Afternoon Market Summary
Submitted by Tyler Durden on 08/12/2009 - 13:55IG12: 114bps + 1.5 bps (weaker)
IG12 intrinsics: +6 bps (much weaker)
HY12: 791bps + 10 bps (weaker)
HY12 intrinics: +31 bps (much weaker)
30 Year: 4.52%, +8 bps (weaker)
DXY: poundage
Equities: who cares, just feed more redbull to WOPR
Substantial Confusion Percolates On Volume Ramp
Submitted by Tyler Durden on 08/12/2009 - 13:38
Left Right Left Right Up Down Up Down A B A B Reset Start (Triangle Square for extra lives)
FOMC Minutes
Submitted by Tyler Durden on 08/12/2009 - 13:17QE Ending: "To promote a smooth transition in markets as these purchases of Treasury securities are completed, the Committee has decided to gradually slow the pace of these transactions and anticipates that the full amount will be purchased by the end of October."
The Feds & UBS Reach a Squeal of a Deal
Submitted by Travis on 08/12/2009 - 12:28Yeah, the Swiss... "Oh, they're neutral? right?" Haven't they always been? "They say nothing?" Well, maybe not then- but now, the Feds and UBS AG have reached a deal to squeal on some 52,000 potentially tax-evading Americans.
$23 Billion 10 Year Auction Results
Submitted by Tyler Durden on 08/12/2009 - 12:13
Results out: only $14.4 billion indirects tendered out of total $57 billion competitive. Of the $14.4 billion, $10.4 billion was allocated. Indirect bids 45.7% vs. Avg. 35.25% (Prev. 32.11%). Indirect bid-to-cover was 1.39. Overall bid-to-cover including highly motivated primary dealers was 2.49. Allocated at 3.734% high yield vs expected 3.708%.
IWM-SPY Unwind In Process?
Submitted by Tyler Durden on 08/12/2009 - 11:47
Crap stocks (RUT) outperforming quality (SPY) again. The early morning action was likely precipitated by some colorful index arbing.
CLSA's Jim Walker On Asia: The Game Is Up
Submitted by Tyler Durden on 08/12/2009 - 11:33"For 2009, and perhaps beyond, preservation of capital will again be the name of the game. Cash is king with a liberal helping of government securities in the portfolio as well - even at today's richly inflated prices. Our key message to investors is that the asset management game has now changed. Unfortunately, for those that believe we are still in the same economic world as was the case in the Greenspan era, the game is up."
Dollar Plummets
Submitted by Tyler Durden on 08/12/2009 - 11:20
The newly hired traders at the Federal Reserve proving their mettle.
Art Samberg In Trouble: SEC Has Issued Wells Notice To Pequot Alleging Insider Trading In MSFT In 2001
Submitted by Tyler Durden on 08/12/2009 - 10:56Developing story
Massive Early (Terminal) Squeeze Withering
Submitted by Tyler Durden on 08/12/2009 - 10:47
Someone threw in the towel this morning, and volume exploded. Subsequent to the initial exuberance volume has been retracing to average, and will promptly turn below average in the next few minutes.
A Sale is a Sale...
Submitted by Travis on 08/12/2009 - 10:27In what may just be a valiant effort to raise cash- JP Morgan is looking to unload some 23 office properties... They're selling. Not financing. I'm reading this as- "getting the f-out of Dodge..."
Taleb On The Other Perspective
Submitted by Tyler Durden on 08/12/2009 - 10:07Love him or hate him, he has been right before, and is very likely correct again. Pay particular attention to Nassim's claim on the impact of marginal buyers: exemplified all too well by the 10.8% decline in short interest in the second week of July and the resulting 9% squeeze in the S&P.
Standard Chartered On The End Of China's "V"
Submitted by Tyler Durden on 08/12/2009 - 09:53Today’s avalanche of China data suggests that the economic recovery is solid, but that the momentum ebbed in July. What was a V-shaped recovery now seems to be experiencing a little gravitational pull. The slightly weaker-than-expected data means an even smaller chance of an imminent change in macro policy and lends weight to those who argue that it is too early to tighten. Having seen the data early, Premier Wen Jiabao restated at the weekend that the goal was to maintain a proactive fiscal policy and a moderately loose monetary policy.
V-Shaped Revenue Recovery Combined With L-Shaped CapEx Growth
Submitted by Tyler Durden on 08/12/2009 - 09:31And thus the original question is how quickly can the accumulated corporate cash buffer be converted into revenue growth? It seems companies don't really care to answer that: the growth will come from "elsewhere" they will be happy to announce, and refer you to the GDP - where all "growth" comes from transfer payments, and other fictitious items indicating "growth" yet all those merely do is sucker more and more people into the stock market at bubble valuations (why are not more companies doing follow on offerings, absent REITs of course? Is it because institutional stock managers know that valuations, which this is all really about, are simply insane?). Absent some investment in CapEx you can kiss your V-shaped revenue (and thus earnings) recovery goodbye. But who honestly cares about how a stable economy works any more when you have trillions in excess liquidity provided by Bernanke Capital LLC?
Loans Versus Bonds Relative Value: Week of August 6
Submitted by Tyler Durden on 08/12/2009 - 08:25
It's official: irrational exuberance in the secondary market is back. Indicative loans are now at just over 400 bps while bonds are less than double that at 761 bps. Of course, everyone at this point has forgotten the expectation of 20% defaults in HY names by the end of 2009. All shall be well in 5x+ leveraged consumer names wich make mattresses. Not sure if the Sealy loans trading 450 bps outside of bonds is real or not, but who really cares: the bond squeeze could easily push it so tight you would have to pay the company to hold their CCC-rated toxic paper.
