This One's for Barry Ritholtz: The Real Problem With Originate-to-Distribute

Judging by his post today on the decline of lending standards, Ritholtz doesn't read Odd Numbers, which I'm very bummed about. He writes: Underlying EVERYTHING -- housing boom and bust, derivative explosion, credit crisis -- is the enormous change in...

Oct 21 2008

Subprime: The Cause Of All Market Moves

It's all subprime's fault.

Jul 31 2007

Wall Street Punch Line

Tonight Show host Jay Leno on Wall Street's woes: "Well, let's see, Lehman Brothers went bankrupt. Merrill Lynch was sold to Bank of America. See, that's when you know the subprime mortgage market is bad, when even brokerage houses are...

Sep 17 2008

Alphabet Soup for the Soul (of Panicky Bankers)

In relatively short order, the Federal Reserve and Treasury Department have marshaled an army of acronyms to battle first the mortgage meltdown, then a credit freeze, and now economic collapse generally. It began last December with the Term Auction...

Oct 21 2008

How Wall Street Loses by Fixing Prices

There's a headline on Bloomberg News today that's bound to ruffle the feathers of the Sarbanes-Oxley antagonists out there: "IPO Fees in Europe Catch Wall Street for the First Time Since WWII." Tighter regulations here in the U.S. are driving...

May 29 2007

Hedge Fund Manager: Goodbye and F---- You

From the Scorched Earth Files: Andrew Lahde, manager of a small California hedge fund, Lahde Capital, burst into the spotlight last year after his one-year-old fund returned 866 percent betting against the subprime collapse. Last month, he did the...

Oct 17 2008

Don't Blame Declining Lending Standards for Subprime Mess

A policy statement by the President's Working Group on Financial Markets signed by Henry Paulson in March placed the root cause of the current crisis on a now-familiar source:The turmoil in financial markets clearly was triggered by a dramatic weakening...

Oct 17 2008

Market of the Absurd

Wall Street loves a story. It can help sell a stock or capture a complex idea. The stock market, however, seems to have lost any sense of plot. Or worst, it is like that post-modern novel you failed to get...

Sep 04 2008

The Dollar's Not That Strong

While I'm throwing darts at Paul Kedrosky, I ought to mention that I also think he's quite wrong about the dollar. He has a good line -- "think of the dollar as Squealer the Pig collectible Beanie Babies circa...

Oct 29 2008

Why Goldman Sachs was Short CDOs

Michael Lewis has a very peculiar column up at Bloomberg today, tied to Kate Kelly's December 14 WSJ story about the subprime traders at Goldman Sachs. Lewis says that Goldman's executives essentially overruled their own traders, thereby saving themselves...

Jan 17 2008

Competitiveness and Mortgages: The WSJ Chimes In

The Wall Street Journal's columnists have clearly reading the same things that I have been over the past few days. Alan Murray today picks up on the report showing that New York is still globally competitive, while Jonathan Clements looks at the advisability of having mortgage debt and investments at ...

May 23 2007

Extra Credit, Monday Edition

World Bank to Lend $100 Billion to Poor Nations Over 3 Years: Including $35 billion to middle-income countries by the middle of next year. Finally, the World Bank can start making money from lending again! Tosca Monthly Shareholder Report,...

Nov 11 2008

Better Red...

"America is more communist than China is right now. You can see that this is welfare of the rich, it is socialism for the rich... it's just bailing out financial institutions," Jim Rogers, the commodities investor, on CNBC Europe. Brothers...

Sep 08 2008

IndyMac-n-Squeeze

Friday afternoon, Megan Barnett wrote that Wall Street needed Xanax. By Friday evening, when Federal regulators seized IndyMac Bancorp, a big mortgage lender, the U.S. markets may have needed something a bit stronger

Jul 12 2008

Yankee Dollars, Come Here!

President Hugo Chávez of Venezuela has been no friend of business. But his policies have sparked a busy little trade in currencies, Reuters reports. Many Venezuelans are making quick trips to neighboring countries to stock up on as many U.S....

Dec 16 2008

Didn't Panic

I was right about what Bush was going to say, but I was wrong about how he said it. This was one of the best speeches of his presidency, if not the best. I was watching in a noisy...

Sep 24 2008

Now and Yen: Obama Bonds?

The U.S. Treasury faces a quandary next year. It will need to fund a gigantic budget deficit as a result of the financial rescue through a sale of securities, but could face resistance from foreign investors, the biggest holders of...

Nov 19 2008

The End of the Chaos Trade

Nassim Taleb famously made his (first) fortune in the stock-market crash of 1987, and went on to an entire career based on using the derivatives market to bet on "black swan" events. Which raises the obvious question: what if...

Sep 22 2008

Drive Time in D.C.

First Takeaway: The Bush administration is trying to find ways to provide a emergency financial package that could ease a merger between General Motors and Chrysler, the papers report today. There are three options: 1) use some of the Tarp...

Oct 28 2008

Will Retail Investors Continue to Buy and Hold Stocks?

It's still too early to tell whether the stock-market crash of the past couple of months has done any lasting damage to the conventional wisdom that a buy-and-hold strategy applied to a diversified stock portfolio is generally a very...

Nov 03 2008

Special Situation: Lehman Subprime Unit Shutdown

Yves Smith of Naked Capitalism submits: The securities industry is highly cyclical, and like the markets they trade in, Wall Street firms are prone to overshoot and undershoot. Executives cut too deeply in downturns, resolve not to repeat that mistake...

Aug 23 2007

Did Derivatives Cause the Crisis?

While I'm reading the front page of the NYT, it's worth noting the latest installment in its crisis series: 3,000 words from Peter Goodman on how Alan Greenspan's lax oversight of the derivatives market got us all into this...

Oct 09 2008

Government Hypocrisy in GSE Bailout?

In a sign that the more things change, the more they stay the same, the FT speculated today that the Treasury Department's takeover of Fannie Mae and Freddie Mac was constructed in such a way as to keep the pair's...

Sep 08 2008

Wall Street Humor Turns Bitter

Jokes about the economic crisis and Wall Street's role in it are starting to turn a bit more bitter. Witness Jay Leno's monologue on the Tonight Show last night... "I listened to president Bush's speech. I think I understand this...

Sep 26 2008

More Tragic Victims of the Slump: Playboy Bunnies

At the end of a week in which Wall Street descended ever further into chaos and despair, we're sorry to be the bearer of even more gloomy news. Playboy Bunnies might be the latest victims of the global financial...

Sep 26 2008

Why Lending Standards Didn't Fall

Last week I wrote about new research from St. Louis Federal Reserve economists which, contrary to conventional wisdom, found very little evidence that subprime lending standards loosened in recent years. But Emre Deliveli points out that another recent IMF paper...

Oct 20 2008

Fashion Breakfast: Dandies, Doonan, Wall Street, Catwalks, Parties

Dandies of the world beware. Artist Sebastian Horsely was coming to the U.S. to promote his new book, Dandies of the Underworld, but refused entry to the U.S. on the grounds of 'moral turpitude'. He was wearing his top hat...

Mar 24 2008

Financial Crisis: Great Tech Start-ups In; iPhone Beer Simulators Out

Kevin Maney writes: Certainly tech guru Tim O'Reilly is onto something when he says that in this economy, if your tech start-up is making a beer chugging simulator for the iPhone -- you may want to rethink things.But what's going...

Sep 30 2008

Wall Street's Next Generation: Latvians?

What kinds of innovative industries will America's next generation create that will help propel the country back to economic dominance? Don't expect them to come from the sciences. Reconfirming what we've always known, kids in America continue to lag far...

Dec 09 2008

When Wall Street Takes Advantage of the Public Sector

Andrew Clavell called it, back in February: Let's assume you work at a Pennsylvania school board... The more complex the structured product, the more opportunity for agents to extract fees at your expense... If you claim you do know...

Nov 03 2008