Author Archives: Felix

Pandit: Still Going in Circles

Gary Weiss profiles Vikram Pandit in this month’s magazine, and his conclusion seems spot-on: What Citigroup needs now is not a wannabe Sandy Weill but someone with the elusive qualities needed to revive the banking giant from its slump. Pandit’s … Continue reading

Posted in banking, leadership | 1 Comment

Quantitative Finance Soundbite of the Day

Paul Wilmott on the problems facing the world of quantitative finance: Banks and hedge funds employ mathematicians with no financial-market experience to build models that no one is testing scientifically for use in situations where they were not intended by … Continue reading

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SUV Inventories: Up, or Down?

When the NYT decides to run a major article on demand for SUVs on the front page of its business section, would it be too much to ask for some actual numbers, rather than one far-from-clear ratio and a handful … Continue reading

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The Short-Selling Ban: A Post-Mortem

Floyd Norris gets out his calculator this morning and crunches some numbers on short-selling and stock performance during the now-expired period when the SEC banned naked shorting of 19 financial stocks. As you might expect, there aren’t any obvious conclusions. … Continue reading

Posted in regulation, stocks | 3 Comments

Carl Icahn: Hitting His Stride

It famously took four months for Carl Icahn to even start blogging, after announcing the launch of the Icahn Report in February. So the fact that he now seems to be getting into his stride after only two months is … Continue reading

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Extra Credit, Tuesday Edition

Reflections on Alt-A: A must-read from Tanta. "If subprime was supposed to be about taking a bad-credit borrower and working him back into a good-credit borrower, Alt-A was about taking a good-credit borrower and loading him up with enough debt … Continue reading

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Falling Stocks: Cheap, or Cursed?

John Hempton emails with an insight about Bill Miller: Buying a stock when it falls precipitously is selling volatility. This helps explain Miller’s outperformance over the course of the Great Moderation: by doubling down on his losers, he was selling … Continue reading

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The Risky World of Argentine Debt

For all that commodity prices might be falling right now, they’re still very high — which is good news for Argentina and its current account. Since its disastrous default and devaluation in 2001, the Land of Silver has managed to … Continue reading

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When Bill Met Freddie

On December 31, Freddie Mac shares were worth $34.07 apiece, and Bill Miller owned 15 million of them. By March 31, Freddie Mac shares had fallen 25% to $25.32 each, and Bill Miller owned 50 million of them. As of … Continue reading

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Frank Quattrone, Whiner

Frank Quattrone made his fortune by taking Silicon Valley startups public during the dot-com boom. Even at the time many awkward questions were asked: weren’t most of these companies too small and too young and too unprofitable for a full-scale … Continue reading

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Commuting Datapoint of the Day

Matthew Garrahan reports on the housing bust in Merced, California: Like Stockton and Modesto, Merced is within commuting distance of San Francisco and the Bay Area, which made it appealing to investors. Some numbers from Google Maps: Merced, CA to … Continue reading

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Regulate All Lenders

George Soros lays out his plan for fixing the US mortgage system in the FT today: essentially, it’s a Demark-style covered-bond system which imposes extremely rigorous regulation and homogenization on all mortgage lenders. Under his preferred system, says Soros, "loan-to-value … Continue reading

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Why UBS’s Wealth Management Should Stand Alone

When I saw yesterday that UBS private-banking clients were expected to have withdrawn SFr5 billion from their accounts last quarter, I said the number seemed low to me. Amazingly, I was right: Rich clients at UBS’s wealth management units withdrew … Continue reading

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Extra Credit, Monday Edition

Lessons Learned From A Dangerous Year: "For fixed-income investors, what matters most is not the return on your money, it’s the return of your money." What Bill Gates really means by creative capitalism: An elegant piece from Martin Wolf. Crisis … Continue reading

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Eat Roo

In case you wanted another reason to eat kangaroo rather than beef: they emit just 0.003 tonnes of greenhouse gases per animal per year, compared to 1.67 tonnes per cow per year. And they don’t just save in terms of … Continue reading

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Bear Stearns Conspiracy Watch: Bloomberg Piles On

The latest journalist to start waxing conspiratorial about the collapse of Bear Stearns is Gary Matsumoto of Bloomberg. He’s looking at options trades which he reckons are very suspicious: In a gambit with such low odds of success that traders … Continue reading

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The Sad Anonymity of a Risk Professional

The anonymous confessions of a risk manager in this week’s Economist are well worth reading: The focus of our risk management was on the loan portfolio and classic market risk. Loans were illiquid and accounted for on an accrual basis … Continue reading

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Distressed Trades of the Day

For the best part of a year now I’ve heard buy-siders talk about how there are great opportunities in the debt markets if you know what you’re doing. I’ve generally assumed that these people have lost money on most of … Continue reading

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Fortress Gets a New Principal

Hedge funds can be extremely good at making their founders extremely wealthy. But that can be a problem, too: a star trader at a hedge fund knows that if he wants the real dynastic wealth, he’ll have to start up … Continue reading

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MBIA Turns Thuggish

When it comes to the monolines, I’ve had quite a lot of sympathy for MBIA in general and for its CEO Jay Brown in particular. But if he carries on like this, that sympathy won’t last long: MBIA Inc. said … Continue reading

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Oil Datapoints of the Day

Krishna Guha: At today’s prices the value of oil in the ground exceeds the combined value of all the world’s equity and debt markets. Oil-importing nations are paying oil-exporting nations roughly $1,500bn per annum for oil – about 2.5 per … Continue reading

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UBS Private Banking Inflows Cease

I’m utterly unsurprised at this; if anything, I’d’ve expected the scale of withdrawals to be much bigger. UBS AG, the world’s biggest money manager for the wealthy, may report tomorrow that private-banking clients removed funds for the first time in … Continue reading

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Manhattan Housing Wealth Datapoint of the Day

Jonathan Miller takes a look at what’s happened to Manhattan apartment prices over the past three years — since, more or less, the national housing market peaked in 2005. On a year-over-year basis, it turns out, Manhattan co-ops have appreciated … Continue reading

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Ben Stein Watch: August 10, 2008

I hope you’re sitting down for this one: Ben Stein has written a perfectly good column this week. It’s about fiscal responsibility: he says that the US needs to raise taxes, not cut them, and that if we’re going to … Continue reading

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Metablogging Sunday

The war in South Ossetia is a great example of the power of blogging. On Friday, which was pretty much the day it started, Doug Muir posted a generally anti-Georgian explanation of the whole thing, while Svante Cornell posted a … Continue reading

Posted in Not economics | 4 Comments