Archive for 2007

  • The Write-Off
    , October 1st, 2007 at 3:02 pm

    UBS to write off $3.4 billion

    UBS AG, the world’s largest wealth manager, unveiled $3.4 billion in losses, swept out senior managers and slashed jobs in one of the biggest casualties yet worldwide from the credit crunch.
    UBS said on Monday it would write down 4 billion Swiss francs ($3.42 billion) in losses in its fixed income portfolio and elsewhere, resulting in a third-quarter loss of 600-800 million Swiss francs, its first quarterly loss in nine years.
    UBS said it would shed 1,500 jobs in its investment bank.

    Can they do that?

    Jerry : So were going to make the Post Office pay for my new stereo?
    Kramer : It’s just a write off for them.
    Jerry : How is it a write off?
    Kramer : They just write it off.
    Jerry : Write it off what?
    Kramer : Jerry all these big companies they write off everything
    Jerry : You don’t even know what a write off is.
    Kramer : Do you?
    Jerry : No. I don’t.
    Kramer : But they do and they are the ones writing it off.
    Jerry : I wish I just had the last twenty seconds of my life back.

  • Fox Business News Is Coming
    , October 1st, 2007 at 2:23 pm

    Fox Business News is coming October 15. The Web site is now live.

  • Buy List Update
    , October 1st, 2007 at 11:19 am

    Now that we have three quarters under our belt, let’s look at the Crossing Wall Street Buy List. For the year, the Buy List is up 1.88% compared with 7.65% for the S&P 500 (dividends not included). The Buy List has been about 7% less volatile than the S&P 500.
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  • Predatory Lenders Are Now Murdering Little Girls
    , October 1st, 2007 at 11:09 am

    With today’s announcement from Citigroup, the subprime may still have a ways to go, but the political issue is just getting started.
    Yesterday’s Washington Post had an absolutely wretched article by Jim Rokakis, the treasurer of Cuyahoga County, Ohio. It’s almost something out of the The Onion. He basically blames the death of a little girl and an elderly man on predatory lenders. I’m not exaggerating:

    Twenty years ago, the Slavic Village neighborhood of Cleveland was a tightly knit community of first- and second-generation Polish and Czech immigrants. Today, it’s in danger of becoming a ghost town, largely because a swarm of speculators, real estate agents, mortgage brokers and lenders saw an opportunity to make a buck there.
    You could say it was because of them that 12-year-old Asteve’ “Cookie” Thomas lost her life on Sept. 1, shot in Slavic Village when she stumbled into the crossfire of suspected drug dealers.

    No, you can’t. You could, however, blame her death on the suspected drug dealers who fired at her. I’m going to take a wild guess and say that they’re probably actual drug dealers as well.
    It gets worse:

    The Federal Reserve’s recent decision to cut interest rates may calm the nerves of Wall Street bankers, but it won’t bring back Cookie Thomas or Joe Krasucki.

    Vile.
    I think another Sarbanes-Oxley is on the way.

  • Can We Turn Off Our Emotions When Investing?
    , October 1st, 2007 at 10:49 am

    Joe Nocera has an interesting story about investing and emotions (via Mankiw).

    “There is a story in the book about Harry Markowitz,” Mr. Zweig said the other day. He was referring to Harry M. Markowitz, the renowned economist who shared a Nobel for helping found modern portfolio theory — and proving the importance of diversification. It’s a story that says everything about how most of us act when it comes to investing. Mr. Markowitz was then working at the RAND Corporation and trying to figure out how to allocate his retirement account. He knew what he should do: “I should have computed the historical co-variances of the asset classes and drawn an efficient frontier.” (That’s efficient-market talk for draining as much risk as possible out of his portfolio.)
    But, he said, “I visualized my grief if the stock market went way up and I wasn’t in it — or if it went way down and I was completely in it. So I split my contributions 50/50 between stocks and bonds.” As Mr. Zweig notes dryly, Mr. Markowitz had proved “incapable of applying” his breakthrough theory to his own money. Economists in his day believed powerfully in the concept of “economic man”— the theory that people always acted in their own best self-interest. Yet Mr. Markowitz, famous economist though he was, was clearly not an example of economic man.

  • West Side Story at 50
    , September 28th, 2007 at 7:36 pm

    West Side Story opened 50 years ago this week.

  • Bed Bath & Beyond’s Earnings
    , September 28th, 2007 at 12:55 pm

    I didn’t have a chance to write about this before but Bed Bath & Beyond (BBBY) earned 55 cents a share for its fiscal second quarter.
    Here are the earnings results going back a few years:

    Quarter Sales Gross Profit Operating Profit Net Profit EPS
    May-99 $356,633 $146,214 $28,015 $17,883 $0.06
    Aug-99 $451,715 $185,570 $53,580 $33,247 $0.12
    Nov-99 $480,145 $196,784 $50,607 $31,707 $0.11
    Feb-00 $569,012 $238,233 $77,138 $48,392 $0.17
    May-00 $459,163 $187,293 $36,339 $23,364 $0.08
    Aug-00 $589,381 $241,284 $70,009 $43,578 $0.15
    Nov-00 $602,004 $246,080 $64,592 $40,665 $0.14
    Feb-01 $746,107 $311,802 $101,898 $64,315 $0.22
    May-01 $575,833 $234,959 $45,602 $30,007 $0.10
    Aug-01 $713,636 $291,342 $84,672 $53,954 $0.18
    Nov-01 $759,438 $311,030 $83,749 $52,964 $0.18
    Feb-02 $879,055 $370,235 $132,077 $82,674 $0.28
    May-02 $776,798 $318,362 $72,701 $46,299 $0.15
    Aug-02 $903,044 $370,335 $119,687 $75,459 $0.25
    Nov-02 $936,030 $386,224 $119,228 $75,112 $0.25
    Feb-03 $1,049,292 $443,626 $168,441 $105,309 $0.35
    May-03 $893,868 $367,180 $90,450 $57,508 $0.19
    Aug-03 $1,111,445 $459,145 $155,867 $97,208 $0.32
    Nov-03 $1,174,740 $486,987 $161,459 $100,506 $0.33
    Feb-04 $1,297,928 $563,352 $231,567 $144,248 $0.47
    May-04 $1,100,917 $456,774 $128,707 $82,049 $0.27
    Aug-04 $1,273,960 $530,829 $189,108 $120,008 $0.39
    Nov-04 $1,305,155 $548,152 $190,978 $121,927 $0.40
    Feb-05 $1,467,646 $650,546 $283,621 $180,980 $0.59
    May-05 $1,244,421 $520,781 $150,884 $98,903 $0.33
    Aug-05 $1,431,182 $601,784 $217,877 $141,402 $0.47
    Nov-05 $1,448,680 $615,363 $205,493 $134,620 $0.45
    Feb-06 $1,685,279 $747,820 $304,917 $197,922 $0.67
    May-06 $1,395,963 $590,098 $148,750 $100,431 $0.35
    Aug-06 $1,607,239 $678,249 $219,622 $145,535 $0.51
    Nov-06 $1,619,240 $704,073 $211,134 $142,436 $0.50
    Feb-07 $1,994,987 $862,982 $309,895 $205,842 $0.72
    May-07 $1,553,293 $646,109 $154,391 $104,647 $0.38
    Aug-07 $1,767,716 $732,158 $211,037 $147,008 $0.55

  • Stocks and Bonds Unite
    , September 28th, 2007 at 10:29 am

    Here’s an unusual recent development.
    From July 3 to September 19, the stock and bond markets moved in opposite directions 80% of the time (I’m using the SPX & TLT).
    But in the six trading days since, they’ve moved in different directions just once.
    Obviously, it’s too early to read any major significance into this, but it’s something worth watching. There’s also the question of what the consequences are.
    If the stock and bond markets are indeed, converging, I’m inclined to think it’s a healthy sign for both markets.

  • Paul Kedrosky on Wall Strip
    , September 28th, 2007 at 9:23 am

    Paul Kedrosky runs Infectious Greed, one of my favorite blogs. Here he is on Wall Strip.

  • How to Make a lot of Money in Five Easy Steps
    , September 27th, 2007 at 7:04 am

    Step #1: Sell everything you own. Sell it all. Stocks, bonds, real estate. eBay your couch, you dog. Everything.
    Step #2: Then convert it all into pre-1982 copper pennies.
    Step #3: Meltdown the pennies.
    Step #4: Sell the copper.
    Step #5: Now use your proceeds to buy back all the stuff you sold. You’ll have more than enough left over.
    The material in a pre-1982 penny is currently worth about 2-1/2 cents.
    Update: It’s not exactly legal.