Archive - Apr 2009

After a 25% rally in the past 40 days, is the market set to undo its 45% loss from the S&P500 all time highs? Many bulls are now claiming that now all is back to normal, and that despite the loss of the securitization product, the government will be happy to releverage consumers and companies to historic credit levels following the bail out mantra "take out debt now, spend tomorrow, save...

• Jonathan Weil: Obama stakes his fortunes on failed banksters (Bloomberg)
• Wells Fargo profit jumps on 4% mortgage refis (Bloomberg)
• All banks expected to pass "stress" tests (NYT)
• Trade deficit falls to lowest since 1999 on plunge in imports, initial jobless claims at 654
  

Or so the government says... even with minimal background knowledge, it's not too much of a reach to call BS.

• U.S.

Barney will not be happy about this... He will not be happy at all...

Although it is somewhat ironic that Berkshire owns Moody's.

Spreads were mixed in the US today with IG worse, HVOL improving (thanks to insurers), ExHVOL weaker, XO wider, and HY selling off. Indices typically underperformed single-names with skews mostly narrower (post Big Bang - index arbs back in play as skews saw their biggest single-day compression in series 12) as IG underperformed but narrowed the skew, HVOL underperformed but narrowed the skew, ExHVOL intrinsics beat and narrowed the skew, XO underperformed but compressed the skew, and HY's skew widened as it underperformed.

This one is looney tunes prime time material. Populist champion for the people, Barney Frank who earlier started war on mark-to-market and republicans, has added a new front to his offensive: Moody's rating agency.

The fine legal people of Chadbourne & Parke who we assume are Goldman Sachs' external counsel, have nothing better to do with their time than to pursue cease and desist orders against none other than the owner of GS critical websites www.goldmansachs666.com and www.goldmansachs13.com. Goldman's claim: "It has been brought to our attention that you are making unauthorized use of the mark GOLDMAN SACHS in connection with your domain names."

In an interview with Fox Business Network, Lewis plants his feet squarely in his mouth while wearing the pinkest of pink too-big-to-fail glasses, claiming again that he will not need any additional capital, putting his job on the line, and squarely contradicting Chris Kotowski and anyone else who can read financial statements and realize that another round of massive equity dilution at BofA is merely a matter of time, probably very short time at that.

As market does all it can to hug the flatline, credit is leaking, with IG12 at 192, 3 wider on the day and HY12 at 1377, 18 wider. Equities blissfully ignorant of everything but tick by tick momentum.

No fear: Geithner's plunge protection team is here.

In our ongoing coverage of the overhaul of US financial regulation regime, this article caught our eye; to summarize, Wall Streeters are apparently sick of the uncertainty of a typical Wall Street job and are seeking the stability of a government job. Specifically, 400 ex-analyst types have signed up for a job fair featuring 9 government agencies including the FDIC, the FBI and the SEC.

To go along with the Bailout For Dummies post, here is another way to visualize the capital allocated from/to financial companies during the current financial crisis. Interestingly, the chart created by Keefe, Bruyette & Woods concludes that the amount committed is $11 trillion, $2 trillion more than Zero Hedge's estimates.

To go along with the Bailout For Dummies post, here is another way to visualize the capital allocated from/to financial companies during the current financial crisis. Interestingly, the chart created by Keefe, Bruyette & Woods concludes that the amount committed is $11 trillion, $2 trillion more than Zero Hedge's estimates.

The U.S. Treasury will postpone the Stress test results until after Q1 bank earnings, according to Reuters, which is citing a source familiar. While the conspiracy theorists among us would not be surprised, this is a strange delay to say the least.

The source, speaking anonymously because the Treasury has not made a final decision on what to disclose, said officials do not want any test results released before the earnings season wraps up for most U.S. banks on April 24.