» Posted by Martin Weil on November 28, 2009

"Property developers tend to be highly geared and very procyclical in their revenue flows and access to the capital markets. During construction slumps they drop like flies. Because the property sector is risky (ask Donald Trump), its creditors tend to get better interest rates... If you earn a risk premium during good times, you should not moan when the borrower defaults from time to time when the going gets tough...
Property companies don't fall into the systemically important category. Their collapse is painful for their shareholders, creditors and, if the local labour markets are weak, their employees. They are not, however, systemically important. Their collapse will not threaten the delicate fabric of financial intermediation. They are fit to fail. Creditors beware."

William Buiter, writing of Dubai in the FT, lays out a basic lesson for real estate investors everywhere.

» Posted by Martin Weil on November 27, 2009

File under "If it's too good to be true," a continuing series.

» Posted by Martin Weil on November 25, 2009

I continue to be incredibly impressed by the advice handed out at Penelope's Trunk. Here are her thoughts for how to succeed in the workplace if you have Asperger's.

» Posted by Martin Weil on November 25, 2009

This according to the newest data from the Organization for Economic Cooperation and Development. Chart courtesy of the NYT's Economix blog.

» Posted by Martin Weil on November 23, 2009

More or less what I am hearing from an awful lot of Wall Street professionals who are frustrated and disappointed with the Obama Administration's coddling of the financial system in the wake of its egregious failure to regulate itself.
Tip The Big Picture

» Posted by Martin Weil on November 23, 2009

Chimerica constituted a credit line from the People's Republic to the US that allowed Americans to save nothing and bet the house on, well, the house.

Niall Ferguson calls for the Chinese to end their currency peg to the USD before even more damage is done to the world's financial system.

» Posted by Martin Weil on November 21, 2009

Written by Mitsubishi to bailout Morgan Stanley on October 13, 2008. Apparently a check was written for this unusually large amount as banks around the world were closed for Columbus Day and a wire transfer was not possible.

Link from Clusterstock

» Posted by Martin Weil on November 18, 2009

We've greatly increased the chance of a Japanese-style lost decade, with I would now give roughly even odds of happening. Why? Because bank-friendly policies have squandered public trust in all government action: try talking to the general public about stimulus, and it's all confounded in their minds with the deeply unpopular bailouts.

Paul Krugman as reprinted by Felix Salmon

» Posted by Martin Weil on November 16, 2009

is my favorite of the five career recommendations for the young offered at Penelope's Trunk. The deeper I read into this site, the more I like it. Highly Recommended!

Pointer by Marginal Revolution.

» Posted by Martin Weil on November 16, 2009

I somehow managed to miss reading Peter Bernstein's seminal Against The Gods when it first came out in the 1990s. My loss. For the lay person or even the professional interested in understanding risk and the capital markets, this book is an absolute must-read.