Archive - Jun 10, 2009

The below piece is a good analysis of a hypothetical Treasury/Dollar black swan event, courtesy of Eugenio Aleman from, surprisngly, Wells Fargo. Eugenio does the classic Taleb thought experiment: what happens if the unthinkable become not just thinkable, but reality. Agree or disagree, now that we have gotten to a point where 6 sigma events are a daily ocurrence, it might be prudent to consider all the alternatives.

Thinking the Unthinkable

Spreads were broadly wider in the US as all the indices deteriorated (albeit with a wide range day and spreads pushing significantly wider open-to-close).

213 co-sponsors now support HR 1207, with 7 new names added today alone. Just 5 more needed. The Fed really needs to get its lobbyist to start pulling their weight and do some serious damage control i.e. organize a few Dominoes dinners, throw in some buffalo wings, a little Mumms, some Goldman elves, you know the drill. They can charge the Goldman expense account.

Looks like not even Lloyd can take on mighty Jamie and his ravenous ETF hoovermatic: today migrating from boring old SPY to the uber-insane IWM. Just a reminder for Jamie's unmovable bastion of ETF fortitude: here is Lloyd's message - loud, clear and in 360x280 pixels. Bid the market against "the machine" at your own peril.

Everyone's favorite populist Robin Hood (in tights) for the common (Wall Street) man, chimes in on Geithner's latest initiative to allow much more governmental (SEC) intervention in pay determination. Also amusing is how Frank throws Geithner under the bus. There seems to be a pretty concerted political push against TTT now: the Summers camp must not be happy. Regardless, Frank is boldly spearheading an initiative for full socialization of exec comp - 5 year plenary sessions to be introduced to discuss the effectiveness of these shortly.

The latest monthly report out of Hedgebay indicates that if you were in the market for a hedge fund and couldn't buy one for 80 cents on the dollar in March, you are fresh out of luck - time to pay up for that invaluable Ken Griffen LP interest at a cool 10%+ premium to the low price.

The latest monthly report out of Hedgebay indicates that if you were in the market for a hedge fund and couldn't buy one for 80 cents on the dollar in March, you are fresh out of luck - time to pay up for that invaluable Ken Griffen LP interest at a cool 10%+ premium to the low price.

CDS and option traders love to hate and hate to love the Depository Trust & Clearing Corporation (DTCC). But few aside from those who trade derivatives over-the-counter care about the DTCC. Here is a reason why you should: "Last year DTCC settled $1.88 quadrillion in securities transactions across multiple asset classes. We essentially turnover the equivalent of the U.S. GDP every three days."

The market is attempting to commence a high-beta led sell off: IWM underperforming SPY by large margin.

It is according to Rosie's summary points from this morning. (Highlights mine).

Bond Market Selloff and Stock Market Meltup Look Overdone

All the more reason for readers to support the Fed Transparency Petition. Must Watch. (link here)

Some key soundbites:

"If the Fed examiners were set upon the Fed's own documents—unlabeled documents—to pass judgment on the Fed's capacity to survive the difficulties it faces in credit, it would shut this institution down."

In a fitting redux of the Japan real-estate invasion (which Colin Powell had some hilarious comments on at last year's JPM High Yield megaconference in South Beach), South Korean firms Youngwoo & Associates and Kumho Investment Bank have acquired the AIG headquarters at 70 Pine St and 72 Wall St, for a total price in the neighborhood of $100 million, a third of what these could have sold for two years ago. AIG itself will continue occupying the 1.4 million sq.

Yesterday Congressmen Dan Maffei (NY-25) and Congressman Frank Kratovil (MD-1) introduced Bill HR 2743 called the "Automobile Dealer Economic Rights Restoration Act of 2009", which aims at "requiring Chrysler and General Motors to continue to honor their commitments to auto deal

• 10 financial institutions were granted permission to repay $68B in government-bailout cash.
• Financial institutions escaping TARP face $5 billion warrant repayment.
• Dollar gains on yen as risk appetite improves.
• French industrial output drops.
• Japan machinery orders weak, recovery seen slow.
• Obama admin drops plan to cap salaries at firms receiving bailout money.
• Obama administration ready to tighten reins on Wall Street pay, bonuses.
• Oil soars above $71 as 3-month rally continues, reaching 2009 high.
• World stock markets ri
  

• Russia to swap Treasuries into IMF debt (Bloomberg)
• Citigroup exchange offer at the beginning of the end, just a few more months of 120% borrow rates (Bloomberg and