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The Income Inequality Game

Posted on October 28, 2008 by Felix

Dan Goldstein, the brother of fashion blogger Lauren, has an interesting web project of his own, trying to work out how well people understand inequality in the US. Go give it a twirl; the more people who take the interactive … Continue reading →

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Will the US Make Money on its Bailout?

Posted on October 20, 2008 by Felix

Jim Surowiecki is quite sure that Treasury’s bailout plan, or at least the $250 billion part of being spent on recapitalization, is an investment rather than an expenditure: I realize that, given the way the U.S. budget is accounted for, … Continue reading →

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Why the CDS Market Didn’t Fail

Posted on October 19, 2008 by Felix

Jane Baird has the latest on what Alea calls "the non-event of the year": the Lehman Brothers CDS settlement on Tuesday. The upshot is that there’s very little to worry about: the worst-case scenario is limited to the failure of … Continue reading →

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Ben Stein Watch: October 12, 2008

Posted on October 12, 2008 by Felix

Ben Stein, October 2007: If you are a smart long-term investor, do not pay any attention to short-term developments. They are often reported by people whose motivation may be to scare you (screaming about the subprime “crisis”)… In the very … Continue reading →

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Awaiting the Lehman CDS Auction

Posted on October 7, 2008 by Felix

Here’s an interesting theory: the reason that bank lending has ground to a halt is that everybody’s waiting until the results of the Lehman CDS auction, which is currently scheduled for October 10. "Banks are hoarding cash," says Elizabeth MacDonald, … Continue reading →

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Topsy-Turvy Datapoint of the Day, Fannie Mae CDS Edition

Posted on October 6, 2008 by Felix

Reuters reports on the results of the Frannie CDS auction: Protection sellers on the companies’ subordinated debt were the biggest winners, with contracts on Fannie Mae’s subordinated debt recovering 99.9 percent of the sum insured… Credit default swaps on the … Continue reading →

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Lies, Damn Lies, and Tourism Statistics

Posted on September 30, 2008 by Felix

In 1995, the owner of the Great Smoky Mountain Railroad sued Warner Brothers. The movie studio had used the railroad as a location for the train crash scene in The Fugitive, and the railroad had asked in return for an … Continue reading →

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Where Will Treasury Find Its Model?

Posted on September 29, 2008 by Felix

Steve Hsu has some ideas on how Treasury’s reverse auction might work; a new paper from NERA also considers the practicalities. The big question, of course, is how on earth one goes about valuing unique and hard-to-understand MBSs, CDOs, CDOs … Continue reading →

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When it Rains, it Pours

Posted on September 26, 2008 by Felix

This is really, really bad. In a nutshell: the bailout package, which everybody thought was a done deal, has been undone by some combination of Republican recalcitrance and the heat of the presidential campaign. At the same time, WaMu’s gone … Continue reading →

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Damien Hirst: $200 Million Richer

Posted on September 16, 2008 by Felix

The final results are in: the Damien Hirst auction at Sotheby’s raised £111.5 million, which is thisclose to $200 million. (It would have been comfortably over the $200 million level at any point until the pound collapsed at the beginning … Continue reading →

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No Good News at Lehman

Posted on September 10, 2008 by Felix

There are 5,424 words in the Lehman Brothers press release today, but the general reaction in the markets seems to be that they’d much rather have action than words. An intent to sell a majority stake in Neuberger Berman? An … Continue reading →

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Hirst: Calling the Top

Posted on September 7, 2008 by Felix

Hirst ubiquity has now reached the point at which even sober-sided finance types like Nadav Manham have noticed it. Manham asks what I think, and so I’ll stick my neck out: I’m calling a top in the Hirst market. Calling … Continue reading →

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Creditor Rights, Risk Aversion, and Justice

Posted on September 3, 2008 by Felix

A paper from Viral Acharya, Yakov Amihud, and Lubomir Litov shows something which makes a lot of intuitive sense: if you beef up creditor rights, you beef up corporate risk-aversion — and that can be bad for growth. They conclude: … Continue reading →

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Goolsbee 1-0 Salmon

Posted on September 2, 2008 by Felix

Back in March 2006, Austan Goolsbee was a little-known Chicago economics professor, and I was an all-but-unknown blogger. In a fit of dudgeon, I took it upon myself to attack an article that Goolsbee wrote in Slate on the subject … Continue reading →

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When Picking Stocks, Ignore the News

Posted on September 2, 2008 by Felix

Many thanks to Andrew at Humble Money for pointing me to a very astute blog entry from Teresa Lo back in November last year. When stocks fall sharply, a lot of people start thinking about picking up bargains: "it’s human … Continue reading →

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The Destroyer of Swedish Capitalism

Posted on August 19, 2008 by Felix

For a wonderful real-world example of Martin Wolf’s take on global capitalism, check out Niklas Magnusson’s profile of Swedish activist investor Christer Gardell. This being Sweden, Gardell isn’t only unpopular with unions and other leftists, he’s even unpopular with shareholders: … Continue reading →

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When Savings Start to Rise

Posted on August 19, 2008 by Felix

Paul Kedrosky quotes David Rosenberg today on the implications of a rising savings rate: The savings rate is going to be forced higher. This, again, is going to be very, very disinflationary. It means that fashions are going to change. … Continue reading →

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Footnote of the Day

Posted on August 8, 2008 by Felix

As cited by Z (a/k/a Olivier Fouquet), a commenter at Crooked Timber: In fact, almost all non trivial results of […] can be put in the following tripartite classification: (a) Results for which a (sound) reference is given, but of … Continue reading →

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On Risk Aversion

Posted on August 8, 2008 by Felix

I’ve been thinking a bit more about the downside of risk aversion, which is something that Steve Waldman brought up yesterday and which I then applied to the ARS fiasco, among other things. The problem is that it’s entirely natural, … Continue reading →

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How to Build a Recovery

Posted on August 7, 2008 by Felix

Larry Summers has a long and pompous article in the FT today on building a financial recovery. If you can slog your way through the awkward constructions ("consideration should be given to whether the government should establish a mechanism for … Continue reading →

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Timing the Recession

Posted on August 5, 2008 by Felix

Don Fishback and Barry Ritholtz are shocked — shocked! — that the InTrade recession contract is based on hard GDP numbers rather than, um, something else, maybe an NBER pronouncement the timing of which is entirely unknown. The fact is … Continue reading →

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Mobile Banking for the Poor

Posted on August 5, 2008 by Felix

At a press conference this morning in Mumbai, mobile-banking company Obopay announced an alliance with Grameen Solutions — an alliance with an extraordinarily ambitious goal. In ten years’ time, the companies said, they would like to see 1 billion of … Continue reading →

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Art in Textbooks

Posted on August 4, 2008 by Felix

David Galenson has a list of the greatest works of art of the 20th Century. The Demoiselles are in top place, which is reasonable enough. But the list gets rather screwy after that: Tatlin’s model of his unbuilt Monument to … Continue reading →

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Did Reg FD Have Unintended Consequences?

Posted on August 1, 2008 by Felix

Heidi Moore has an interesting interview with Vanderbilt professor Robert Whaley, who claims to have found some nasty unintended consequences to the SEC’s Regulation Fair Disclosure, which tried to ensure investors were on a level playing field with respect to … Continue reading →

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Adventures in Technical Analysis, McClellan Oscillator Edition

Posted on July 29, 2008 by Felix

When I dumped on technical analysis last month, one of the more unexpected results was a long email thread with a chap called Jeff Drake, on the subject of something called the McClellan Oscillator. He’s a big fan, while I … Continue reading →

Posted in charts, investing, stocks | 1 Comment