: The 58-year-old joined Citibank in 1969, and worked in various parts of its global empire—including Britain, Greece and Malaysia—before eventually becoming global head of Citi’s private … Continue reading

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The Economics of A-Rod, Part 2

Why is it that the best place to find high-level microeconomic analysis in the NYT seems to be the sports section? First there was Ed Wyatt on Tour de France breakaways; now comes Columbia’s Jeffrey Gordon on the A-Rod opt-out. … Continue reading

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Australia Datapoint of the Day

John Quiggin: On an exchange rate basis, Australia has a higher GDP per person than does the US. Currently US GDP per person is around $US44,000. Australia’s is about $A51,300, which at a market exchange rate of 0.93 converts to … Continue reading

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Citi: In Defense of Gary Crittenden

Brad DeLong takes a cheap shot at Citigroup’s CFO, Gary Crittenden, who on the Citigroup conference call tried to explain where all those extra write-downs were coming from. Crittenden explained that much of Citi’s subprime exposure was in so-called super-senior … Continue reading

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Lessig at TED

A rare video of one of Larry Lessig’s legendary slide shows on copyright and creativity, this one from the TED conference in March. And this one comes with added Jesus! Enjoy.

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Electricity: Deregulation Sends Prices Soaring

David Cay Johnston’s headline says it all: "Competitively Priced Electricity Costs More, Studies Show". When states deregulate their electricity sectors, the price of electricity goes up, not down – and the attempts of pro-deregulation advocates to spin the data otherwise … Continue reading

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Citi: Is Stuckey Too Constrained?

Jules: You sendin’ The Wolf? Marsellus: Feel better? Jules: Shit Negro, that’s all you had to say. Rick Stuckey is the Winston Wolf of the financial world, screeching into problem areas and cleaning them up with great professionalism and no … Continue reading

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NYT-Bartiromo: The Comedy of Errors Continues

The NYT has corrected its Bartiromo story from yesterday – the one which invented not only a new Citigroup executive called William Rose, but also an "international investment firm" with $60 billion called "Cutter Associates". But they still don’t have … Continue reading

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