Economy Blog

It seems my background check, part of my new-hire process, has pulled up some flags. My postings here on DealBreaker will, therefore, not appear in my name. Whoever that woman in the back office is, she won’t add my name to the system until the little issue with the FBI is resolved, so in the meantime I’ll just have to make do with this somewhat crippled account.

The great binge-purge cycle of investment bank human resources has drawn, it seems, into its second half. (Maybe we l…
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$$$ Wesley Snipes’s tips for filing your 2007 tax returns [NewsGroper]

$$$ “Yahoo Sucks”– Tim Sykes [TS]

$$$ The Bear Stearns Companies Inc. (BSC)

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I grew up in a time when markets were considered to be "continuous." Portfolio insurance. Robert Merton’s 1987 treatise C…
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Clear Channel and the two private equity firms that planned to take it private, Bain Capital and Thomas H. Lee Partners, plan to sue Citibank and other lenders, The Deal Is reporting.

Shares of Clear Channel dropped softly yesterday after The Wall Street Journal reported on its website that the banks and the buyers had “failed to resolve their differences over final financing terms” and warned the deal was near collapse. The Clear Channel deal would be one of the biggest leveraged buyouts to collapse in the credit crunch.
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The Cambodian economy is expanding so quickly that it has outgrown its power-generating capacity by a third. Prices for electricity are much higher than in Vietnam or Thailand, its bigger neighbors. In order to keep the investment and construction going, Cambodia has to keep the juice flowing. But how?
Results of Cambodia’s earlier [...]…
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SAC Capital psychologist in-residence Ari Kiev has a new book out. In Hedge Fund Leadership, Kiev shares the tools all leaders must line their arsenal with in order to inspire peak performance in their traders and money managers. It’s based on the principles he’s put into practice up in Stamford, which have made what started out as a 2-bit boiler room into the powerhouse fund it is today.

Tool #1: I tell all my patients that pecs are good but breasts are twice as nice. Having taken the Hippocratic Oath, I cannot in good faith write prescriptions for estrogen without meeting with you or your employees first, but I can tell you that there are ways to get around this. Many of my patients have done so.
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(March 26, 2008 12:09 PM, by Arnold Kling) From Jack Weatherford, Genhis Khan and the Making of the Modern World, p. 221: The expansion and maintenance of the……
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Over 200 protesters from a housing advocacy group made it inside Bear Stearns corporate offices at 47th and Park Avenue. The protest was organized by the Neighborhood Assistance Corporation of America, which was founded by union activists. (They were the ones in the yellow shirts.) After being ejected from Bear’s lobby, they headed over to JP Morgan Chase. And, a few moments ago, they seem to have wandered off to do whatever it is demonstrators do after a demonstration. (We’re guessing: wait in TKTKS line for X…
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A class action lawsuit was filed in federal court yesterday against Merrill Lynch, hours after we reported that Merrill had been threatened with suits by brokerage customers whose assets were frozen in auction rate securities. Merrill is the latest entrant in a club that includes Morgan Stanley, Deutsche Bank and UBS, all of whom have been separately sued over alleged deceptive marketing of auction-rate securities.

Merrill also faces a separate arbitration claim from ASTAR Air Cargo, which seeks compensatory damages of $9.125 million and punitive damages of at least $27.375 million. ASTAR, an air carrier based in Wilmington,Ohio, filed the claim with the Financial Industry Regulatory Authority to gain access to ASTAR’s funds that currently are frozen in illiquid auction rate securities in the company’s Merrill Lynch account.
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In chronicling the near-collapse of a 85 year-old firm, a sober voice is required to distill the hubris, folly, carnage and ultimate tragedy found within. That voice belongs to Charlie Gasparino. The Post reports that the CNBC on-air reporter will receive a $400,000 advance from HarperCollins to write the definitive guide to the fall of Bear Stearns. Early drafts are said to have stoked some angst among editors because Gasparino peppers his prose with exclamations such as the following excerpt: “For some, the most apparent sign of Cayne’s disregard for the mounting difficulties at Bear came in August 2007, when he left a conference call early to play golf. Mamaluke!”

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(March 26, 2008 11:11 AM, by Bryan Caplan) I’m frankly puzzled by Tyler’s latest attack on the signaling model of education. Not only does he merely repeat an……
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In my post about moving I left out one important detail: myself and my entire family are shifting from PC to Apple. We’ve been living in transition for a few years so we held off on making a platform switch, and I wanted to integrate changing computer and music environments until we moved into our new place. And tomorrow is the day.

We’re getting an iMac with a giant screen for family use in the kitchen. MacBooks for my wife and boys. A MacPRO for my office and a MacBook Air for travel. An AppleTV for the family room. An Apple Time Capsule and AirPort Extreme for storage. We’ve gotten a taste of Apple as my older son got a MacBook last year, and I’ve seen first-hand how incredibly easy it is to operate in an Apple environment. I’ve spent so much time a…
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Last fall, we questioned whether alternative energy could produce alpha. Today, one leading environmental technology investor takes issue with that assessment….
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Imports accelerated in February, while exports remained strong.…
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Government intervention impairs industrial sector.…
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This would be funny if parking lot spot market employment for white collar jobs didn’t look like a best case scenario for so many people right now.

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The entire staff of DealBreaker is being let go. From now on the site will be written by a computer we stole from Citadel’s Ken Griffin.

On to another, even schlockier DB: Did a bunch of directors and VPs in Deutsche bank Lev Fin get laid off yesterday? Are cuts in industrials and consumer happening today? That’s what we’re told, though our tipster is French and still pissed about the Maginot line so who knows if he’s to be trusted. Biases aside, it would be a plausible solution to the German bank’s “p…
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In a move which can only be deemed totally out of character, Oppenheimer analyst Meredith Whitney wrote in a new research note that things are looking good for Citigroup, and estimated an increase in profits by $2.00 a share for the year.

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(March 26, 2008 08:53 AM, by Arnold Kling) I am going to combine comments on two papers cited by Tyler Cowen. First, he cites a paper on inequality……
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Instead of one big sucky company, we’ll now have two!

Motorola said Wednesday that it would split itself into two publicly traded companies as it struggles to boost its stock price and faces pressure from activist investor Carl C. Icahn.

Motorola said in a statement that it would separate its flagging cellphone unit from its broadband and mobility operations, which encompasses the servicing of wireless networks and the building of television set-top boxes. Motorola shareholders would receive stock in both companies.
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