Archive - Apr 13, 2009

Well, Mike Morgan sure has guts. Here's to hoping he also has good lawyers... Cause the 5th branch of government (the 4th being PIMCO) can now afford to spend another $5 billion of investor money to see this one to the bitter end... and then the taxpayer subsidies kick in.

Here's rooting for the underdog.

GoldmanSachs666 Complaint zerohedge

Looks like at least someone will not take the ongoing criminality of the sociopathic market any longer.

From from the WSJ:

A group of bondholders have ratcheted up the pressure on General Growth Properties Inc. by asking their trustee to sue the debt-laden mall owner for payment of their past-due bonds.

Spreads were tighter in the US today as all the indices improved (with Series 12 at contract tights and outperforming the off-the-runs). Indices generally outperformed intrinsics with skews widening in general as IG's skew decompressed as the index beat intrinsics, HVOL outperformed but widened the skew, ExHVOL outperformed pushing the skew wider, XO's skew increased as the index outperformed, and HY outperformed but narrowed the skew.

Curious which hedge funds got the margin calls of death today.

Citi Common-Preferred Arbitrage Above. The higher the CIX, the more vaseline portfolio managers will need to purchase from Duane Reade today.

Just hit headlines, not sure what the hell this means: they will equitize the loans?

Reading it so that the gov't will "agree" to get its uber-secured loan equitized, killing any negotiating power for all other unsecured bondholders.

Bondholders will be not be happy.

Time to bring out the equitable subordination lawyers boys.

By Linda Sandler, Rebecca Christie and Jeff Green

The daily volume on the SPY to this point is at 162 million shares, half the daily average of 333 million shares traded. The market continues to move on diminishingly marginal trades.

Chart compliments of www.creditresearch.com

I thought the financial cooperative had managed to sweep its troubles under the rug (at least temporarily) after NRUC announced its results last week with no major surprises... Maybe I was early... And this is despite the company's rushed attempt to complete the credit bid for ICC.

Ah, what the conflicted desks will not do to keep the market up ahead of the offerings. Rolling buy-ins are prevalent today as repos and stock loans get "reduced borrow" marching orders, forcing traders and clients to cover shorts.

The same "liquidity providers" that have been discussed previously in Zero Hedge, are also in dark pools to make sure trading costs are shifted from observable to less observable or not directly observable. Observable trading costs are the difference from VWAP, open price or arrival price + commission and spread costs. Less observable are bid/ask drift before a dark pool print.

As the GM and Chrysler bankruptcy is now a matter of weeks if not days (if one listens to CNBC "it is all priced in") I could not help but wonder just what the fallout of a bankruptcy would be on security holders in the structured realm. And any such consideration would have to take into account the potential fall out from the OEs but also within the entire supply chain (which few are talking about on prime time TV).

Could this be a harbinger of how massively underfunded corporate pension plans intend on tackling the seemingly insurmountable problem of upcoming pension obligations? In an 8-K released earlier, trucker YRC Worldwide has come up with a novel solution:

Source: LPC Loan Connector

The Capital Markets Liquidity Index subcomponents: