Author Archives: Felix

Second-Guessing the Fed, Already

Posted on November 2, 2007 by Felix

The lead article in the print version of the WSJ this morning is headlined "Fresh Credit Worries Grip Markets". Naturally, it leads with the Fed angle: The angst in the financial markets stood in contrast to the views Federal Reserve … Continue reading →

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Extra Credit, Friday Edition

Posted on November 2, 2007 by Felix

$75 Billion Fund Is Seen as Stopgap: The best explanation yet of what The Entity can do, and what it can’t. Another VaR Horror Story: "In Q3, UBS experienced 16 (s-i-x-t-e-e-n) days were losses overshooted daily VaR at the 99% … Continue reading →

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Blogonomics: The Upside of Transparency

Posted on November 1, 2007 by Felix

You won’t be surprised to hear that I think it pays for companies to encourage their employees to blog, and to be as open as possible. But don’t take my word for it. Instead, take the word of Rohit Aggarwal, … Continue reading →

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Jimmy Cayne Declares Victory Over WSJ

Posted on November 1, 2007 by Felix

Cayne, on CNBC, via Dealbreaker: "It’s unbelievable. The phones are ringing off the hook, and everyone wants to play golf with me now." I’m glad it seems to have worked out this way. There are good reasons for a CEO … Continue reading →

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A Question for the Pro-Carbon-Tax Crowd

Posted on November 1, 2007 by Felix

The CBO’s testimony on cap-and-trade is out. Greg Mankiw likes it, because the CBO supports including given-away emissions permits in the national accounts. I don’t like the testimony, becaues the CBO supports the concept of a "safety valve", which defeats … Continue reading →

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Blogonomics: When Blogs Become Books

Posted on November 1, 2007 by Felix

Scott Adams, the multimillionaire creator of the Dilbert comic strip, doesn’t like doing anything which doesn’t make him money. This conflicted with his blogging, the income from which was very small. Fortunately, he was famous enough that a publisher offered … Continue reading →

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Price Restraint

Posted on November 1, 2007 by Felix

One-liner of the day comes (natch) from Tim Price: To be fair to Stan O’Neal, when he promised in December that Merrill Lynch’s $1.3 billion acquisition of subprime mortgage lender First Franklin would provide “revenue velocity”, he didn’t explicitly state … Continue reading →

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Markets: Still Inexplicable

Posted on November 1, 2007 by Felix

You may or may not be aware that stocks are down quite a bit this morning, and, as ever, no one really has the foggiest notion why. David Gaffen, in a market round-up headlined "What Is Going On Around Here?", … Continue reading →

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Merrill’s Board: Asleep at the Wheel

Posted on November 1, 2007 by Felix

With Stan O’Neal out the door, whither the board which supported all of his decisions? Peter Eavis has a good point today: Merrill Lynch’s board is arguably just as culpable for the firm’s atrocious results as the erstwhile CEO was. … Continue reading →

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Chrysler Follows the Strip-and-Flip Playbook

Posted on November 1, 2007 by Felix

The Private Equity Council has what might seem to be a very tough job: persuading lawmakers that private equity principals shouldn’t pay income tax on their income. In reality, however, the job is easier than that – all they need … Continue reading →

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Beware Fund Managers Claiming Trading Prowess

Posted on November 1, 2007 by Felix

Mark McQueen of Wellington Financial is patting himself on the back for staying long Goldman Sachs during the dark days of this summer. "Goldman was the trade of the year," he tells us, in a prime example of the bias … Continue reading →

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How Jimmy Cayne Can Survive the WSJ Attack

Posted on November 1, 2007 by Felix

The WSJ is splashing Kate Kelly’s story about Jimmy Cayne’s part-time leadership of Bear Stearns this summer all over the front page of its newspaper and website. There’s a full spectrum of reactions, ranging from the hoped-for push towards Cayne’s … Continue reading →

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Extra Credit, Thursday Edition

Posted on November 1, 2007 by Felix

Research that aids publicists but not the public "Universal Widgets is not a very interesting company, widgets are not a very interesting product, and Nigel Snooks, the chief executive, is not a very interesting man. But a survey that shows … Continue reading →

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Zipcar Insurance: Solved!

Posted on October 31, 2007 by Felix

Details here. In a nutshell, Zipcar bought Flexcar, and adopted Flexcar’s insurance policies. Hooray!

Posted in Not economics | 1 Comment

Expensive Cities

Posted on October 31, 2007 by Felix

Tim Harford addresses the perennial cost-of-living question: how come Moscow always seems to come top? Or, as his reader puts it, Just wanted to ask if there is an economic explanation for the fact that real estate in cities in … Continue reading →

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Fed Cut Reactions

Posted on October 31, 2007 by Felix

David Gaffen: "The market the Fed continues to brush off is the currency market… The stock market got what it wanted, which was its candy." Stephen Stanley: "This statement has all the subtlety of a sledgehammer. The FOMC has just … Continue reading →

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The Best Newspaper Owner

Posted on October 31, 2007 by Felix

Jon Binder in Chicago writes with a question: What is the best way for newspaper media companies to structure their ownership so they can still generate sustainable profit and inform the public on issues of importance? [public, private, ownership by … Continue reading →

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The Market for Online Business Opinion

Posted on October 31, 2007 by Felix

John Koblin has the scoop: Slate is planning to launch a new site next year, "devoted exclusively to business news and opinion". Slate editor David Plotz is quite right to say that "there’s an opening for a really smart, analytical, … Continue reading →

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Behind the Zipcar-Flexcar Merger

Posted on October 31, 2007 by Felix

The two leaders in the car-sharing business, Zipcar and Flexcar, are merging, in what looks very much like an acquisition of the latter by the former: the Flexcar name is disappearing, while the Zipcar CEO and headquarters are remaining in … Continue reading →

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Insider Trading at Goldman? Very Unlikely

Posted on October 31, 2007 by Felix

Did people named Paulson have all the best information about the mortgage crisis this summer? The Paulson Credit Opportunities fund was up 410% as of the end of August (that’s John Paulson), while now the SEC is reportedly investigating possible … Continue reading →

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Finding a New Merrill CEO

Posted on October 31, 2007 by Felix

As John Carney notes, it’s a little bit weird that Merrill Lynch is now headless – and just as the all-important bonus decisions are being made, too. Why no interim CEO? Carney speculates that no one is willing to do … Continue reading →

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Wall Street Bonus Update

Posted on October 31, 2007 by Felix

As someone who’s personally invested in this year’s Wall Street bonus pool – I have a bottle of Scotch on the line – I was quite happy to turn to page B5A of this morning’s WSJ. (Please, Mr Murdoch, can … Continue reading →

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GDP Report Gives the Fed an Opt-Out From its Rate Cut

Posted on October 31, 2007 by Felix

The 3.9% growth rate in thrid-quarter GDP is only preliminary, but it is very large, and it does give me a little less certain that the Fed is going to cut rates this afternoon. While housing is indeed dreadful, with … Continue reading →

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Extra Credit, Wednesday Edition

Posted on October 31, 2007 by Felix

Housing wealth isn’t wealth: Have you heard much about the "wealth effect" recently? No? Willem Buiter explains why it might not exist anyway. How Big Is Rhode Island, Anyway? Still Demise-ing: "In a world of greater volatility, mean reversion will … Continue reading →

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How Sowood Went Bust

Posted on October 30, 2007 by Felix

The WSJ this weekend came out with its post mortem of Sowood Capital, the hedge fund started by former Harvard high-flyer Jeffrey Larson which imploded spectacularly in July. There’s nothing particularly surprising in the story (too much leverage, not enough … Continue reading →

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