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Causality in NY Post Headlines
"FALL ST." is the headline splashed across the front page of the New York Post this morning. "Plunge sparks recession fear". OK, maybe Tuesday was a bit of a slow news day. But check out the causality...
View ArticleThe Public Side of Gerson Lehrman
Apologies for the late start this morning, I’ve had a combination of digital and meatspace problems (I thought I was taking an aspirin in the middle of the night; it turned out to be an ambien. Oops.)...
View ArticleBill Ackman’s Brutal Target Losses
Equity Private, guest-blogging over at Dealbreaker, has the H2 2007 reports from Pershing Square IV, the Bill Ackman hedge fund devoted to going long Target. Which hasn’t worked out so well. He lost...
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Pandit Spams his Customers
Logging on to my Citibank account this morning, I found this, which recapitulates an email I received a few days ago: The link takes you here, to a letter which simply begs for parsing. But before we...
View ArticleAIG: The Cramer Conspiracy Theory
You knew that someone was going to come out and say it. But did you know it was going to be Cramer? Shorts were able to take AIG down from the $20s to $4 in a week’s time. To be sure, there were plenty...
View ArticleThe $2 Trillion in Uninsured Bank Deposits
Many thanks to Don Fishback, who alerted me to the fact that (with a lot of work) one can actually find reasonably up-to-date statistics on total uninsured deposits at the FDIC’s website. He did just...
View ArticleHomeownership: The Ideal Which Refuses to Die
Of all the Big Ideas which have been thoroughly discredited over the course of this crisis, arguably the biggest is the concept that homeownership is always and everywhere a Good Thing. As we’ve seen...
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Cognitive Disconnect of the Day
This is the front page of nytimes.com earlier this afternoon. It’s a tough time to be a journalist: clearly moves like this are clearly newsworthy, but equally clearly it’s very hard to say anything...
View ArticleWhich Markets are the Hardest to Move?
Jim Surowiecki this week looks at what he calls "ancillary markets" — things like futures, the VIX, or credit-default swaps — and the effect they have on the stock market: Even if these ancillary...
View ArticleWhy the Detroit Bailout Should Include Bankruptcy
With Deutsche Bank saying that GM is worthless, and some kind of government bailout of Detroit now a certainty, the battle lines are being drawn: is bankruptcy an option? Justin Hyde says it isn’t, and...
View ArticleBarney Frank declares war on… securities?
It was probably inevitable, but that doesn’t make it any less depressing. Barney Frank has now come out and said that investors in mortgage-backed bonds should be liable for the underlying loans. “More...
View ArticleWhy did Mexico’s peso fall today?
It’s not often that currency moves have an obvious explanation. But every so often, you can apply the laws of supply and demand to FX. For instance, when Citigroup announced that it was buying Mexico’s...
View ArticleGet Paid to Drive an Electric Car!
One reason why energy traders can make $2 billion in a year is that energy prices are crazy, crazy things – they often behave more like hotel rooms than like normal assets like stocks or bonds or...
View ArticleMike Bloomberg earns $1 billion a year
Add Michael Bloomberg to the billion-dollar-a-year club. DealBook reports that Fortune’s Carol Loomis has had an inside look at the books, and found 2006 profits of $1.5 billion on revenues of $4.7...
View ArticleThe NYT’s rent vs buy calculations
David Leonhardt’s Economix column has finally been promoted from the front of the Business section to the main front page! Congratulations to him. And the subject matter is dear to my own heart: rent...
View ArticleCitigroup layoff math
To read all the press about the Citigroup layoff plan of late, it seems there are two main planks: first, fire about 17,000 people. Then take another 10,000 jobs or so, and move them out of New York to...
View ArticleKerkorian: Out of the running for Chrysler?
Bloomberg’s Doron Levin gets off a nice one-liner at Kirk Kerkorian today, and his bid for Chrysler – which, as you’ll recall, is contingent on the United Auto Workers taking on a huge chunk of...
View ArticleFT vs Bloomberg
Ooh, this is juicy! The FT’s Alphaville blog has come out and declared that one of Bloomberg’s biggest stories today is a hoax. The story, headlined “Gold Fields May Receive Bid From Pastorini-Led...
View ArticleMel Karmazin, Failure?
One of the ideas behind this blog is that the world of business is full of big egos, and that egos trump economics on a very regular basis. On the other hand, it’s rare to find the sitting CEO of a...
View ArticleHedge Funds’ Insider Trading in Convertible Bonds
How do hedge funds get their outsize returns? And why do so many hedge funds list "convertible arbitrage" as one of their main sources of profits? Could the answer to both questions be "insider...
View ArticleMoody’s: An LTCM Type Failure Possible
Yves Smith of Naked Capitalism submits: According to Bloomberg, Moody’s has alerted investors to the possibility of a repeat of the 1998 Long Term Capital Management hedge fund crisis. We should be so...
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More Cheery Housing Charts
Yves Smith at Naked Capitalism submits: Michael Shedlock, of Mish’s Global Economic Trend Analysis, provides some uplifting charts and commentary that should quash any doubts that this housing cycle is...
View ArticleRetracements and Racism
One of the buzzwords in finance circles right now is "reintermediation". It’s the opposite of disintermediation, and it’s what happens when banks go back to old-fashioned lending, carrying assets on...
View ArticleWhy We Shouldn’t Count on Fiscal Policy to Save the Economy
Mark Thoma today has an excellent (implicit) rebuttal of Larry Summers’s proposal that the US government use fiscal policy to fight impending recession. Both fiscal and monetary policy are capable of...
View ArticleHas Sam Heyman Lost $1 Billion on Sallie Mae?
Sam Heyman is a hedge fund manager, corporate raider, and merger arbitrageur. He came massively unstuck in Australia in May, when his merger-arb tactics relating to the acquisition Qantas by Airline...
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