Archive - Mar 2009

Today was one of only four times in history for the Swiss National Bank to intervene alone, that last time being in the mid-1990’s.

The fourth leg of the trifecta squeeze just came out (to everyone's total lack of surprise): Citi chairman Dick Parsons said "Citigroup does not need any more capital injections from the government and that the bank would remain in private hands." Demonstrating a keen sense of humor, in an interview with Reuters Dick had this to say:

I am not quite sure why TrimTabs' week ends on a Wednesday but lately few things surprise me. Regardless, the latest cash tracking data out of the company indicates that $8.8 billion was redeemed out of all equity mutual funds versus a revised outflow of $19.7 billion in the prior week, which by simple addition means that over $28 billion was redeemed in the past two weeks. The only inflow in the week occurred into US equity ETFs, while all other categories saw cash departures.

Following in the footsteps of GE's downgrade earlier, the AAA rated financials are now extinct.

The Fitch downgrade is presented in its entirety, however one important thing to note is Fitch's disclosure that it had evaluated non-public information regarding BRK's derivatives exposure. Being the first to downgrade the company upon seeing this disclosure likely portends nothing too good from the other rating agencies which are behind the curve.

Or such is the title of the letter just sent out by the House Committee on Financial Services in which the Democrat-GOP squabbles take on a new and heated flair, compliments of Barney. Seems the purpose for the letter is borne out of criticisms of Frank that he personally did not pass any legislation to regulate Fannie and Freddie until 2007, his claims in 2003 that FNM and FRE were not in crisis, and his lack of attempts to restrict subprime lending between 1994 and 2007.

There is likely no better example of just how totally worthless subprime "assets" are in the current market than the ongoing liquidation of Carrington Investment Partners. The Greenwich hedge fund, which shut down in late 2007 with about $1 billion in assets, had initially locked up its investors for a year while it was proceeding with an orderly liquidation. Well, the liquidation resulted in zero sales, a 10% decline in AUM on top of the destruction in 2007 and another year of freezes.

Following the departure of Misha Malyshev, Citadel has lost yet another trader, this time a member of its tactical-trading group. Jace Kohlmeier, presumably a computer science grad out of Princeton, has decided he is not waiting around to see if Citadel can hit its high water mark at some point this century and left for greener pastures.

As Zero Hedge wrote, GGP may be forced to file for bankruptcy next Tuesday unless its proposed consent solicitation passes, which is contingent on the acceptance of 90% of its 2009 bondholders and 75% of the holders of 2012-13 notes. However, the blocking power on the deal lies with any combination of just three bondholders, as the deal changes material maturity and coupon terms.

Well, we did throw them in the TBTF category yesterday, and this could be the first step. Moody's just out with an outlook revision to negative on its current senior unsecured rating (Baa2).

First Vikram, then Dimon repeated what he had said earlier, now Lewis adding to the short squeeze which has resulted in a 14% bear market rally over the past 4 days. Kenny whose legal troubles with Cuomo are escalating, also expects BofA to be profitable in 2009 and will not need any more federal aid.

Despite the market's earlier memo that its profit for Jan and Feb is up, Moody's is doing all it can to spoil the party: the rating agency just dropped a bank rating action neutron bomb. Moody's action is based on the expectation for higher credit losses than previously anticipated and banks ratings most likely to be affected are those with significant commercial real estate exposure, specifically construction and land development.

Bloomberg does a good analysis of the culture shock associated for Bernie in moving from his penthouse to his temporary confinement at the Metropolitan Correctional Center in lower Manhattan, which is characterize

Marking the end of an era (and another blow to SHLD), the legendary Sears Tower will soon shed its name and will be renamed the Willis Tower. Willis Group has decided to relocate the bulk of its operations to 233 S. Wacker Drive and will initially occupy 140,000 sq. feet in the tallest building of the Wesatern hemisphere.

Marking the end of an era (and another blow to SHLD), the legendary Sears Tower will soon shed its name and will be renamed the Willis Tower. Willis Group has decided to relocate the bulk of its operations to 233 S. Wacker Drive and will initially occupy 140,000 sq. feet in the tallest building of the Wesatern hemisphere.

Optimistic visions from the Pequot man.