Archive - Aug 13, 2009

FHFA is patting it's self on the back again. They have been very busy in D.C. The question is are they doing the right thing?

Foreign holdings of US Securities decreased for the first time in 5 months by $299 million sequentially (weekly) to $2,809.9 billion from $2,810.2 billion in the prior month. Keep in mind in the same time period the Fed purchased over $16.6 billion of Treasuries, indicating that in the last week the Fed was the only purchaser of Treasuries. In a normal environment this would be a very troubling development.

Having moving into our new facility and having liberated or resurrected a number of pieces of audio hardware thought long lost, eventually we had to put the new digs through their paces. What better night than a Thursday for Studio Zero's first public beta?

The fun begins at 10:45pm ET and continues until the red bull runs out and the convenience store down the street is closed.

Update: http://cdo.zerohedge.com:8000/listen.pls

Chat up the DJ(s) and send us mp3 requests: AIM:  radiozh

"We see the summer pause as natural and as unemployment rises, there’ll be more foreclosures and lower prices. The depression is only pausing to catch its breath." - Bob Chapman

An impressively comprehensive and succinct explanation of the events that have gotten us here, and where we may be heading.

The man cited to be Ben Bernanke's replacement if and when the stock market (not the economy) takes a decided turn for the worse, Larry Summers, has been implicated in an act that may make his transitioning into his role of running monetary policy for the world's biggest economy slightly more complicated. A report that was issued several months ago by Asia Times' blog discloses that the man who has President Obama's attention on all matters financial was in fact selling the AAA-rated tranches of toxic CDOs held by his former employer, multi billion hedge fund D.E. Shaw after the collapse of the CDO-loaded Bear Stearns hedge fund.

In their weekly commentary piece, among many other things, Moody's discussed the downstream impacts of the ban of Flash, IOIs and other existing practices. They provide a different perspective in terms of a pros/cons analysis of the upcoming changes to both brokers-dealers and exchanges. Nothing earth shattering, but useful information to keep a sense of perspective in light of upcoming market structure developments, and who stands to lose the most.

Spreads were broadly wider in the US as all the indices deteriorated (with HY12 underperforming IG and closing above 800bps for the first time in over two weeks). Indices generally outperformed intrinsics with skews widening in general (as we continue to see single-names leading the market wider and index hedges seemingly dominant) as IG's skew decompressed as the index beat intrinsics, HVOL outperformed but widened the skew, ExHVOL outperformed but narrowed the skew, XO's skew increased as the index outperformed, and HY's skew widened as it underperformed.

The big brain from RBS chimes in with highly abbreviated yet quite insightful perspectives once again

Another successful auction brought you by FRB NY. This topic has been in the blogs for a week. Does this answer the question, "Is the Fed intervening in the bond market?"

Someone really hitting the brakes with the Bollinger Band ceiling today. (Yeah, we agree it's stupid voodoo. Don't shoot the messenger). That's what happens when algos run amock on no volume and nobody will pile in except on down moves. In a word - about as pathetic trading as it gets.

Wild moves intraday in stocks and currencies, as Skynet plays three card monty with all the robot programs used by their biggest clients and Joe Sixpack.

The recent ruling in the GGP bankruptcy case may open the door for a vast universe of structured CRE entities to funnel into bankruptcy court, making lives for holders of assorted CMBS securities rather interesting, especially after the recent unprecedented run up on hopes of governmental bail outs in perpetuity. After all there is only $3 trillion in max pain: a mere week's output for the printing presses at full throttle.

Consumer Price Index – July Time: 8:30 am Forecast: 0.0% overall, 0.2% core

Industrial Production & Capacity Utilization – July Time: 9:15 am Forecast: 0.1% industrial production, 68.1%

University of Michigan Consumer Confidence – August Preliminary Time: 10:00 am Forecast: 68.5

And provides a convenient location for those impaired by the NYSE to demand monetary compensation.