Archive - Mar 16, 2009

The company which recently lost bragging rights (at least in name) to the tallest tower in the west hemisphere, is working hard not to also lose access to precious liquidity. Sears Holdings is currently in the market to extend the March 2010 maturity of its $4 billion ABL through Bank of America and Wells Fargo. Eddie Lampert's brand name is expected to allow for not too much of a hair raising spread, as the new loan is rumored to be pricing around Libor + 400 with a Libor floor.

Manufacturing downturn continues apace

Broad-based declines in output; new lows in utilization

Industrial production fell 1.4% M/M in February for a result below consensus forecasts. Auto output partially rebounded 10.2% M/M as some factories came back on-line after extended shutdowns in January. This added 0.5 ppts to overall manufacturing production over the month, which still managed to fall 0.7% M/M with declines across a broad array of industries.

More news on Six Flags, some good some not so good... First, I reprint what Six Flags PR department would like ZH's readers to know, so we present that with no comment:

Dear Tyler,

I hope this email finds you doing well this afternoon, here is another update for you.

More news on Six Flags, some good some not so good... First, I reprint what Six Flags PR department would like ZH's readers to know, so we present that with no comment:

Dear Tyler,

I hope this email finds you doing well this afternoon, here is another update for you.

Communist States Of America Taxpayer Capital LLC expanding. Next it will hire Boaz Weinstein to play the sovereign basis trade. Also: Bernie Madoff's resume has been passed around as primary candidate for running Social Security.

Good news for PIMCO. The Fed purchased 4.468bb out of 6.875bb submitted, which was by far the largest amount purchased in this sector program-to-date. Previously the Fed had purchase programs from the 4yr to 10yr agencies, but given last week's purchase in the 30yr sector, the Fed Purchase programs are now divided differently (~ 3/10 to 3/11, ~3/11 to 3/13, ~3/13 to 7/15, ~7/15 to 7/32). Prior to last week, the Fed would purchase the ~3/13 to 6/18 sector.

Bloomberg reports William Ackman may finally get something in exchange for the nearly $2 billion he has blown on PSIV, aka the Target Fund. Ackman will propose himself as well as a Richard Vague, Jim Donald, Michael Ashner and Ronald Gilson to Target's Board of Directors.

Anyone hearing anything? Presumably this is not in response to a lynch mob.

First rumor of the day: AIG physical shares are soft, extra absorbent and two ply.

Second rumor: as ZH speculated previously, gov't is recalling financial shares from repo window causing massive squeeze... Disclosure: ZH is long Citi stock just for this event.

A gripping analysis done by the good folks at stateline.org demonstrates just how much more pain is in store for state and local pension funds.

A gripping analysis done by the good folks at stateline.org demonstrates just how much more pain is in store for state and local pension funds.

The musical chairs on the Cititanic getting a slight rearrangement. The 4 new directors are:

Jerry A. Grundhofer

Continued strength from secured debt of junk mail distributor Valassis, while Neiman Marcus just can't catch a bid second week running.

Today smallish E&P Energy Partners Limited (EPL), in a pretty horrendous development for bondholders, announced that it had received notification from its bank administrative agent that its borrowing base was being reduced from $150 million to $45 million.

Ken Griffen's Citadel received $200 million of AIG taxpayer bailout money (FIN Alternatives)
G-20 prefers talk over action on toxic assets (Bloomberg)
An old ZH favorite: pension bills to surge nationwide (WSJ)

Trading commenced last week with the S&P 500 registering a new 12 ½ year closing low on Monday. That low was followed by four consecutive positive sessions that comprised an 11.8% gain. The upside momentum was fueled by an assortment of better than expected (although weak) economic data, bank CEOs emerging from hiding to talk up their operating businesses and finally, government jawboning regarding relief for issues on which vanilla investors place high value.