AlacraBlog

Credit Crisis Dominates Q3 Research Zeitgeist

To no one’s surprise, the credit crisis and underlying housing and subprime issues dominated the attention of Research Recap readers in the third quarter. Of the top ten posts, all but one were related to the market meltdown.

The most widely read post was Fitch Ratings’ July warning that US Mortgage Insurers’ Troubles May Worsen. This report proved to be an early warning, as Moody’s put several of these insurers on watch for possible downgrade earlier this month.

The next most read post was NERA Economic Consulting's July report  Subprime-Related Litigation on the Rise, which was buttressed by a Stanford Law School analysis showing that subprime lawsuits were running at double last year's pace.

In all, eight of the top ten posts and four of the top five focused on the ongoing fallout from the credit crunch, including posts on hedge funds, housing, junk bonds, and credit default swaps. Other topics piquing the interest of Research Recap readers were oil production and clean technology.  In a testament to the staying power of good research, one post, based on an International Monetary Fund examination of the role of hedge funds in the subprime crisis, remained in the top ten several months after publication in December 2007.

The top ten posts for the quarter were:

1. US Mortgage Insurer's Troubles May Worsen (Fitch Ratings)
2. Subprime Related Litigation On The Rise (NERA Economic Consulting)
3. US Oil Production Flat Over Past 4 Years (Ernst & Young)
4. Role of Hedge Funds in Subprime Crisis Examined (Int'l Monetary Fund)
5. Speculation Does Not Explain Apparent Housing Overvaluation (Oxford Analytica)
6. Global Junk Bond Default Rate Doubled in First Five Months (Moody's)
7. Lehman Failure's Impact on European Banks (Standard & Poor's)
8. Credit Default Swaps Adding Rather Than Mitigating Risk? (Audit Integrity)
9. Guide To Interpreting Mark-to-Market Losses of Monolines (Moody's)
10. Greentech Expected to Lead Resurgence of IPOs in 2010 (KPMG)

Interestingly, this quarter, Moody's Investor Service was the only content provider to have two posts among the top 10, as readers sought a diverse set of voices to help understand critical market events. The one post not related to the credit crunch was KPMG's post looking forward to "greener pastures" in 2010.

Research Recap readership has steadily increased during the year since its launch. According to editor Angus Robertson, “readers have found its coverage provides explanation and analysis of topics that once were once considered obscure, but have been our bread and butter for more than a year."

Research Recap is a free site that highlights credit, investment, economic and industry research which our editors find compelling. Posts are also available for free via RSS or a daily summary email.

Live From Las Vegas, It's Blog World

(posted by Barry Graubart)
More than 4,000 bloggers have converged on Las Vegas this weekend for the second annual Blog World Expo. Blog World features roughly 200 speakers speaking about all areas of blogging from Milblogs (military), godblogs, sports blogs, political blogging and blogs about virtually every topic you might imagine.

Later this afternoon, I will moderate the Financial Blogging panel with four esteemed speakers:

• Paul Kedrosky, senior fellow at the Kauffman Foundation, strategist for quant fund Ten Asset Management and a frequent financial speaker on CNBC
• Felix Salmon, author of the Market Movers blog on Conde Nast Portfolio.com.
• Jim Ledbetter, Editor of the just-launched The Big Money, a Slate property; and
• Howard Lindzon, hedge fund manager and founder of Wallstrip.com

This week's market events made clear the value that many of these alternative media voices add to providing understanding of critical market events. While traditional Wall Street analysts continue to play an important advisory role, their role has been diminished in recent years due in great part to the Spitzer settlement and its impact on the economics of sell-side research. Today, you're just as likely to find critical analysis coming from a hedge fund manager, an industry analyst or other opinion leaders, many of whom use blogs to communicate their ideas.

Alacra clients have recognized the potential value of the alternative media, yet are often constrained by the need to not overwhelm their users with a fire hose of sources, each of varying quality. Alacra is currently working with a handful of clients to make available a carefully filtered set of blog content. We'll have more details to share in the coming weeks, but for those interested, feel free to drop me a note at barry-dot-graubart-at-alacra-dot-com.

Are you at Blog World? Stop by to say hi after my session, send me an email or drop me a tweet @graubart and I'd love to say hello.

Our Summer Innovation Cycle

The end of summer brings many memories. For Alacra, one of the best parts of summer is that we recruit summer interns to work on new projects. This summer, we were joined by two interns - Hiren Surti and Han-Hsuan Liu.

Hiren and Han worked on a couple of brand new Alacra initiatives, both focused on integrating alternative media (blog) content with more traditional news and research.

Hiren, a finance and marketing major, who will graduate from NYU in May, worked on the research for the new products, both of which will be released this fall.  The first of the new offerings will extend the Research Recap brand to a series of vertical market microsites. Hiren performed the research to define the content for these microsites, the first of which will focus on energy, green technology and the subprime mortgage crisis.  Han, a candidate for his MS in Electrical Engineering from Columbia this December, led the development efforts for the new microsites using Drupal, the open source content management application.

The new microsites, which will integrate carefully selected news and blog content, along with relevant premium business information from the Alacra Store, will go live in a few weeks.

The second initiative this summer focused on identifying critical information from both blogs and news feeds.  I'll share more information on that in the coming weeks as we move closer to a full announcement.

Each summer, Alacra is invigorated with an energy and creativity generated by the fresh new ideas our interns bring and spur in others. Our challenge is to maintain that level of enthusiasm in our product innovation process until the next summer comes.