Archive - Jun 1, 2009

Courtesy of mint.

Courtesy of mint.

Courtesy of mint.

In one of the lesser noticed scandals over the past week, the CEO of the American Banker Association Ed Yingling (presumably not related to the fine, fine beer) accused GMAC essentially of using TARP money to fund its subsidiary Ally Bank in order to advertise/provide markedly higher deposit interest rates than prevalent market rates. The last is in violation of a May 29 decree by the FDIC, barring weaker banks from paying interest rates out of line with local markets to keep lenders from taking on excessive risk.

Nothing new here for those who follow David, but some typical soundbites. "Rally can continue based on technicals. In late summer/early fall we will rollover" etc.

And of course the intellectual titans at CNBC close it off with a stunner of a question as the ominous "here comes the commercial break" music hits 145 dB. Has to be seen to be believed.

Moody's out with a piece, in which it joins the S&P chorus (well, not technically a chorus if just one is singing) Zero Hedge wrote about earlier, in which it seems the two major rating agencies are now taking both REITs and associated securitization conduits to the woodshed, and making it inevitable that Geithner adjusts the requirements for CMBS TALF participation. For once being a 1-10 year lagging indicator may actually be a market normalizing influence.

Moody's out with a piece, in which it joins the S&P chorus (well, not technically a chorus if just one is singing) Zero Hedge wrote about earlier, in which it seems the two major rating agencies are now taking both REITs and associated securitization conduits to the woodshed, and making it inevitable that Geithner adjusts the requirements for CMBS TALF participation. For once being a 1-10 year lagging indicator may actually be a market normalizing influence.

All you ever need to know about the prestory, the propaganda, a couple of facts, and the likely outcome of the Government Motors bankruptcy case, wrapped in a tidy little package, compliments of Weil Gotshal, who, between Lehman and GM, are now the de facto too big to fail law firm.

Not quite a repeat of Friday, but close enough for government work (pardon the pun).

Not quite a repeat of Friday, but close enough for government work (pardon the pun).

Must read white paper out of the IMF, discussing the burgeoning balance sheet of the Federal Reserve, which as Zero Hedge pointed out, is really the only relevant one nowadays.

Spreads were tighter in the US as index spreads were tighter across the board as IG12 and HY12 made new contract tights (even as IG11 underperformed). Indices typically underperformed single-names with skews mostly narrower as IG underperformed but narrowed the skew (with IG skew now at its tightest), HVOL underperformed but narrowed the skew, ExHVOL outperformed pushing the skew wider, XO underperformed but compressed the skew, and HY outperformed (breaking below 1000bps) but n

Jonathan Litt, formerly a top rated REIT analyst with Paine Webber and Solly, has some words of caution for all investors who can't wait to part with their cash and invest in ghost town malls, foreclosing multi-apartment buildings, unretnable offices with a 0.5x DSCR and 10%-full Vegas hotels. Ironically, this comes from a CNBC interview.

Anyone else getting nervous that treasuries are becoming more volatile than stocks (even though VIX is higher on the day despite the 80/30/0 degree equity rally)?

Udpate: for about 2 seconds we were in historical record territory at 277.717 bps.

Ran across this article posted in Jumping In Pools. Not sure how credible it is, but allegedly Barack Obama will provide the blueprints for the B-2 stealth bomber to China in exchange for $50 billion in debt relief. According to author Richard Hogarty: