Archive - Feb 2009

Warren Buffett has officially turned the corner and while (temporarily) giving up on equities, he has gone full bore into debt.

Having received numerous emails asking for some more info about the highly convoluted relationships between Charter's various entities and inquiries as to why any rational company would have 10+ tiers of debt (ahem, Charter - rational?), Zero Hedge presents a rather simplified version of Charter's Org Chart. Hopefully this will make analyst lives a little less painful at several large funds (you know who you are).

The stampede of Citadel clients who have been eagerly waiting to pull their money (which, despite a 4.95% up January, is still worth roughly 50 cents on the dollar after last year's performance) will be let loose any day now. Bloomberg reports that in a letter to investors, Kenny Griffin has realized that it is beneath any self-styled master of the universe to keep cash locked up despite loud protests to the contrary.

Sirius XM just filed this press release stating that unless it manages to complete an exchange offer of its 10% Convertible Notes due 2009 for a like amount of Senior Secured Notesw due 2011, it will have to file for bankruptcy. The exchange of the $400 million issue has already been accepted by holders of $172.5 million, or less than half the total.

As the U.S. is preparing to issue trillions in Treasuries, with the latest twist being to add to the U.S.

Showing just how stupid the rushed deals to acquire pre-bankrupt companies are turning out to be (see BOA-Merrill Lynch), Lloyds dropped 30% in London trading after announcing it expects recently taken over lender HBOS to post a $14.5 billion loss.

“The impairments are, principally as a result of applying a more conservative provisioning methodology consistent with that used by Lloyds TSB,” the bank said in statement.

The planets must be in some millennial Friday 13th alignment, as it is finally the case that the high yield credit market is in agreement with rating agency default predictions. As we observed previously the price of the on-the-roll High Yield index (HY10) implies a specific curve of cumulative default probabilities.

The planets must be in some millennial Friday 13th alignment, as it is finally the case that the high yield credit market is in agreement with rating agency default predictions. As we observed previously the price of the on-the-roll High Yield index (HY10) implies a specific curve of cumulative default probabilities.

The pounding of Conti AG and Eastern Europe continues. Homebuilders join the fray as the entire sector closed much wider. In the positive category, Rio Tinto shorts get burned, as well as holders of CDS of perennial deathwatch candidate New York Times.

The pounding of Conti AG and Eastern Europe continues. Homebuilders join the fray as the entire sector closed much wider. In the positive category, Rio Tinto shorts get burned, as well as holders of CDS of perennial deathwatch candidate New York Times.

• Mortgage rescues fail as price drops spur increase in defaults (Bloomberg)
• Greenspan admits was mystified by subprime market until 2005 (NYT)
• Hypo to be nationalized after JC Flowers walks (Bloomberg)
• Will vulture investors be critical to recovery (

• Continental Flight 3407 crashes in Buffalo suburb with 48 passengers (WSJ)
• China's hyped recovery is a pipe dream (Naked Capitalism)
• Now, how does the government spend the money?
  

The boondoggle party is over... Or at least it is for Bank of Countrywide Lynch. The recent prolapse in populist hatred for TARP recipients means no more fancy conferences at the corners of the world where tequila shots are cheap, ignorant yokels still think banking is cool, and strip clubs are plenty.

The boondoggle party is over... Or at least it is for Bank of Countrywide Lynch. The recent prolapse in populist hatred for TARP recipients means no more fancy conferences at the corners of the world where tequila shots are cheap, ignorant yokels still think banking is cool, and strip clubs are plenty.

Another insane rally for all the wrong reasons. Mortgage subsidies are an effective debt reorganization, and confirmation of a lack of equity value. LACK, not ABUNDANCE.