Archive - Jun 2009

First time in over a month where 1-2pm intraday low volume breakout has been rejected by the market.

The high/low beta pair trade is not working out too well either: IWM underperforming SPY substantially. Hey Credit Suisse, how is that $20 bn+ ETF basis trade working out for you today?

When REIT consultant Green Street Advisors talks, even the book pumpers listen. Bloomberg reports that Chairman and Director Of Research Mike Kirby, during his keynote address at the UCLA Economic and Real Estate Forecast Conference has noted that not only are CRE property prices down 35-40% already, but in fact have more room to drop.

After providing several hundred billion in second liens and other subordinated tranches to some of the worst companies in existence over the past 5 years, a result of a complete lack of investing discipline which nearly brought parent General Electic down, GE Capital Corp. is back in the game, and this time it plans to win it.

The latest research brief from Innovative Quant Solutions, touching on the very relevant topic of whether the VIX has any predictive power left at all, and just how gamed of an indicator has it lately become.

The Federal Reserve of New York is apparently just now realizing that Commercial Real Estate collateral is more than just wishful thinking. In a press release issued earlier, the NY Fed announced that it had picked TREPP to serve as a collateral monitor for the CRE Hail Mary pass better known as TALF.

Just like yesterday, the SPY is bouncing off the June low (white line) technical resistance level. Directive #2 - protect the white line.

Just like yesterday, the SPY is bouncing off the June low (white line) technical resistance level. Directive #2 - protect the white line.

With the state a self-disclosed 50 days away from complete financial ruin, it was a matter of time before the "forward" looking rating agencies decided to take some action. Not surprisingly, it was S&P which has decided to splinter itself from the other sycophants, especially in the TALF quad-A re-rating of uber-toxic CRE.

From the negative watch report issued yesterday:

With the state a self-disclosed 50 days away from complete financial ruin, it was a matter of time before the "forward" looking rating agencies decided to take some action. Not surprisingly, it was S&P which has decided to splinter itself from the other sycophants, especially in the TALF quad-A re-rating of uber-toxic CRE.

From the negative watch report issued yesterday:

PM: Today's directive - every chart higher.
Trader: But sir... the VIX can't...
PM: I said - higher.
Trader: But if we push the VIX higher it will break out of channel...
PM: Shhh, the universe is talking to us right now. You just gotta listen...
Trader: Uhhh, yes sir.

***

PM: Oh, and make it on no volume. Playaahh.

We hope mortgage traders brought their dramamine today. All is smooth and gentle in the 10 yr UST - 30 Yr Mortgage spread market.

MS analysts, fully blown out of the water with their prior prediction of a market top at 850, have decided to step into the bailout-infested Oracular waters yet again, this time saying that 950 is the absolute, positive top. How does the house of Mack come up with its conclusion? Simple - by cranking up 2009 S&P earnings by a whopping 20% from 40 to 51, and claiming the earnings trough will occur in Q3 2009.

If there is one post you read today, this month, or this year, this should be it. Absolutely brilliant summary of the predicament interventionism has gotten us into. If you are looking for insight that will save you money when the market turns, this is it.

hat tip Brian.

• Asian markets fall as pessimism about global economy spreads.
• BOJ’s Shirakawa says that corporate financing has improved but the bank must monitor market developments before to extend measures to ease credit strains.
• Geithner: Risks of deeper recession in US are 'dramatically' lower.
• New-car registrations in Europe dipped to 1.27 million vehicles in May.
• Nikkei 225 Stock Average tumbles 2.9% Tuesday, its biggest one-day loss since March 30.
• Obama's financial overhaul could reshape Fed; some worry about `supercop' role.
• Russia may put part
  

• TALF for Commercial Real Estate a disaster: no issuer announcements ahead of today's deadline (Bloomberg)