Archive - Aug 2009

Credit significantly underperformed stocks this week as last week's capitulation in CDS markets did seem to be the turning point for this swing. HY underperformed IG considerably as single-names led the weakness but with spreads so much wider close-to-close, the S&P is almost unch, VIX is down, and Oil and Gold both fell with the dollar (unexpectedly) and we sense some weakness (following today's flatline in stocks midday) to come in equity markets.

First casualty: Dwelling House Savings and Loan Association, Pittsburgh, Pennsylvania, to be acquired by PNC. $13.4 million in assets and $13.8 million in deposits (did they have $0.4 million in contra assets somewhere?). FDIC PR here.

Second casualty (pro forma): Dwelling House Savings and Loan Association of Pittsburg, does not pass go: FDIC appointed receiver. "Dwelling House, which had total assets of $12.9 million, was in an
unsafe and unsound condition, was critically undercapitalized and had
no reasonable prospect of recovery." Oddly the "same" entity can have two different total assets at the same time OTS PR here.

Third casualty:  Colonial Bank, Montgomery, Alabama, with BB&T being the lucky winner. $25 billion in total assets, and $20 billion in total deposits. FDIC retains $3 billion of the total assets not purchased by BB&T ($23 Billion). The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $2.8 billion. The FDIC and BB&T entered into a loss-share transaction on approximately $15 billion of Colonial Bank's assets. FDIC PR here.

Fourth casualty: [leave space blank]

Richard LeFrak on the long, hard path before commercial real estate (and he should know). Also, in a stunning development Ivanka explains CMBS (which she undoubtedly learned from fiance Jared Kushner who knows all about CMBS and 666 Fifth Avenue)

"The OTS has decided to suspend consideration of the application while we examine certain issues." - William Ruberry, OTS Spokesman

The Treasury has provided a substantial FOIA disclosure packet to the good folks over at Judicial Watch. At this point we are awaiting a similar FOIA response from the Fed, which was requested by Zero Hedge previously and we expect to have it within 1 month.

Today. Mark it down. Another banner trading day for Goldman, who pocketed another $50 -$100 million shanking the tape today to knock off all the Mo-Mo Monkeys who bought yesterday's breakouts. Its going to be a good weekend at the Hamptons for the Prop Desk traders.

Bank of America stock up 2% at last check, while CDS is 5 bps wider. Someone please explain that one to us.

HFT 101

Ken Griffin's recent announcement that he is divesting a major portion of his E-Trade holdings presumably demonstrates a divergence of the paths of the two firms, while in fact Citadel is getting ever more intertwined with the online broker's operations, in fact giving the Chicago firm almost exclusive control over E-Trade's customer trade flow.

Or the purest definition thereof seen in a while. In the meantime dollar, bonds and equities seem to be dislocating.

"Sources close to the Carroll Foundation Charitable Trust board of trustees have confirmed that compelling criminal evidence Carroll Trust Dossiers have been submitted to Scotland Yard and the FBI surrounding the fraudulent incorporation of dummy Gerald Carroll Trust HSBC bank accounts and the resultant embezzlement of over $150,000,000, (one hundred and fifty million dollars) of Carroll Trust liquid funds located and held in offshore tax havens within the framework of an international criminal syndicate operation."

A lawsuit filed several months ago by R2 Investments puts activist investor Carl Icahn on the defensive for once.

We've opened up the Zero Hedge tips line and our (one-person) satellite offices in Zurich and London. Just in case you happen to come across something Zero Hedge worthy when your Blackberry is on the fritz.

Down-day volume dominating. How long before some exchange breaks again?

The hot and cold market lives on as prices ping pong from one extreme to another. Are investors being taken for another ride?