Apologies for the reliance on the Financial Times today, but it happened to have a lot of good material. The CEO of Harvard Management, Mohamed El-Erian, writes the occasional opinion piece, usually for the Financial Times, and I’ve always featured them because they are consistently thoughtful and well-argued. I’m highlighting his latest FT piece, “How […]
Read more...John Dizard, who writes a pretty-much-weekly column for the Financial Times, typically presenting an exotic investment idea, has long given me the impression he spends much of his day gossiping with people on trading desks. Which means he is very much plugged in, and some of the remarks he makes in passing can be more […]
Read more...Ciitgroup CEO Charles Prince, in an exclusive interview with the Financial Times, said something I expect he will come to regret: Chuck Prince on Monday dismissed fears that the music was about to stop for the cheap credit-fuelled buy-out boom, saying Citigroup was “still dancing”. The Citigroup chief executive told the Financial Times that the […]
Read more...I’ll be brief in introducing this story on leveraged loans in today’s Financial Times, but you might also want to view its companion piece, a story on Citigroup CEO Chuck Prince’s remarks on this market. Leveraged loan prices are at their lowest point since the start of the Gulf War. Some see it as a […]
Read more...Another day, another gloomy housing forecast? The Freddie Mac prediction, that housing sales in the US will total 6.28 million, would be the lowest level since 2001. Not surprisingly, the agency attributed the expected decline to higher interest rates and more stringent lending standards. The report also said Freddie Mac’s home price index, for houses […]
Read more...Reuters tells us that hedge funds that had previously steered clear of the Mexican mortgage backed bond market, deeming it to be too small, are now stepping up their investments there in the wake of US subprime problems. It won’t take much in the way of capital inflows to lower interest rates of Mexican MBS, […]
Read more...I find it interesting when factoids that are already in the public domain get treated as if they are news. Stephanie Pomboy, as reported by Barron’s Alan Abelson (hat tip Barry Ritholtz) tells us that there are a lot of adjustable rate mortgages that have no equity. And, of course, if housing prices fall, more […]
Read more...An article in the Financial Times reports on something truly extraordinary: rating agency Moody’s issuing a report, due out Monday, that is highly critical of the private equity industry. And we don’t mean because they have gotten away with a lot of “cov lite” deals, which are debt financings for their transactions that lack the […]
Read more...I’m a bit late to this item, from Friday’s Financial Times: “Credit crisis to worsen as banks cut and run,” which is an unusually vivid headline. The FT story describes how margin requirements for mortgage-related CDOs have been made considerably more stringent. AAA rated CDOs, which used to be haircut at 2-4% in January are […]
Read more...One thing that has been a bit mysterious to me is that, given the nervousness among prime brokers who have been financing collateralized debt obligations and evidence that these lenders are tightening credit considerably, why haven’t more hedge funds gotten in trouble by being forced to liquidate or at least partially liquidate? The Lex column […]
Read more...It’s probably a character defect, but I get wound up when I read something that is directionally correct but then discredits itself by getting important facts wrong. The latest case in point is a Huffington Post post by Eugene Linden on “The Ecology of Toxic Mortgages.” It’s a more than usually frustrating example because 1) […]
Read more...UBS’s CEO Peter Wuffli resigned, in large measure due to losses related to the closure of an internal hedge fund last May. The Wall Street Journal, in “UBS Ousts CEO Wuffli After a Spate of Setbacks,” reports: Swiss financial giant UBS AG — buffeted by a series of setbacks, including the costly blowup of an […]
Read more...Today’s Wall Street Journal, in “Mortgage Mess Shines Light on Brokers’ Role,” tells the sorry tale of one Altaf A. Shaikh, who frequently used the name Zak Khan and left a path of financial devastation in his wake as a subprime mortgage broker. This isn’t a great job of reporting. By focusing on one, and […]
Read more...As we noted earlier, a minor casualty in Bear-Stearns-hedge-fund-meltdown-induced repricing of CMOs was a mid-sized, independent-contractor broker-dealer Brookstreet Securities, which blew a hole in its balance sheet when its clearing firm repriced the assets in many of its margin accounts and issued margin calls. Tanta at Calculated Risk found out (via the OC Register) why […]
Read more...From the Financial Times’ blog Alphaville: Investors in the worse-hit of two stricken Bear Stearns hedge funds are offering to sell their holdings for as little as 11 cents on the dollar but still finding no buyers, according to unfilled trades on Hedgebay, a secondary market for funds. Vulture funds and others have been quick […]
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