• Scary Chart of the Day
    Posted by on June 9th, 2008 at 2:02 pm

    Percent change in borrowing from the Fed’s discount window.
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  • Peering Inside Renaissance Technologies
    Posted by on June 9th, 2008 at 1:23 pm

    James Altucher looks inside Renaissance Technologies, the hedge fund firm that’s delivered 40% a year for many years. Surprisingly, the fund’s equity positions aren’t that obscure. James says that the bulk of the stocks the company holds subscribe to a very simple formula: stocks trading for les than $10 a share, enormous amount of cash, no debt and low market cap.

  • Buffett’s Bet
    Posted by on June 9th, 2008 at 12:47 pm

    Warren Buffett is betting a hedge fund that an investment in its family of hedge funds will underperform Buffett’s unmanaged investment in the S&P 500 over the next ten years. Both sides are putting up $320,000. The combined sum will go into zero-coupon Treasuries that will mature at $1 million ten years from now.
    I’m not so sure that’s a wise bet on Buffett’s part. If it were a large basket of hedge fund, then yes, I’d be all for it. But just one family, eh, I don’t know.
    Buffett’s major point is that hedge fund fees are insanely high. He’s right, of course, but there are plenty of folks willing to pay that sort of fee.
    Now, if there were only some place people could find market-beating advice (for two straight years) that’s completely free and has minimal turnover.
    Hmmm.

  • EMT Takes Another Blow
    Posted by on June 9th, 2008 at 11:03 am

    At this blog, I’ve long argued against the idea of efficient markets. Here’s more proof. On eBay, there was an auction for a $50 Target gift card.
    The winning bid: $55.71.
    Of course, this makes no sense. Neither does writing about efficient markets on a free blog.

  • Just Letting You Know
    Posted by on June 9th, 2008 at 10:32 am

    Nicholas Financial (NICK) is down to $6.35 a share. The book value is $7.70 a share.

  • What’s Behind the Big Jump in Unemployment
    Posted by on June 9th, 2008 at 10:26 am

    On Friday, the government reported that the unemployment rate jumped from 5% to 5.5%, marking one of the largest jumps in decades. The increase was especially large for teenagers (up 3.3% to 18.7%). So what’s going on?
    Mark Perry has one explanation, the increase in the minimum wage. Last year, Congress hiked the minimum wage from $5.15 to $5.85. That’s not all. Next month, it will rise again to $6.55, and next year it will rise still more to $7.25. That’s a 41% increase and it will be the largest two-year increase in 50 years.

  • Lehman Drops Bomb
    Posted by on June 9th, 2008 at 10:18 am

    Wall Street had been expecting Lehman Brothers to post a loss of a couple million here and there. Turns out, a couple million was really 2800 million. This is their first-ever loss since going public. The company is also going to raise $6 billion in new capital.
    Adding insult to injury, Jenny Anderson writes:

    Lehman Brothers, among the smallest players on Wall Street, announced on Monday that it will raise up to $6 billion in fresh capital from investors.

    Jeez, it’s one thing to lose money, but there’s no need to get phallic. The shares are getting smacked today, but they’re still above the panic low from March.
    Bess Levin is live-blogging the call.

  • RIP: Bo Diddley
    Posted by on June 6th, 2008 at 5:28 pm


    He also appeared in Trading Places.

  • Billionaire Drug Bust
    Posted by on June 6th, 2008 at 12:03 pm

    The Smoking Gun is on the scene:

    The billionaire apparently did little to conceal his drug transactions. On one occasion, in the lobby of Broadcom’s southern California headquarters, he directed an employee to provide cash to a courier “in exchange for an envelope containing controlled substances,” the indictment charges. On a drug-fueled 2001 private plane flight–during which Nicholas allegedly used and distributed narcotics–the pilot was forced to don an oxygen mask due to the “marijuana smoke and fumes.” According to a March 2008 Forbes story, Nicholas, with an estimated net worth of $1.8 billion, is ranked 677 on the list of the world’s wealthiest individuals.

  • Huge Jump in Unemployment
    Posted by on June 6th, 2008 at 9:56 am

    The government reported today that the unemployment rate jumped from 5.0% to 5.5%. Many news outlets are saying that this was the largest increase in 22 years. I broke down the data into a few more decimal places, and it’s actually the largest increase in 28 years. Nonfarm payrolls declined by 49,000.
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