The CNBC Business Model
Submitted by Tyler Durden on 07/16/2009 - 08:54Whit the recent elimination of anything even remotely approaching journalistic rigor or analysis, and its substitution with endless propaganda and the pitching of "hope" as an investment conduit, many have been scratching their heads over the question of just how it is that CNBC is still on the air, let alone make money: after all selling hope is a very expensive process.
I provide the answer.
Nortel Workers Threaten To Blow Up Factory Unless They Get Decent Layoffs
Submitted by Tyler Durden on 07/16/2009 - 08:20
Liquidating Nortel has more troubles to add to its plate. Not only is the Canadian firm seeing a major push back to its liquidation plans by recently notorious private equity firm MatlinPatterson, which refuses to go gently into that good night and write off its $400 million investment in the failed telecom maker, but now it has to deal with its own employees who have threatened to blow up a French plant unless they get preferential layoff terms. The Globe and Mail reports that "workers had placed gas cylinders in front of the plant in the Yvelines
area near Paris, where 480 jobs are set to be axed following bankruptcy
proceedings."
Simmons Fails To Make Coupon Payment
Submitted by Tyler Durden on 07/16/2009 - 08:04Troubled mattress maker Simmons announced that it did not make it scheduled July 15th bond payment of $7.9 million. The company's bondholders who are hoping for some hail mary bailout as millions of unemployed people upgrade from a hard floor to a memory foam king size are due for a big surprise, even with the extended forbearance they have granted the company. One can hope that the "certain conditions" to be met by July 31 include a clause of 100% equity conversion as that is the only return hopeful investors may hope to extract from the company.
Daily Highlights: 7.16.09
Submitted by Tyler Durden on 07/16/2009 - 07:25Janet Tavakoli On The Causes Of The Global Financial Meltdown
Submitted by Tyler Durden on 07/16/2009 - 07:14Highly informative C-Span interview with Janet Tavakoli to go with the morning coffee.
RealtyTrac: Q2 Foreclosure Activity Highest On Record
Submitted by Tyler Durden on 07/16/2009 - 06:58
Look elsewhere for green shoots... and CNBC's favorite commodity - hope.
1.9 Million foreclosure filings in the first half, 889,829 in the second quarter, with 336,173 in June alone, bringing the second quarter total to the highest number since RealtyTrac has been following these data. And this all is happening while various foreclosure moratoria and other national and state mitigation efforts are still in play. One can just imagine the bottom really falling out of the market once California and others stop pretending they can control this accelerating train wreck.
Frontrunning: July 16
Submitted by Tyler Durden on 07/16/2009 - 06:18Why Does Goldman Need A Fed Exemption For VaR Calculations?
Submitted by Tyler Durden on 07/15/2009 - 19:26Lately the topic of Goldman's VaR has taken on significant prominence, not least because as Zero Hedge disclosed yesterday, it hit a record high. The implications for this were large enough that even Bloomberg picked up on this story. Many readers raised questions of how is it even remotely possible for the company to have a VaR in the low-mid $200 MM ballpark, yet to post a record number of $100MM+ trading days in Q1; Zero Hedge is willing to wager that the upcoming 10-Q release will demonstrate another record number of $100MM+ days in the just closed quarter as well. How is that possible?
Introduction To High Frequency Finance
Submitted by Tyler Durden on 07/15/2009 - 18:14In the absence of anything else being even remotely relevant in today's market, here is some good bedside reading on this increasingly more pertinent topic.
Game Over CIT
Submitted by Tyler Durden on 07/15/2009 - 17:25CIT Group Inc. says it sees ‘no appreciable likelihood’ of U.S. government support in the near- term. Talks with the government over aid have ceased, the company said in a Business Wire statement.
Sprott On Problems And... Problems
Submitted by Tyler Durden on 07/15/2009 - 16:24"The Federal Reserve’s policy of Quantitative Easing is failing. The US budget is ludicrous, spending is out of control, spending promises are out of control, the world knows it - and we know it. For all the pundits who see the economy improving over the next year, we invite you to explain to us how this debt crisis will resolve itself without significant turmoil. We’ve tabulated the numbers above - and they do not lie. As we wrote this past January, welcome to 2009."
Joe Saluzzi Provides Further Color On Program Trading
Submitted by Tyler Durden on 07/15/2009 - 16:02Some more insight from Themis Trading's Joe Saluzzi from a video clip with BNN earlier today. Also follows up on his earlier post about program trading in the context of AIG. The part about algorithms looking for bonuses and Lexuses is amusing but morbidly troubling.
Asset Diversification Theory Fail
Submitted by Tyler Durden on 07/15/2009 - 15:38
For people who have forgotten what asset diversification looks like, do not look at this chart to be reminded. All asset classes over the past three days have ploughed higher, contrary to any possible logical argument. But such is our market.Cash out of bonds into everything else... inverse... rinse... repeat. One wonders just how much excess liquidity is trapped in the market.
Daily Credit Summary: July 15 - VIX Vacillation
Submitted by Tyler Durden on 07/15/2009 - 15:31Spreads were tighter in the US as all the indices improved (with HY outperforming IG even as IG saw its best close-to-close and open-to-close performance in over six weeks). Indices generally outperformed intrinsics with skews mostly narrower as IG's skew decompressed as the index beat intrinsics, HVOL underperformed but narrowed the skew, ExHVOL outperformed pushing the skew wider, XO underperformed but compressed the skew, and HY outperformed but narrowed the skew.
