Loans Versus Bonds Relative Value: Week of July 30
Submitted by Tyler Durden on 08/04/2009 - 08:22
The ripfest is unending. Only 6 HY indicative bonds are trading wider of a 1,000, and 6 loans are risky enough to merit 600 bps or more. A combined 4 bonds and loans were wider for the week out of 60. And in the absence of perma yoyo TRW going either 500bps wider or tighter, it was Neiman Marcus' turn to shine in the "ridiculous gyrations" corner.
Frontrunning: August 4
Submitted by Tyler Durden on 08/04/2009 - 07:51- Personal spending rose 0.4% in June. Incomes fell 1.3%, biggest drop in four years. Max out those credit cards while you can. (Bloomberg)
- China has become a giant ponzi scheme - Chinese stocks are 50-100% overvalued (Andy Xie, via Ritholtz)
- Must read: from plasma physicist to Citadel's nemesis - profile of Misha Malyshev (Crains)
- Bernanke's exit dilemma (WSJ)
- Federal tax revenues plummeting (AP)
Daily Highlights: 8.04.09
Submitted by Tyler Durden on 08/04/2009 - 07:24- Asian share markets were higher Tuesday with commodity-related stocks up.
- Construction spending unexpectedly rises on revival in home sales.
- Germany to champion Magna's Opel bid in Berlin talks.
- Dubai real estate prices down 50%from peak: Property Index.
- Anadarko Petroleum swung to a Q2 loss of $216M on lower prices, output up 12%.
Geithner Loses It After Bair Refuses To Yield Power To Fed
Submitted by Tyler Durden on 08/03/2009 - 21:39It seems the Secretary of the Treasury forgot to take his Xanax on Friday. The WSJ reports that "Timothy Geithner blasted top U.S. financial regulators in an expletive-laced critique last Friday as frustration grows over the Obama administration's faltering plan to overhaul U.S. financial regulation." Presumably the source of Geithner's ire was Sheila Bair's (and probably Mary Schapiro's) unwillingness to yield power over to Bernanke.
Direct Edge CEO Redirects Flash Anger Back To Exchanges
Submitted by Tyler Durden on 08/03/2009 - 20:12So let's get this straight: the exchanges (NYSE, NASDAQ) are blaming the Flash guys (Direct Edge, NASDAQ... yeah that last one makes much sense)... and the Flash guys are blaming collocation (Exchanges, HFT)... At least we have full circular blamage. And Schumer and the SEC are somewhere in the middle, trying to figure out this Frankenstein. Good luck.
Revenue And EPS Deterioration Continues As Earnings Season Progresses
Submitted by Tyler Durden on 08/03/2009 - 19:36
It was a short 5 days ago that we wrote about CNBC's misrepresentation of this earnings season as a stellar success for companies. Earnings and revenues were down 32.4% and 15.1% then. Since then the economic situation has deteriorated even more: as of today earnings were down 33.4% and sales have declined 17.4%, respectively, quarter over quarter. And while earnings are now supposed to increase by 114.9% in two quarters by inhaling green shoots and what not, more curious is out of what hat will revenues stage a dramatic 22% increase in just 6 months. If anyone held a gun to my head to indicate when disappointment with guidance/analyst expectations would finally set in, i would have to say middle of February 2010 when miss after miss, both top and bottom line, will demonstrate just what an unjustified joke this rally truly is.
Credit Suisse's Dan Mathisson Doesn't Use Flashed Orders Except When He Does
Submitted by Tyler Durden on 08/03/2009 - 15:04"We may not directly respond to flashed order, but for the allotted time, which is milliseconds, that destination would be heavily weighted if we have an order on the opposite side of the flashed order." - Credit Suisse
We Have Inverse Lift Off
Submitted by Tyler Durden on 08/03/2009 - 13:23Correlation to market: looks about -1.000000, give or take. Give Bernanke a Purple Heart for taking some serious shrapnel in the buttock as a proxy for the ass of the economy he was sworn in to protect. Once the DXY hits 0 (just a few more days, patience), he should be first in contention for the Congressional Medal of Honor and Destroying the Enemies Of Wall Street (CMOHADTEOWS).
Momo Quant Shops Hiring, No Prior Finance Experience Necessary
Submitted by Tyler Durden on 08/03/2009 - 13:03Quant shops are now aggressively seeking to expand as momo trading is the new killing it. So if you have heard of pattern matching and heatmapping, feel free to apply. Even better if you know nothing about finance and economics.
SEC Charging Bank Of America With Making False And Misleading Statements
Submitted by Tyler Durden on 08/03/2009 - 11:34Update: All is now taken care of - BAC settles with the SEC for $33 million, less than an hour after the suit becomes public. And... it's gone. The market ramp can now continue with commercial interruptions from the Federal Reserve of the United States.
Apparently BAC screwed the pooch with misrepresenting the Merrill acquisition. Shocker. Will the SEC next pursue Hank Paulson and Ben Bernanke for enforcing this material misrepresentation? Mozillo's legal bill is already being footed by taxpayers, can we at least get a twoofer special here please?
CIT Halted... Again
Submitted by Tyler Durden on 08/03/2009 - 11:13As the market has again forgotten what a TICK < 1,000 is, CIT wants to fast forward straight to its price being $10+/share like in the good ole' days.
Guest Post: Savings Vs. Profits
Submitted by Tyler Durden on 08/03/2009 - 10:43The bad news is that the earnings recession is far from over. Earnings and businesses in general will have to adapt to the new economic landscape of savings. That means cost-cutting, streamlining, wage deflation, unemployment, capital destruction and margin-squeeze across the board.
The good news is that the macro economy – despite many government efforts to stop this process – is now finally on its course towards a long-term, sustainable equilibrium. We will return with more details later on how such an equilibrium might look.
The Spectacular Blow Up Of Huron Consulting
Submitted by Tyler Durden on 08/03/2009 - 09:30In case you missed it, one of the more interesting bits of information today was the spectacular blow up by Huron Consulting Services. The company basically restated its last 3 years of earnings, sacked its Chairman and CEO, and killed its stock (HURN) which at last check was down 70%.
Guest Post: A Grand Unified Theory Of Market Manipulation
Submitted by Tyler Durden on 08/03/2009 - 09:04There is much speculation and anecdotal information regarding the rally that began March 6 2009, which have suggested the gains are the result of massive manipulation on the part of the Federal Reserve (FR) and the large institutions that dominate Treasury securities dealing, program trading and the derivatives markets. Traders have reported that traditional indicators and metrics used for market analysis stopped working for periods of time or altogether, and that correlations among markets have been erratic and quick to change. Record program trading by Goldman Sachs as reported by the NYSE, heightened focus on high frequency trading (HFT), outsized profits by the large and well-connected banks, along with unprecedented intervention by the FR in the markets only fuel the manipulation speculation.
From The Rumor Bag
Submitted by Tyler Durden on 08/03/2009 - 08:37Is AIG's office about to get raided? Anyone with a camera phone at or about Pine Street please be on your guard for a slew of trenchcoated gentlemen carrying boxes full of toxic CDOs.
