Archive - May 1, 2009
Citi Needs Up To $10 Billion In New Capital
Submitted by Tyler Durden on 05/01/2009 22:25 -0500WSJ out with a stunner, explaining the reasons behind the delay of the stress test releases until May 7th. And if Citi, which already has done some massive creeping equitization of its preferred stock is still in this much pain, one can only imagine what lies in store for Bank of America and even Wells Fargo.
May Day Friday Bank Failure Count Up
Submitted by Tyler Durden on 05/01/2009 20:36 -0500The first bank failure to hit the FDIC website (this is #30 for 2009) : Silverton Bank, National Association of Atlanta, Georgia.
Daily Credit Market Summary: May 1 - Derisking Is Back
Submitted by Tyler Durden on 05/01/2009 20:25 -0500Spreads were broadly wider in the US as all the indices deteriorated. Indices generally outperformed intrinsics (as we see high beta shorts selling index protection as hedges) 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's skew widened as it underperformed.
Third Derivative Auto DDT Crop Dusted Over Green Shoots
Submitted by Tyler Durden on 05/01/2009 20:00 -0500In yet more bad news for the second derivative crowd, today's announcement of a 9.3 million SAAR took the green shoot cheerleaders to the woodshed. Not only has this number firmly planted U.S. auto sales in the robust and $3.5 billion Chrysler DIP-worthy level of the late 1970's, but it has also proven that last month's SAAR of 9.9 million was as legitimate as the 2.2% consumer driven improvement to GDP.
Third Derivative Auto DDT Crop Dusted Over Green Shoots
Submitted by Tyler Durden on 05/01/2009 20:00 -0500In yet more bad news for the second derivative crowd, today's announcement of a 9.3 million SAAR took the green shoot cheerleaders to the woodshed. Not only has this number firmly planted U.S. auto sales in the robust and $3.5 billion Chrysler DIP-worthy level of the late 1970's, but it has also proven that last month's SAAR of 9.9 million was as legitimate as the 2.2% consumer driven improvement to GDP.
TALF v364.5, Now With Enhanced CMBS Dumping Provisions
Submitted by Tyler Durden on 05/01/2009 18:45 -0500Below we present the summarized term sheet of the most recent reincarnation of the TALF, compliments of the Federal Reserve.
Securitized Bonds: Created on or after 1/1/09
Underlying Loans: Created on or after 7/1/08
Collateral Type: AAA cusiped & cleared through DTC – required investment grade rating from minimum of 2 rating agencies
Goldman Sachs Principal Transactions Update: 1 Billion Shares
Submitted by Tyler Durden on 05/01/2009 16:13 -0500Update: It is, of course, Goldman's prerogative to provide their view on the matter. Below is a quote from Goldman Sachs spokesman Ed Canaday (hat tip Felix Salmon):
Goldman Sachs Principal Transactions Update: 1 Billion Shares
Submitted by Tyler Durden on 05/01/2009 16:13 -0500Update: It is, of course, Goldman's prerogative to provide their view on the matter. Below is a quote from Goldman Sachs spokesman Ed Canaday (hat tip Felix Salmon):
The Collapse Of European Risk
Submitted by Tyler Durden on 05/01/2009 15:35 -0500The biggest ongoing short squeeze may not be in equity markets, despite all efforts to the contrary, but rather in the risk of Eastern European countries as noted by their respective CDS levels. The chart below demonstrates the massive squeeze experienced by holders of CEE risk, which is quite entertaining considering the biggest risk powder keg by far is contained in this region. Indicatively, spreads have tightened by a massive 46% over the past 2 months which compares with Asia (39.1%), LatAm (21%) and EMEA (25.5%).
The Collapse Of European Risk
Submitted by Tyler Durden on 05/01/2009 15:35 -0500The biggest ongoing short squeeze may not be in equity markets, despite all efforts to the contrary, but rather in the risk of Eastern European countries as noted by their respective CDS levels. The chart below demonstrates the massive squeeze experienced by holders of CEE risk, which is quite entertaining considering the biggest risk powder keg by far is contained in this region. Indicatively, spreads have tightened by a massive 46% over the past 2 months which compares with Asia (39.1%), LatAm (21%) and EMEA (25.5%).
Cuomo Issues Subpoenas To More Than 100 Investment Firms
Submitted by Tyler Durden on 05/01/2009 14:14 -0500Update: Here is the official PR.
Bloomberg reports Attorney General Andrew M. Cuomo said his office has issued subpoenas to more than 100 investment firms and their agents in the investigation into possible corruption and kickback schemes involving the New York state and city pension funds.
Consumer sentiment up following March rally
Submitted by Tyler Durden on 05/01/2009 13:57 -0500Following the March rally, consumer sentiment is up significantly according to the latest Michigan survey. The latest numbers indicate sentiment is at a recession-busting 65.1, up from March's number of 57.3 and significantly ahead of consensus numbers at 61.5. Of course, the cynics among us will attribute it to a lagging indicator that is likely to add further fuel to the fire that is the March bear rally.
Shortage Of Short Paper
Submitted by Tyler Durden on 05/01/2009 13:21 -0500Here comes the thumping of the bond market. Barclays report by Joseph Abate out discussing the shortage of short paper, which could wreak havoc on T-Bills. As many readers know today a 300 bps fee is implemented for fails (incomplete delivery) which means many dealers will simply sit on paper, making shorting that much more difficult, and we could see negative T-Bill rates as soon as the next few days. All we need now is illiquidity in the bond market to follow the joke that equity liquidity has become to put a cherry on top of this utterly broken market.
Shortage Of Short Paper
Submitted by Tyler Durden on 05/01/2009 13:21 -0500Here comes the thumping of the bond market. Barclays report by Joseph Abate out discussing the shortage of short paper, which could wreak havoc on T-Bills. As many readers know today a 300 bps fee is implemented for fails (incomplete delivery) which means many dealers will simply sit on paper, making shorting that much more difficult, and we could see negative T-Bill rates as soon as the next few days. All we need now is illiquidity in the bond market to follow the joke that equity liquidity has become to put a cherry on top of this utterly broken market.
How To Steamroll Chrysler's Bondholders
Submitted by Tyler Durden on 05/01/2009 12:50 -0500A very good summary by Douglas Baird, professor at the University of Chicago law school, who analyzes the implications of the 363 sale and the (ab)use of 1129(a)(7) of the bankruptcy code on the Chrysler bankruptcy and why the first 5 days will likely be critical.


