Archive - May 2009

• Fed's bank results reassuring [and a joke at the same time], show no insolvency (Bloomberg)
• GM posts $6 billion loss as bankruptcy looms (FT)
• SPG boosts size of follow on offering to $1 billion (Bloomberg) [only about $30 billion more to be raised by MeREIT Lynch before the rally is over]
• Trichet says EC
  

Daily "market" summary presented in easy to digest format.

Daily "market" summary presented in easy to digest format.

An interesting piece in WSJ; Cisco expects tech sales to stabilize/bottom out and given it's early reporting status, it's usually seen as a barometer for tech spending. ZH finds this interesting for a few reasons; one, tech spending tends to lag many other indicators but in this case it seems to be leading. It's particularly important to note that this is a first derivative indicator, not the second derivative BS that the market has been lapping up the past few months. 

With FIAT on the brink of taking over every desperate, cash-strapped, sales-ridden car company on the northern hemisphere- I thought it a fun idea to run-through an “Italian Job” list, the “Italian Combo”- of cars, if there ever was such a thing. The result of one part Italian- the other part- well, something else…

As had been widely expected, today (a day before the stress test results finally stop leaking, compliments of the securities and exchange commission) the senate passed a measure approving the expansion of the credit line from the Treasury to the FDIC to $100 billion, from $30 billion previously. The vote passed 91 to 5. In addition, the FDIC will now have half a trillion credit limit that will expire by the end of 2010.

As had been widely expected, today (a day before the stress test results finally stop leaking, compliments of the securities and exchange commission) the senate passed a measure approving the expansion of the credit line from the Treasury to the FDIC to $100 billion, from $30 billion previously. The vote passed 91 to 5. In addition, the FDIC will now have half a trillion credit limit that will expire by the end of 2010.

A good and comprehensive analysis on the state of the capital markets with an emphasis on Private Equity, appropriately compliments of the people who have extensive experience with gambling and casinos, Colony Capital.

A report out of Reuters will be the final nail in all those shareholders who got caught with their pants down when Porsche announced its intention to "dominate" Volkswagen, which caused a insane squeeze when it became obvious there were not enough shares in the float to cover all the shorts.

Spreads were tighter in the US as all the indices improved (as adjusted IG levels moved back to six-month tights). Indices typically underperformed single-names with skews mostly narrower as IG underperformed but narrowed the skew, HVOL underperformed but narrowed the skew (massive skew compression continues here), ExHVOL outperformed pushing the skew wider, XO underperformed but compressed the skew, and HY's skew widened as it underperformed.

In complete denial of everything the government leaked earlier, Morgan Stanley is now expected to need $1.5 billion in new capital.

I am happy to send my $10 by regular airmail or via carrier pigeon straight to PDT.

May 6 (Bloomberg) -- Banks that need to raise capital under the government’s stress tests will have until June 8 to develop a plan and until Nov. 9 to implement it, U.S. bank regulators said today.

TrimTabs Investment Research estimated today that the U.S. economy shed 745,000 jobs in April (20,000 more than their March job loss estimates) as wages and salaries plunged an adjusted 5.7% year-over-year. TrimTabs estimated that the economy shed a record 5 million jobs in the past 12 months.

"If job losses continue at the present rate, the unemployment rate could top 10% by summer," said TrimTabs CEO Charles Biderman.

The treasonous, patriotic Non-TARP holdouts, who own $295 MM of first lien paper, include essentially 5 separate, relatively small funds:

Schultze Asset Management
Schultze Apex Fund
Arrow Distressed Securities Fund
Stairway Capital Management
Group G Partners
GGCP Sequoia
Oppenheimer Senior Floating Rate Fund
Oppenheimer Master Loan Fund
Foxhill Opportunity Master Fund

The illegal leaks (hey SEC, just which secret regulation is the Fed and other agencies following when they keep leaking stress test results every five minutes to the MSM, it sure ain't Reg FD) are squeezing (no pun intended) more tears of pain from the unlucky few who have still not unwound the Citi common-preferred trade.

One last observation from Goldman's 10-Q: on page 126 the bank announced that a major portion of the charges taken in the orphan December month was associated with the $850 writedown of its securities in LyondellBasell Finance Company.