Finance Folly

RSS feed for this section

This category contains 26 posts

Oil Prices: Reason Trumped By Transparent Pandering

By The Prince ⋅ April 30, 2008 ⋅ One comment

The recent rise in oil prices and the corresponding rise in gasoline prices has brought out many complaints from the masses. The rise in prices makes sense given the limited ability to increase the supply of barrels. As wells have become depressurized and the rate of new discoveries has slowed it has become much harder [...]

Investment Bank Regulation Is Changed Forever

By The Prince ⋅ March 25, 2008 ⋅ 9 comments

This morning in the New York Times, Andrew Ross Sorkin draws attention to the the fact that the Fed was calling the shots behind the Bear Stearns "bailout." This point was obvious last week. Just because the price moved from $2 to $10 and there is speculation about whether or not the Fed set the [...]

Is this the real price? Is this just fantasy?

By The Prince ⋅ March 25, 2008 ⋅ Post a comment

25 March 2008 - Here in the City has this lovely song to the tune of Bohemian Rhapsody from last week about the credit crisis. It is pretty well done. "So you think you can fund me and spit in my eye? And then margin call me and leave me to die?"

The Latest Sign of Pressure On the Consumer

By The Prince ⋅ March 13, 2008 ⋅ Post a comment

"Leaning on outside mortgage brokers for home-equity business was "one of the biggest mistakes we’ve made." Those loans have performed worse than home-equity loans generated by J.P. Morgan." -Charles Scharf, head of J.P. Morgan’s retail business.
The Prince, like many financial bloggers, has followed the plight of the increasingly burdened U.S. consumer for some time. (See [...]

Is FICO a Good Metric for Originators?

By The Prince ⋅ March 6, 2008 ⋅ Post a comment

Richard Bitner recently released a book about the mortgage meltdown from the perspective of an originator of Mortgages. The book, entitled Greed, Fraud & Ignorance: A Subprime Insider’s Look at the Mortgage Collapse, gives investors some food for thought in considering the faults in the originate, securitize, and issue to investors chain that mortgages went [...]

Banks Thinking Long-Term on Analyst Recruiting?

By The Prince ⋅ March 5, 2008 ⋅ One comment

Every school year aspiring financiers or merely financial opportunists begin the summer and full-time investment bank recruiting process. The most prized positions in the capital markets and investment banking divisions are intensely desired by these undergraduates. Each student dreams, realistically or not, to snag a spot in the M&A group at the most prestigious bank [...]

Microsoft Talking to Little Company named Yahoo?

By The Prince ⋅ March 4, 2008 ⋅ Post a comment

4 Mar 2008 - Take a look at this excerpt from a piece on Deal Journal.
Today at a Morgan Stanley Technology Conference, Microsoft finance chief Chris Liddell brought up, completely voluntarily, the company’s bid for Yahoo. Here is the conversation between Liddell and Morgan Stanley technology analyst Mary Meeker, from an SEC filing: [...]

Munis Should Form Cooperative Entity to Self-Insure

By The Prince ⋅ March 3, 2008 ⋅ 9 comments

The Prince has been following the troubles of the bond insurance business for the last few weeks. Many thanks to Naked Capitalism, Alea Blog, and Information Arbitrage for their commentary to supplement The WSJ. It now appears that many of the largest monolines (bond insurers), if they are able to raise additional capital and follow [...]

CMBS Declines: Speculation or Fundamentals?

By The Prince ⋅ March 3, 2008 ⋅ Post a comment

2 Mar 2008 - Despite many professionals and many of his friends in structured finance telling The Prince that CMBS is a completely different animal than residential MBS, it apperars something is afoot. The Prince must have heard it a thousand times that the fundamentals, financing structures, and incentives in CMBS are more sound than [...]

Buy When There’s Blood in the Streets

By The Prince ⋅ February 27, 2008 ⋅ 2 comments

Baron Philippe de Rothschild, ever an opportunist, is said to have advised, “Buy when there’s blood in the streets.” Investors like Warren Buffett do just that all the time. Hedge funds have been set up specifically to take advantage of carnage in the markets. But for some inexplicable reason, many corporate C.E.O.’s can’t seem to [...]