Author Archives: Felix

$6.66: The Number of the BEAS

Posted on October 12, 2007 by Felix

Dana Cimilluca notes that Oracle is offering $6.66 billion exactly for BEA Systems, whose ticker symbol is BEAS. He asks whether this is a coincidence. The answer is that no, it isn’t. It’s another instance of tech CEOs being cute, … Continue reading →

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Where are the CROs’ Pink Slips?

Posted on October 12, 2007 by Felix

Rick Bookstaber makes a good point today. Across Wall Street, heads of fixed income have been losing their jobs in the wake of trading losses. Now these men had a job: to take on risk in the fixed-income markets. When … Continue reading →

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Boeing’s Fastener Slowdown

Posted on October 12, 2007 by Felix

Boeing doesn’t seem to be going into much detail about the "parts shortages" which have delayed the rollout of its new 787 Dreamliner by six months. But Jeff Matthews talked to a Boeing supplier a couple of weeks ago, who … Continue reading →

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No Value Added in Citi Shake-Up

Posted on October 12, 2007 by Felix

I’m not a fan of this Citigroup shake-up. The ousted Thomas Maheras might have sat uncomfortably in his co-head role at the investment bank with Michael Klein (co-heads nearly always sit uncomfortably), but he was – is – a very … Continue reading →

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The Wisdom of Crowds

Posted on October 12, 2007 by Felix

There are pundits, and then there are prediction markets. And as a general rule, any prediction market is going to be smarter than any pundit – even especially when the pundit is a blogger with no real money on the … Continue reading →

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There’s No Such Thing as Foreclosure Lite

Posted on October 11, 2007 by Felix

Mark Gimein reckons that a foreclosure on a subprime mortgage isn’t as bad as a foreclosure on a more traditional mortgage, because he’s been reading about subprime borrowers going into foreclosure, and "almost without exception the borrowers the stories cite … Continue reading →

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Argentina to Settle with the Paris Club

Posted on October 11, 2007 by Felix

It’s taken almost almost seven years since Argentina defaulted on its debt at the beginning of 2001, but finally the country looks as though it’s going to agree terms with the Paris Club of bilateral creditors. Argentina owes the Paris … Continue reading →

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Stocks: The Hunt for Causality

Posted on October 11, 2007 by Felix

It’s another day of volatility in the Dow, with an intraday movement of 200 points from high to low in the space of about 90 minutes. Barry Ritholtz is hunting for causality: is it something to do with the oil … Continue reading →

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Bad, Yes. Crisis, No.

Posted on October 11, 2007 by Felix

Charlie Calomiris is a hawk and a bear – a combination which means that his latest paper makes for very interesting reading. It’s entitled "Not (Yet) a Minsky Moment" and the big-picture takeaway is that things are bad, but they’re … Continue reading →

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Philanthropy Without Money

Posted on October 11, 2007 by Felix

Philanthropy is the act of making the world a better place. That can be done directly (by giving anti-malarial bed nets to poor Africans, for instance) or it can be done indirectly (by giving money to people who will use … Continue reading →

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VaR Question of the Day

Posted on October 11, 2007 by Felix

What is the point of Value-at-Risk? Yesterday, in a mildly confused post, I said that if a bank loses more than its VaR six days in one quarter, that’s "a sign of utter cluelessness". In fact, it’s not quite as … Continue reading →

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Inequality Datapoint of the Day

Posted on October 11, 2007 by Felix

From Shanghai-based data group The Hurun Rich List, via Marketwatch: There are currently 106 mainland billionaires, up from 15 last year… The report added that China’s 800 richest individuals have net wealth of $459.3 billion, equivalent to 16% of China’s … Continue reading →

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Madonna Math

Posted on October 11, 2007 by Felix

I understand the thinking behind Live Nation poaching Madonna. Big concert acts like her receive 90% of gross revenues, which means that concert-promotion companies like Live Nation have difficulty making any money: In 2005 and 2006, Live Nation lost $130 … Continue reading →

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Skype: Overvalued or Not?

Posted on October 10, 2007 by Felix

The second-most-emailed Technology story on nytimes.com is "Co-Founder of Skype Defends Its Value" a story published on October 10 but which carries an October 9 dateline. Now back on October 9, the NYT didn’t have this story, but Reuters did. … Continue reading →

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InTrade Plays of the Day

Posted on October 10, 2007 by Felix

Tyler Cowen recommends shorting Thompson: Friday I heard Fred Thompson talk for three minutes, he was so terrible I had to leave the room…. Most of all he has rotten diction (odd for a former actor), plus he had no … Continue reading →

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Short Sharp Strike

Posted on October 10, 2007 by Felix

What is it with these super-short UAW strikes? The one at GM lasted only two days, while the one at Chrysler lasted about six hours. Is it a way for the UAW negotiators to concede gracefully while appearing tough to … Continue reading →

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VaR Datapoint of the Day

Posted on October 10, 2007 by Felix

Morgan Stanley has some of the most sophisticated risk-management systems on planet earth. And yet, somehow, The company disclosed today that daily trading losses during the quarter exceeded the firm’s trading value-at- risk calculation on six days during the quarter. … Continue reading →

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The Uselessness of Zagat’s Cost Estimates

Posted on October 10, 2007 by Felix

Eleven Madison Park is a very good, and very expensive, restaurant. At dinner, the cheapest menu costs $82 per person. A glass of red wine will cost you somewhere between $8 and $26. So a dinner with one drink can’t … Continue reading →

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Hidden Fees in Mortgages and Credit Cards

Posted on October 10, 2007 by Felix

Have you ever wondered where the enormous profits being booked by various bits of the financial sector come from? Elizabeth Warren, whom I interviewed in June, has an excellent blog called Credit Slips which specializes, among other things, in revealing … Continue reading →

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Bonkers Idea of the Day, EM Debt Edition

Posted on October 10, 2007 by Felix

One of the things I love about academic economists is that they have a certain amount of freedom to be utterly bonkers occasionally. The LSE’s Bernardo Guimaraes has a modest proposal up at Vox: rewrite the bonds of developing countries … Continue reading →

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Krugman Datapoint of the Day

Posted on October 10, 2007 by Felix

Tyler Cowen goes searching for Paul Krugman’s lastest book: At my Borders, circa 4 p.m., they hadn’t even unpacked it. "Yeah, we have that in the back somewhere, I haven’t seen it yet." was what the guy said. Cowen reckons … Continue reading →

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Bank Stock Datapoint of the Day

Posted on October 10, 2007 by Felix

On Tuesday, shares in Goldman Sachs closed at a new record high of $239.20 per share. Goldman stock has risen by more than 50% from its August lows – a trajectory, says, Helen Thomas, "we’re more accustomed to seeing on … Continue reading →

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Scotus: Good News on Stoneridge

Posted on October 10, 2007 by Felix

Stoneridge v Scientific-Atlanta is one of those battles where both sides really deserve to lose. But I am very glad that it’s the plaintiffs who are actually losing this one. For all the lobbying surrounding the case, the central fact … Continue reading →

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How to Thin the MoMA Crowds

Posted on October 9, 2007 by Felix

Callen Bair wants to know what can be done to reduce the crowds at art museums. Callen, meet Robert Reich: At a time when the number of needy continues to rise, when government doesn’t have the money to do what’s … Continue reading →

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Taking Net Asset Value at Face Value

Posted on October 9, 2007 by Felix

Do you remember when Dave Neubert bought shares in Countrywide because they were only a little bit rich to book value? That didn’t work out too great. But now he’s back to the single-indicator trade, and is buying the Morgan … Continue reading →

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