Bailout

What are the obstacles to being a landlord?

Posted on August 29, 2010
Joe Nocera addresses the question of who might buy houses to rent them out:

Counterparties

Posted on August 28, 2010
"More frequent use of swear words indicates deception" -- Farnham St

How credit cards force the poor to subsidize the rich

Posted on August 28, 2010
Just after I went on holiday in July, the Boston Fed released a 57-page paper quantifying the subsidy from poor to rich that is the result of credit-card interchange fees. It was picked up by the likes of the NYT and the WSJ, and now Tim Chen, the CEO of NerdWallet, has decided to push back on the findings.

Counterparties

Posted on August 27, 2010
El-Erian: Stimulus isn't enough -- WaPo

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The CDO shuffle

Posted on August 27, 2010
It's impossible not to love any story about the insanity of high finance during the bubble years which not only goes into hugely geeky detail but also comes with a cool cartoon and which includes the phrase "cheerfully feckless". So, go read ProPublica's latest CDO piece right now.

What about perpetual TIPS?

Posted on August 27, 2010
Eddy Elfenbein thinks the time is right for the US government to issue perpetual bonds:

Should we listen to El-Erian?

Posted on August 27, 2010
I'm not entirely clear why Matt Yglesias has suddenly come over all bah-humbug at the presence of Mohamed El-Erian on the Washington Post op-ed page:

Foreclosure datapoint of the day

Posted on August 27, 2010
HAMP might not have helped lots of homeowners stay in their houses over the long term, but it did push back the point at which they got foreclosed on. To now. Here's a graph from the latest report from Lender Processing Services:

GDP: the best kind of bad news

Posted on August 27, 2010
If you're going to have a sluggish growth figure, this is the best sort of sluggish growth to have:

The driveway tax

Posted on August 26, 2010
How to get drivers to help pay for the direct costs and negative externalities they cause? A congestion charge is one obvious way, but it's expensive and complicated to implement. A driveway tax isn't quite as elegant, but it's much simpler, and it seems to be catching on even outside Oregon: it's just been implemented by Mission, Kansas.

ETFs are not created equal

Posted on August 26, 2010
Paul Amery grabs this chart from a recent Deutsche Bank report:

Paul Singer?s litigation strategies

Posted on August 26, 2010
Paul Singer's Elliott Associates hedge fund navigated the crisis well, and kept on going strongly through 2009. In 2010, it's had modestly positive returns: +5.3% in the first half, but just +0.4% in the second quarter. Nothing too shocking there -- unless you're Paul Singer, learning that Absolute Return + Alpha has got ahold of the information...

Counterparties

Posted on August 25, 2010
Great clip from Inside Job, putting Ric Mishkin on the spot about why he didn't disclose a $124,000 conflict -- Yahoo

Unemployment: Strucs vs Cycs

Posted on August 25, 2010
Brad DeLong places himself squarely in the camp of the Cycs rather than the Strucs when it comes to Jim Ledbetter's distinction between economic unemployment theorists. The Cycs think that unemployment is cyclical and will fall as demand grows; the Strucs think it's structural, and the result of a mismatch between the jobs available and the unemployed workers looking for employment.

Getting the housing market moving

Posted on August 25, 2010
It's a bit too wet to schlep into the office today, but I did manage to make it in there yesterday, and shot this reaction to the housing numbers. Warning, lots of hand-waving ahead:

Why going to Monte Carlo loses you money

Posted on August 25, 2010
One of the key tools used by fixed-income analysts during the Great Moderation was their beloved Monte Carlo simulation. They would take an instrument like a CPDO or a subprime-backed CDO, and they would run it through tens of thousands of possible future worlds...

Corporate optimism datapoint of the day

Posted on August 25, 2010
Randall Forsyth reports on the magical math of corporate defined-benefit pension plans:

Insider trading datapoint of the day

Posted on August 25, 2010
It's barely credible, but it seems to be true:

Vine talk: Not all wines get better with age

Posted on August 24, 2010
(Felix Salmon is a U.S.-based financial journalist and a Reuters blogger here. The opinions expressed are his own) By Felix Salmon NEW YORK (Reuters Life!) – You probably know, or think you know, that fine wine gets better with age. But how do you know that? It is probably not by tasting a large number of fine [...

Counterparties

Posted on August 24, 2010
Will IndyMac unnecessarily foreclose on a church? Looks like it -- Shame the Banks

Replacing Frannie with a new bond guarantee

Posted on August 24, 2010
Donna Borak has found an upcoming paper from Fed economists Wayne Passmore and Diana Hancock proposing a government backstop for asset-backed securities. This sounds very much like Gary Gorton's paper back in May, which was a very bad idea back then, and is just as bad of an idea now.

China eyes the Black Swan Protection Protocol

Posted on August 24, 2010
Jenny Strasburg misses the point of the Black Swan Protection Protocol:

Why the housing report presages lower prices

Posted on August 24, 2010
Stephen Gandel finds an interesting theory for why home sales plunged so much last month, even as prices remained steady:

Urban traffic datapoint of the day

Posted on August 24, 2010
Beijing has a 62-mile traffic jam which is currently moving at one third of a mile per hour, and which is likely to last until mid-September. And that's not even the really scary bit:

America stops buying homes

Posted on August 24, 2010
Earlier this month, talking about a housing market unsupported by Uncle Sam's billions, I said that "the entire housing-finance business in the US would come to a screeching halt. No one could buy, no one could sell, and home values would be entirely hypothetical"...

Counterparties

Posted on August 23, 2010
Mikael Blomkvist vs Andrew Sorkin. Hardly seems fair -- NYT

Lies, damned lies, and equity mutual fund statistics

Posted on August 23, 2010
The lead story in Sunday's NYT was by Graham Bowley, and it was quite alarming.

Should ETFs be allowed to include illiquid stocks?

Posted on August 23, 2010
I had a fascinating conversation on Friday with Harold Bradley, the CIO of the Kauffman foundation. He's something of an expert on high-frequency trading, quantitative strategies, and the like, and he raised an interesting question: why isn't the SEC banning ETFs which include small, illiquid stocks?

The failure of HAMP

Posted on August 23, 2010
ProPublica's Paul Kiel crunches the latest HAMP numbers, and gets Treasury's Herb Allison on the record saying the kind of things which so upset Atrios and others:

The cruelty of HAMP

Posted on August 23, 2010
Atrios, reading Steve Waldman on Treasury thinking, concludes that they are "truly awful people":

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