Author Archives: Felix

Second-Hand Book Datapoint of the Day

Posted on October 24, 2008 by Felix

"Dow, 30,000 by 2008": Why It’s Different This Time, by Robert Zuccaro, is, unfortunately, out of stock at Amazon.com, so you can’t buy it for its cover price of $24.95. But there are three used copies available. One is $48.79; … Continue reading →

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Extra Credit, Friday Afternoon Edition

Posted on October 24, 2008 by Felix

Paulson & Co. Scores Again This Year: His three main funds are up between 15% and 25% this year. FIG vs SHLD vs GS vs GLRE: The hedge-fund plays. If you’re down 40% in the past three months, that’s pretty … Continue reading →

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Germans Suffer from Exposure in Iceland

Posted on October 24, 2008 by Felix

Iceland has three banks. Between them they have $61 billion in liabilities, or about 12 times Iceland’s GDP — which clearly makes it impossible for the Icelandic government to bail them out. But who lent Iceland’s banks so much money? … Continue reading →

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Volatility Datapoint of the Day, Cable Edition

Posted on October 24, 2008 by Felix

Check out what happened to the pound today: it closed at $1.633, and dropped as far as $1.53 before rallying back in the UK afternoon. That’s a ridiculous move for what’s ostensibly one of the world’s major currencies. But if … Continue reading →

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NYC’s Fiscal Crisis

Posted on October 24, 2008 by Felix

How did Mike Bloomberg end up changing the rules so that he could run for a third term as mayor? Let’s ask NYC speaker Christine Quinn: “It’s a piece of legislation and a vote and a choice that is a … Continue reading →

Posted in cities, Politics | 1 Comment

Here We Go Again

Posted on October 24, 2008 by Felix

Wow. I go off the grid for one afternoon, and the world falls apart? Whatever force it was that caused my JetBlue flight to sit on the tarmac for hours yesterday clearly is much more malign than I’d thought, at … Continue reading →

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Should Lehman Have Been Rescued?

Posted on October 23, 2008 by Felix

I have to get on plane to Chicago, so don’t expect much more here any time soon. In the meantime, here’s an IM I just had with John Carney of Clusterstock about whether Treasury was right to let Lehman fail. … Continue reading →

Posted in bailouts | 1 Comment

Ken Heebner, Former High Flier

Posted on October 23, 2008 by Felix

Jim Surowiecki is wondering whether it would make sense to put money into CGM Focus, the formerly high-flying mutual fund run by Ken Heebner, which has managed to lose half its value in less than four months. The answer, I … Continue reading →

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Hank Paulson, Revisionist

Posted on October 23, 2008 by Felix

Did you know that Hank Paulson is one of the most powerless finance ministers in the world? While his counterparties in other countries feel responsible for saving systemically-important banks, Paulson’s hands, until recently, were tied, and he could do nothing … Continue reading →

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Extra Credit, Wednesday Edition

Posted on October 22, 2008 by Felix

30-year Swaps: Look’s like we’ve got a bad transmittor: More craziness in the fixed-income markets. Chartgame.com: How good are you at technical analysis? Running A Country Can’t Be All That Difficult: Paul Wilmott thinks that butlers and footmen should be … Continue reading →

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The Credit Crunch Isn’t a Myth

Posted on October 22, 2008 by Felix

Joe Wiesenthal points to a new paper from the Minneapolis Fed which seems to show that bank lending’s quite healthy. A lot of bank lending is going up, say the authors, and therefore the banking system can’t be in as … Continue reading →

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Idiotic CDS Proposal of the Day, Ben Stein Edition

Posted on October 22, 2008 by Felix

On Sunday, I was quite rude about Karen Shaw Petrou, who thinks it would be a good idea to ban all CDS trading in the future: I explained that total CDS losses would skyrocket as a result, since no one … Continue reading →

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How Originate-to-Distribute Brought Down Wachovia

Posted on October 22, 2008 by Felix

Zubin reckons there’s reason to believe the originate-to-distribute business model wasn’t responsible for the subprime mortgage crisis. He might be right. But I’m not at all convinced by some of his arguments. Consider this one: If you believe that incentives … Continue reading →

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The Lease-Back Bailout

Posted on October 22, 2008 by Felix

David Leonhardt’s column today is about moral hazard in the world of homeowner bailouts: how can we help people who are genuinely having difficulty making their mortgage payments, without needlessly bailing out any old homeowner who’d simply like to pay … Continue reading →

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Why Stock-Market Volatility is Perfectly Natural

Posted on October 22, 2008 by Felix

With the Dow down another 300 points this morning (yawn), we’re all getting used to stock-market volatility. Traders are all psychologists now: "Psychology and emotion are a big part of what moves the market," said Andrew Brooks, head of stock … Continue reading →

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Remuneration Datapoint of the Day, Risk-Free Edition

Posted on October 22, 2008 by Felix

You know that "trader" who got a $2.1 million bonus in 2006 but is suing for another $150,000 on top? Well, he’s not really a trader at all: the FT says that he "has worked for the inter-dealer broking arm … Continue reading →

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Argentina: Sinking

Posted on October 22, 2008 by Felix

Bloomberg has changed its headline from the alarmist "Argentina Default Looms" to the slightly more sober "Argentine Bonds Sink as Pension Takeover Fuels Default Concerns". But it was right, the first time round, as is evidenced by the prices on … Continue reading →

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Extra Credit, Tuesday Edition

Posted on October 22, 2008 by Felix

Fed to Provide Up to $540 Billion to Aid Money Funds: Yet another indication the credit crunch is far from over. Porsche, VW – and hedge funds: Did Porsche engineer a VW short-squeeze? Revisiting the 1932 Economic Yearbook

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Counterintuitive Result of the Day, Brain Drain Edition

Posted on October 21, 2008 by Felix

The past 20 years have not been a good time to be of Indian origin in Fiji. As a result, many Indians in Fiji have emigrated to Commonwealth countries such as Australia, New Zealand, and Canada, making use of their … Continue reading →

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Annals of Counterparty Risk, Tim Backshall Edition

Posted on October 21, 2008 by Felix

Remember this? It’s Friday, March 14, and hedge fund adviser Tim Backshall is trying to stave off panic… Bear Stearns Cos. shares have plunged 50 percent since trading began today, and his fund manager clients, some of whom have their … Continue reading →

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The Global Crisis

Posted on October 21, 2008 by Felix

On Saturday, Brad Setser, following Peter Garnham, made the very important point that while the big countries’ central banks have each others’ backs, emerging-market countries are being left out in the cold. For all the talk about how the G-7 … Continue reading →

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Airline Economics, United Earnings Edition

Posted on October 21, 2008 by Felix

It’s not easy, being an airline. Thanks to high fuel costs, United lost $252 million in the third quarter, on an operating basis. On the other hand, United was hedged. And as a result of those hedges, United ended up … Continue reading →

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Disappearing Stock-Market Earnings

Posted on October 21, 2008 by Felix

Slide of the Day comes from John Mauldin, via Paul Kedrosky: he shows how estimates for the S&P 500’s 2009 earnings have come down from $81.52 in March to just $48.52 now. That’s a drop of 40% in seven months. … Continue reading →

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Towards a Google Buyback

Posted on October 21, 2008 by Felix

I’m generally not a fan of stock buybacks. I’ve hated on the idea in the past, especially as regards high-flying tech stock Apple — but weirdly, I don’t have the same problem with the prospect of Google doing it. CEO … Continue reading →

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The Return of Lending: Still Distant

Posted on October 21, 2008 by Felix

Andrew Ross Sorkin gets an astonishing, if anonymous, quote this morning: “It doesn’t matter how much Hank Paulson gives us,” said an influential senior official at a big bank that received money from the government, “no one is going to … Continue reading →

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