Archive - Mar 2009

The struggling newspaper itself reports that the last attempt to extract value from its rapidly devaluaing assets has succeeded and W.P. Carey (as had been expected) has agreed to a $225 million 15 year (10 year early termination option) sale leaseback. Under the terms of the deal, NYT will pay Carey $24 million a year, or an annual rate of 10.7%.

• Pharma acquisitions pick up pace: Merck buying Schering-Plough (NYT)
• The Google killer: Wolfram Alpha is coming (Twine)
• Credit markets seizing up again as LIBOR climbs...
  

Every now and then we go through the list of IG11 companies looking for something that just looks out of place. This time around our attention was caught by a financial company, whose CDS was trading at a level which we initially thought had to be a mistake.

Every now and then we go through the list of IG11 companies looking for something that just looks out of place. This time around our attention was caught by a financial company, whose CDS was trading at a level which we initially thought had to be a mistake.

Lloyds Banking Group gives 75% stake to government, insures assets (Bloomberg)

More FHA-backed mortgages go bad without a single payment (Washington Post)

Lloyds Banking Group gives 75% stake to government, insures assets (Bloomberg)

More FHA-backed mortgages go bad without a single payment (Washington Post)

When the hotdog vendor you buy lunch from talks about the impending nationalization of Citigroup, it is fair to say that nationalization risk is "priced in" Citi's (and all other financials') securities.

When the hotdog vendor you buy lunch from talks about the impending nationalization of Citigroup, it is fair to say that nationalization risk is "priced in" Citi's (and all other financials') securities.

The problem of public pension underfunding is rapidly becoming the next major administrative nightmare as the over $1 trillion underfunding will at some point have to receive appropriate funding treatment.

The problem of public pension underfunding is rapidly becoming the next major administrative nightmare as the over $1 trillion underfunding will at some point have to receive appropriate funding treatment.

The latest report from Prudential, courtesy of For What It's Worth, shows an eyepopping increase in the inventory of $6 million+ houses for sale in Greenwich, CT, growing at 164% in 2009 compared to 2008. While the total inventory increased by a manageable 22%, the heavy weighing toward the rich end of the spectrum is troubling.

The latest report from Prudential, courtesy of For What It's Worth, shows an eyepopping increase in the inventory of $6 million+ houses for sale in Greenwich, CT, growing at 164% in 2009 compared to 2008. While the total inventory increased by a manageable 22%, the heavy weighing toward the rich end of the spectrum is troubling.

As expected, the SEC promptly granted an exemption for the ICE to begin guaranteeing CDS. ICE competitor CME Group has not received an SEC exemption and it is not clear how long it would take for the SEC to make a decision on the competitive platform.

Either way, the ICE has said it will begin backing trades in the market as soon as Monday of next week. Farewell basis trade (unless our readers feel otherwise, in which case we welcome their thoughts).

The recent run up in oil prices has resulted in some dramatic shifts along the crude curve. When we first discussed the contango effect (and some amusing risk free ideas as a result), the 12 month spread was roughly $25.