Commentaries
Now raising intellectual capital
from Rolfe Winkler:
Lunchtime Links 1-6
Let them eat lobster! (Yves, Naked Capitalism)
The weather according to economists: sunny! (Kedrosky) Group think...
How to combat the natural tendency to procrastinate (Economist)
Let's get fisical (Bill Gross, PIMCO) In his latest investor letter, Bill Gross paradoxically laments the influence of special interests. Of course he was one of the chief special interests -- representing the investor class -- lobbying for government to support asset prices. He also questions how the market will perform when our government "sugar daddy" disappears, especially in light of the disappearance of foreign buyers of Treasuries.
Snowed-in Brits boost adultery website (Casciato, Reuters)
Create your own solar system (Colorado.edu) Click "Run Now" and then play with the variables bottom left.
Dubai starbucks (imgur)
Three-toed sloth on ride of his life...
from Rolfe Winkler:
Evening Links 12-7
Update from this morning: Neel Kashkari joins PIMCO (Ishmael, Alphaville)
TARP cost estimate falls $200 billion (Somerville, Reuters) Even after this latest reduction, the administration still estimates TARP will cost $141 billion. We may be getting more back than we though, but we're not making money. Remember, the Fed still has north of $1.0 trillion or mortgage-backed securities on its balance sheet, the value of which is not clear.
Moody's links option ARM performance with subprime (Golobay, HousingWire) Option ARMs were generally considered "prime" loans based on the credit scores of borrowers. We learned last year, however, that credit scores are less indicative of default rates than negative equity. Negatively amortizing option ARMs, which allow borrowers to make a minimum payment that doesn't even cover interest, have seen their loan balances explode. With prices down, they're so far underwater it makes little sense to pay their mortgage...
Dubai builds, but they don’t come
There is something surreal about the financial crisis that has engulfed Dubai.
AÂ small desert emirate, without significant hydrocarbon reserves, Dubai finds itself geared to the eyebrows in the midst of a global downturn. Deutsche Bank estimates its external debts at about $74.3 billion. That, for the record, is 107 percent of the emirate’s expected 2009 GDP, or more than 14 times its government revenues for 2006 (the latest year for which data is available).
But it isn’t just the extreme leverage that is surreal. Dubai has long borrowed heavily to invest. The real twist comes from the wacky way that Dubai has chosen to invest its borrowed cash.
Chocolate-coated IPO to tempt Dubai investors?
Listings in Dubai have been few and far between — despite the best efforts of the emirate’s rulers to encourage foreign companies to float there.
There has only been one IPO completed on the Dubai Financial Market in the past 14 months and that was for construction contractor Drake & Scull in July last year.
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The Wall
