For First Time Ever PIIGS Fly Higher Than BRICs

For the first time ever, the combined risk of the PIIGS (Portugal, Italy, Ireland, Greece and Spain) is greater than that of the developing BRICs. China is now well on its way to global domination and risk-haven status. Renminbi reserve currency anyone?

An In-Depth Evaluation Of Morgan Stanley's Real Estate Portfolio - Part 1

As was pointed out yesterday, Morgan Stanley's massive Real Estate empire is starting to unravel building by building. With a building here, five buildings there, the shareholder pain, and the writedowns start accumulating. But it was not always makeshift tears and walking away from buidings when your equity is underwater. In those long ago days of 2005 it was hope and bubblemania. Which is why we dug up various Morgan Stanley Real Estate Fund documents and materials, exposing the firm's delirium just as the peak in the real estate bubble was about to set in.

Is Clear Channel's $2.5 Billion Upsized Bond Offering An Event Of Default?

Yesterday CCU surprised the bond world by upsizing its $750 million bond offering, which Zero Hedge highlighted previously as an indication of the top-tick exuberance in the bond market, to $2.5 billion. And according to preliminary rumors it may very well have been the top, with Thomson Reuters' IFR service saying that "counsel for certain lenders has delivered a letter asserting that the transaction and the UOP was an event of default under the CCU Credit Agreement." This is not good for CCU, which had hoped it had sufficiently placated dissident bondholders when it dramatically changed the use of proceeds of the upsized transaction.

DXY Passes 78, 135% Annualized Move In Past Two Weeks

Was it a mere two weeks ago that the dollar was at the year's lows? This is what a (moderate) squeeze looks like: a 135.8% annualized move. Last time the DXY was here was on September 8. And yet stocks are still confusing a higher dollar with strength. Look for a snapback.

The European AIG: How Moody's Downgrade Of Greece Can Start The Avalanche

As one so vividly remembers, probably the key catalyst that set off the chain of events last fall following the collapse of Lehman were the closed loop (and much delayed) downgrades of AIG, which in a span of hours went from AAA to much lower, thus springing various collateral requirements which the company could not satisfy, and in turn forcing even more downgrades, until ultimately it became clear that the firm (like most others on Wall Street) is merely a lot of hot air and unjustified valuations. Ironically, the rating agencies, and more specifically Moody's, could once again be the catalyst for the much anticipated collapse of the European house of cards, which as all now know, has Greece as its weakest link. The threat: a Greek downgrade by Moody's from its current rating of A1 to anything with a B handle would make the country's sovereign debt ineligible for ECB collateral in 2011, sparking a sovereign liquidity crisis. Recall that both Fitch and S&P recently downgraded Greece to BBB+, implying that the fate of Greece, and specifically its ability to access cheap and quick capital via the ECB, could be cut off on the whim of the rating agency that Warren Buffett himself can't stop selling enough of.

Frontrunning: December 18

• Skies darken for Ben Bernanke nomination (Politico)
• Discord behind TARP payment (WSJ)
• UK public sector net borrowing hits record high in November (BBC)
• The Great stabilization: The recession was less calamitous than many feared. Its aftermath will be more dangerous than many expect (Economist)
• Bank of England official says crisis shows U.K. bank exodus may be no bad thing (Bloomberg)
• Obama loses lending lever as Citigroup, Wells Fargo repay TARP (Bloomberg)

Daily Highlights: 12.18.09

• Asian stocks fall on concern banks will need to raise more equity.
• Bank of Japan keeps its benchmark interest rate at 0.1% in unanimous vote.
• Dollar rises, stocks fall worldwide as Greek downgrade fans safety demand.
• European Union approved a 6 percent increase in spending next year.
• German Business confidence probably rose to the highest since July 2008.
• Initial Jobless Claims in US unexpectedly increased to 480,000 last week.
• Japan central bank says it won't tolerate deflation; holds key interest rate at 0.1 percent.
• Japan shares down as banks retreat on prospect of more stringent capital requirements