It Doesn’t Add Up.
According to The Wall Street Journal, today S&P Cut Ratings on 11 Banks.
Depending upon each institution’s accounting policies, individuals at those firms may have cheered their firm’s respective downgrade because that action may have reduce the value of the firm’s outstanding debt thereby allowing the firm to recognize an unrealized gain on its income statement. (Yeah, it is […]
My fickle friend, the summer wind.
A few weeks ago, Harvard announced that its endowment fund lost about $8,000,000,000 (since July 1).
This week, Yale announced that its endowment was down about 25% for the year. That’s about $5,900,000,000. (Their fiscal year started July 1.)
Likewise, according to yesterday’s Wall Street Journal, CALPERS, the California Public Employees’ Retirement System, has lost about […]
We very much like the ancient Greek story of Cassandra, and one could well imagine that for almost ten years, Harry Markopolos felt like a modern-day Cassandra.
We don’t know enough about Mr. Markopolos to know whether he wrote letters to the SEC about hundreds of other fund managers claiming that they also ran Ponzi schemes or were part of […]
Three days ago in a post, Past Performance Is Not a Guarantee…, we referenced the struggling investment manager William H. Miller and wrote:
“We want to understand what causes or motivates people to lose their skepticism…and accept someone as, say, a can’t-lose “genius” investor…rather than view him as a large risk (with, hopefully, a corresponding large expected return). What hope or psychological need permits such credulity?”
There are […]
The Wall Street Journal has an article today entitled, Mack and Thain Lose ‘08 Bonuses.
We’re neither sympathetic nor antagonistic towards Mr. Thain, who has only been in his position for a year; so, we take no glee in his being shut-out. Hopefully, he’ll be able to make-do with his $750,000 salary, $15-$20 million signing bonus from […]
We were searching our hard drive for a paper, and found a very interesting article that we had saved about the perils of excessive leverage. It is As Funds Leverage Up, Fears of Reckoning Rise from the April 30, 2007, edition of The Wall Street Journal. It is subtitled: Fed and SEC Question Wall Street […]
In the thirty-five years since the first “energy crisis,” have Chrysler, Ford, or GM avoided a single management fad?
Have their collective managements through the years embraced of any single fad that led to sustainable improvements anywhere?
Now, it is true that many fads—and we are using that word pejoratively—contain useful recommendations and are consistent with effective and efficient management. However, […]
Does the Sum of Idiosyncratic Decisions Mean Anything?
There’s an article in the weekend edition of The Wall Street Journal, entitled, It’s a Done Deal: Merrill and BofA. It is subtitled, “At Thundering Herd’s Last Meeting, Thain Presides Over Sadness and Anger.”
In previous posts we’ve already commented on a variety of related topics, including our dislike of mega-mergers, which […]
A Variety of Risk & Incentive Ideas All in One Post!
There is an article in The Wall Street Journal today entitled, Citadel’s Losses Add to Mr. Griffin’s Pain.
We’re rather indifferent to Mr. Griffin’s pain as we’re sure that he is to ours, but that’s not why we are writing.
We mention the article because it relates to earlier postings and provides […]
In early October, we wrote So Much for the ‘Hedge’ Part of Hedge Funds. In that post, we noted that many equity funds were suffering like the rest of us.
A month earlier, way back on 9/11, in Speculators, Hedge Funds and Lehman Brothers, we disagreed with a subtitle from an article in the previous day’s edition of The Wall […]
If you haven’t read it, For the Vix, 40 Looks Like It’s the New 20 in today’s The Wall Street Journal please know that is a decent column.
We particularly like the paragraph:
“Volatility may not return to its highs, but it isn’t clear when it will get back to normal, either. Volatility breeds fear, which breeds more volatility. There […]
The Curious Case of Robert Rubin
The weekend edition of The Wall Street Journal has a front page interview with Robert Rubin: Rubin, Under Fire, Defends His Role at Citi.
We’ve criticized Citi’s board in the (recent) past, and we’re still particularly fixated on the fact that few directors had financial industry experience. That seems neither wise nor even prudent for a financial […]
That’s a title we never thought that we would write, but before we chase away our regular readers who share our political and economic world-view, please let us explain: it’s not as bad as it looks.
In Kimberly Strassel’s WSJ column, Hillary of State, Ms. Strassel describes how the mainstream media have now returned to providing a favorable […]
This post greatly expands upon a comment we made about regulation in Even A Perfect Bailout Will Fail and possibly elsewhere.
Regulators as wise monkeys.
Today’s The Wall Street Journal has an article entitled, Bank Examiners Are Told to Step Up Sanctions on Lenders.
The first sentence of the article says it all: “The U.S. government’s armies of bank examiners have been ordered to […]
In today’s (November 26) edition of The Wall Street Journal, there is a Deal Journal article entitled, “Paulson Plan: ‘Truly Idiotic.’”
Although we’ve not gone that far in describing TARP et al, we’ve been harshly critical of Mr. Paulson. In fact, we’ve mentioned that his series of actions don’t seem to constitute an actual plan, because the word […]
