Economy Blog

A number of large money center banks and brokers walked away from the role of using their capital to support the auction-rate markets. The market has been in place since 1984. Its size is now estimated at $324 billion. Although the paperwork for these bonds says that the banks have no obligation to create and maintain the market, the question is whether their actions involved misleading marketing or a failure to disclose the risks of these instruments. Two weeks ago, these markets, which has had only seen thirteen failed auctions over twenty-four years had 480 failed auctions on February 20….
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And the growth trend likely to continue.…
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Interest rate hikes and deteriorating global outlook push consumer outlook to 18-month low.…
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Ambac (NYSE: ABK), the down-on-its-luck muni-bond insurance company may get rescued by several large banks. If the reports are to be believed, Citigroup (NYSE: C), UBS (NYSE: UBS), and Wachovia (NYSE: WB) will put up as much as $3 billion to help Ambac which insures over $500 billion in bonds, many of them for municipalities In addition to muni-bonds, Ambac has a huge book of consumer debt and mortgage-backed financial instruments which it has insured with it “AAA” rating, and this part of its book is falling apart as those markets fail. Banks own much of this paper and if…
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While fourth quarter GDP supports the Thai baht.…
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addslashes(LL Cool J: Mama Said Check This Out

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Electronic Arts (NASDAQ: ERTS) has disclosed that it made a $26 all-cash offer for smaller video game publisher Take-Two (NASDAQ: TTWO). The total value of the deal is about $2 billion. It is a bit odd that shares in Take-Two took off earlier in the week. Early on Wednesday that stock traded for $15.60. By the close on Friday, the shares hit $17.36. The chairman and CEO of Take-Two recently signed long-term employment contracts. Those were executed on February 15. The offer for the company was made by letter on February 19. Douglas A. McIntyre
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Even though China’s economy is expected to slow.…
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A heartwarming story of a man who bet 50p on the horses and won £1 million. Except the odds were actually 2.8 million to one, which means he should have won
£1.4 million, and he’s short to the tune of $787,000: his bookmaker, William Hill, caps its payout at £1 million, which I’m sure is not something this chap knew when he made his bet.
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The New Zealand dollar returns to near 23-year high.…
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By Vipin Agnihotri Indian Finance Minister P Chidambaram will present this year budget on February 29. The India Street wants to give you some exclusive information…
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This is the best chart I’ve seen all year, it’s a bit like the NameVoyager for movies. It has time along the x-axis and weekly box-office receipts along the y-axis, which means that box office grosses are reflected in long and wavy areas. Truly it’s a thing of beauty.
The chart is great in the print edition, but it’s even better online, where it goes all the way back to 1986. Just look at the longevity of Top Gun, from that year: no blockbuster behaves remotely like that any more. The turning point seems to be the summer of 1989, when the opening-weekend blockbuster as we know it today starts to make its mark: Indiana Jones and the Last Crusade, Batman, Ghostbusters II. There are still long-runners after that point (Ghost, Titanic), but by the time we get to the present day, it’s all over: the graph is a series of spikes.
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The FDA has approved Genentech’s (NYSE: DNA) drug Avastin for the treatment of breast cancer. The product is already Genentech’s top selling drug but is marketed for treating other cancers. Tests by FDA science panels found that the drug does shrink tumors but does not extend patient life expectancy. “All they had was progression-free survival in one trial, no increase in quality of life and patient deaths in the Avastin group,” said Fran Visco president of the National Breast Cancer Coalition. “We’re very confused why FDA made this decision, told MSNBC. Genentech may be taking a product liability risk, which…
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The TSX and the Dow parted ways this week as commodities lifted Canadian markets. Gold, platinum, silver, copper, oil and soft commodities led gains across the TSX and the TSX Venture exchange, though the Dow was not so lucky. Poor economic data and mixed earnings news and guidance, along with continued turbulence in the bond rating and bond insurance markets, offered no support for the U.S. index
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Here is a sneak peek at some links from my weekly Weekend Reading column over at TheStreet.com.  The usual suspects are queued up to challenge the Fed’s efficacy (Bloomberg.com) In era of delays, airport hotels gain popularity (T…
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Forget the story, check out the comments. So many AAPL longs whining. Clearly the stock has further to drop based on all these whiny bulls….
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Prediction market genius.
Eight horses and 50p make punter a millionaire
It started with a horse called Isn’t That Lucky and ended with one called A Dream Come True - a run of eight winners that turned a 50p stake into Britain’s first million pound betting-shop pay-out.
A…
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More and more people are coming to the fore clamoring for Microsoft to find something better to do with its $40-billion earmarked for acquiring Yahoo. The NY Post summarizes things, including this quote from an analyst: "Salesforce.com at 100 percent premium is $12 billion, Omniture at 100 percent premium is $3 billion; and that leaves $30 billion to acquire Facebook."…
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Complexity, leverage, and iffy performance is coming back to haunt the hedge fund complex. (WSJ.com)
Is the golden age of the hedge fund over? (naked capitalism)
AQR Capital Management is the poster child for the problems facing quant funds. (…
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Citigroup said it has provided a $500 million line of credit to support some fixed-income hedge funds, and as a result moved the funds’ $10 billion of assets and liabilities onto its balance sheet.
The Falcon funds are managed by the largest U.S. bank’s alternative investments unit. Citigroup said that by providing the credit facility on February 20, it became the primary beneficiary of the funds, and thus must consolidate them onto its books.
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