Archive - May 2009

Twilight zone^2. When Lear is the biggest upside mover, it is time to step back, take a deep breath, and roll your eyes.

Source: Loan Pricing Corp.

The squeeze in credit continues, however now with a twist. While tightening was a dominant theme as it has been in the past 10 weeks, average loans tightened by 31 bps (from a much tighter average absolute spread), more than than double the absolute spread tightening in bonds, which tightened by "only" 16 bps.

The squeeze in credit continues, however now with a twist. While tightening was a dominant theme as it has been in the past 10 weeks, average loans tightened by 31 bps (from a much tighter average absolute spread), more than than double the absolute spread tightening in bonds, which tightened by "only" 16 bps.

The squeeze in credit continues, however now with a twist. While tightening was a dominant theme as it has been in the past 10 weeks, average loans tightened by 31 bps (from a much tighter average absolute spread), more than than double the absolute spread tightening in bonds, which tightened by "only" 16 bps.

There's some excitement about all the companies that beat Q1 S&P earnings estimates (see first chart). However, once you consider how many beat revenue estimates, it's a less compelling picture. Companies are slashing expenses at a ferocious pace, which is an anorexic approach to profitability that cannot be sustained for long (same dynamic in places like France, where employment is falling at the fastest pace since 1970).

There's some excitement about all the companies that beat Q1 S&P earnings estimates (see first chart). However, once you consider how many beat revenue estimates, it's a less compelling picture. Companies are slashing expenses at a ferocious pace, which is an anorexic approach to profitability that cannot be sustained for long (same dynamic in places like France, where employment is falling at the fastest pace since 1970).

There's some excitement about all the companies that beat Q1 S&P earnings estimates (see first chart). However, once you consider how many beat revenue estimates, it's a less compelling picture. Companies are slashing expenses at a ferocious pace, which is an anorexic approach to profitability that cannot be sustained for long (same dynamic in places like France, where employment is falling at the fastest pace since 1970).

• Pimco says stupidly cheap mortgage bonds still attractive [bridge...

• Egan-Jones takes dim view of Morgan Stanley's health (Dealbook, hat tip Ubu)
• Faith based economics (John Mauldin via Ritholtz)
• So much for the Volkswagen- Porsche merger (Bloomberg) [next stop much wider CDS]
• Another former NY Pension overseers in Cuomo's probe (

For readers who have the time and interest to follow up on the topic Zero Hedge commenced yesterday discussing money liquidity and the shadow banking system, the best place to start is with Friedrich Hayek's seminal Prices and Production, published in the depression days of 1935.

Chrysler, as you all know, cut 789 of its dealers this Thursday past, roughly a quarter of all its stores nationwide. For me, the news is bitter sweet. Actually- I feel pretty good about it. But more on that a little later.

Chrysler, as you all know, cut 789 of its dealers this Thursday past, roughly a quarter of all its stores nationwide. For me, the news is bitter sweet. Actually- I feel pretty good about it. But more on that a little later.

Much speculation lately focuses not so much on what the stock market will do (the answer to that should be self-evident, especially once shorting stocks again becomes a practical reality), but what the impact of recent economic policies will be not just on inflation (regional or global), but also on that most sacrosanct piece of paper, the U.S. dollar.

Much speculation lately focuses not so much on what the stock market will do (the answer to that should be self-evident, especially once shorting stocks again becomes a practical reality), but what the impact of recent economic policies will be not just on inflation (regional or global), but also on that most sacrosanct piece of paper, the U.S. dollar.

Troubled RenTec, which not only made WSJ last night, but also CNBC today, may not have to suffer much longer. Based on information Zero Hedge has received, the assets at Jim Simons' investor-open, RIEF fund, have plummetted over the past 3 years. The fund which was started as one with up to $100 billion in potential capital, is a mere shadow of its once fabled self.

Below are the AUM for RIEF at various points in time. Continuing the trendline implies some very troubling lack of capital in the not too distant future.