Bailout

The tragedy of Prince and Rubin

Posted on April 08, 2010
Well done to Cyrus Sanati for getting a bit of snark into Dealbook:

Blaming Prince and Rubin

Posted on April 08, 2010
This morning saw Chuck Prince and Bob Rubin hauled up in front of the Financial Crisis Inquiry Commission, and they didn't do themselves any favors at all. Even in the wake of Citigroup's systemically-devastating collapse, they insisted that Citigroup's risk management systems were "robust and proactive", to use Rubin's words...

Counterparties

Posted on April 07, 2010
Does Chase have any idea how to modify a mortgage? -- HuffPo

Those outperforming junk stocks

Posted on April 07, 2010
There are lots of tools that investors use to try to outperform the stock market. Some use fundamental analysis, looking for stocks which are cheap. Others just want to buy high-quality qualities. And traders often want to buy stocks which are rising, playing the momentum...

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Municipal finance datapoint of the day, Latvia edition

Posted on April 07, 2010
Duncan Wood has a great story about sleazy municipal finance today, with big investment banks helping a major city hide hundreds of millions of dollars in debt. The city is Riga, Latvia; the bank is Deutsche:

The commercial real estate boomlet

Posted on April 07, 2010
We saw yesterday that indiviuals across America seem to have learned nothing from the housing bust -- and now Dana Rubinstein has a great piece in the NYO showing that exactly the same is true in the world of commercial real estate as well. That's certainly what Newmark Knight Frank president Jimmy Kuhn thinks:

The FOMC?s minutes get political

Posted on April 07, 2010
Shahien Nasiripour finds a nugget in the latest FOMC minutes: for the first time since 2002, they mention the Fed's "supervisory staff" as part of the way that the Fed conducts monetary policy. The idea is that bank supervisors help to keep an eye on leverage and other risks in the financial sector, and that the FOMC uses that information when setting interest rates.

Citi: The mortgage underwriter?s tale

Posted on April 07, 2010
The Financial Crisis Inquiry Commission is holding more hearings this week, and the prepared testimony of Richard Bowen, a former senior mortgage underwriter at Citigroup, is well worth reading.

Counterparties

Posted on April 06, 2010
Andrew Leonard's fabulous takedown of Michael Wolff, 12 years in the making -- with added bonus response from Wolff! -- Salon

Larry Summers and the revolving door

Posted on April 06, 2010
Joshua Green has a virtuoso piece of Kremlinology at the Atlantic today, concluding, as his headline puts it, that "Yes, Larry Summers is Leaving". But if it's true, where is he leaving to?

Art Capital made at least $16 million off Annie Leibovitz

Posted on April 06, 2010
What kind of interest rate do rich people pay when they borrow money? In the case of Annie Leibovitz, the answer is something over 44%. That's the most interesting revelation from the latest court case to embroil the celebrity photographer, wherein a company called Brunswick Capital Partners says that it helped Leibovitz refinance her Art Capital Group debt with a $40 million loan from Colony Capital.

Charging for carry-ons

Posted on April 06, 2010
Airlines save money when their customers check bags rather than carry them on board the plane. How to encourage their customers to do just that? They don't seem to be jumping at the idea of the negative bag-check fee. But how about charging money for carry-ons? Spirit Airlines has now announced it's going to do just that: while a small carry-on which fits underneath the seat in front of you is fine, anything which requires stowing overhead is going to cost at least as much as that checked bag.

TheStreet stands up to Generex?s bullying

Posted on April 06, 2010
Well done to Adam Feuerstein and TheStreet.com for standing up to egregious bullying from Generex, a small and smelly Canadian biotechnology company which has just filed a ridiculous $250 million lawsuit against them for libel. (To put that number in context, it's roughly twice Generex's market cap...

The social utility of short selling

Posted on April 06, 2010
John Hempton today lays out the short case for First Solar (and, parenthetically, Palm and Garmin as well), and in doing so says that, in this case at least, I am "not necessarily" harsh in describing such activity as "socially useless":

The National Housing Survey and the real estate bear market

Posted on April 06, 2010
There's a huge amount of information in Fannie Mae's National Housing Survey; I'd recommend downloading the full 117-page presentation here. It confirms what I've been hearing anecdotally: that people still believe in housing as an investment, and that the enormous nationwide housing crash has done much less to alter Americans' attitude towards homeownership than we might have hoped.

Counterparties

Posted on April 05, 2010
Summers asked for, and received, full cabinet-member status in return for not getting the Fed chief job -- National Journal

Ben Stein?s employer breaks the law

Posted on April 05, 2010
April 2 was meant to be a great day in the history of sleazy free-credit-report websites like Ben Stein's employer Freescore. A new FTC rule came into effect (read all 22 pages of it here), forcing all such websites to have a huge notice across the top of every web page, saying that AnnualCreditReport...

The behavioral economics of earnings estimates

Posted on April 05, 2010
Tom Brakke has a great explanation of how and why earnings estimates move, based on a hypothetical analyst who wants to up his estimate to $1.65 while the consensus ranges from $1.22 to $1.35.

The Repo 105 list

Posted on April 05, 2010
As the SEC investigates the question of just how many banks were abusing Repo 105, Vipal Monga today points out that abusing Repo 105 is exactly the same thing as using Repo 105: there's no conceivable innocent use of this particular part of the accounting-standards rulebook.

Tolling the Cross Bronx Expressway

Posted on April 05, 2010
Those who live close to it won't be surprised to hear that the Cross Bronx Expressway is officially the most congested road in the US. It has an astonishing ability to instil deep-seated passions in drivers:

Michael Wolff?s doomed aggregation strategy

Posted on April 05, 2010
It's pretty easy to adjudicate the fight between Sharon Waxman of The Wrap and Michael Wolff of Newser: just look at how the latter responded to the former. Not only did they link to the HufPo excerpt of Waxman's complaint rather than to the complaint itself, they also took to hurling thinly-veiled legal threats, with Newser's CEO writing to Waxman saying that "we are not free-riders and we would consider it libelous for you to make that claim outside correspondence".

When prop traders turn hedgie

Posted on April 05, 2010
Jenny Strasburg finds a couple of former in-house prop traders with new funds of their own: Arvind Raghunathan, formerly of Deutsche Bank; and Mark Carhart, who was at Goldman's Global Alpha fund when it blew up. Both are pushing a quant strategy, although Raghunathan layers on top some outsourced fundamental analysis, with more than 50 researchers in Chennai poring over public filings.

Complexity and doom

Posted on April 04, 2010
Clay Shirky is talking about media, but might as well be talking about finance:

The Duchamp market

Posted on April 04, 2010
In his wonderful essay about Warhol and authenticity, Richard Dorment writes:

The politics of Basel III

Posted on April 03, 2010
It's long past time, I think, to introduce a Basel III tag on this blog, since in terms of financial regulation it's clearly the area where there's the biggest gap between its importance, on the one hand (high) and the amount of reporting going on around it (very little)...

Counterparties

Posted on April 02, 2010
Barney Frank Permanently Bans Staff From Communicating With Aide-Turned-Lobbyist -- HuffPo

Counterparties

Posted on April 01, 2010
PropertyShark "has nearly 60 full-time employees"?! -- Crain's

Geithner vs. Congress on bank leverage

Posted on April 01, 2010
Mike Konczal, blogging chez Ezra today, finds a revealing letter from Tim Geithner to Rep. Keith Ellison on the subject of why Geithner doesn't want leverage caps in financial-reform legislation. (The link to the letter isn't working from Mike's blog, if it doesn't work from this one either, then go here first and follow the link from there...

How Texas?s consumer protections helped banks

Posted on April 01, 2010
Alyssa Katz has a very long piece in The Big Money today about the housing market in Texas:

Blogonomics: Monetizing passion

Posted on April 01, 2010
In my continuing attempt to come up with bright ideas for how bloggers can turn traffic, readers, and influence into money, I met this morning with interactive marketing executive Gaston Legorburu of SapientNitro. It was a mildly depressing meeting: he pointed out that many very smart publishers are looking hard into these questions, and that none of them have had a lot of success.

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