Archive - Sep 22, 2009
Simon Hobbes Destroys GE's Fast Money Puppets
Submitted by Tyler Durden on 09/22/2009 21:38 -0500This has to be seen to be believed. Why is it that all the former CNBC pundits end up becoming sensible and rational people: first, and ironically, ex-Fast Money Ratigan, and now Simon. What IS it about the borg brainwashing collective at that TV station? Back to the clip and Hobbes, who on CNBC says: "This is an overbought, inflated market, that could come down quite rapidly", yet pan back to Teranova, who says "Hey Simon now that you are back in the US you have to be a bit of a cheerleader" which is all anyone needs to hear.
Have We Come Full Circle? Lone Star To Sell $239 Million In Subprime Debt
Submitted by Tyler Durden on 09/22/2009 21:26 -0500The company which for nearly two decades has been the ultimate vulture investor, Dallas-based Lone Star Funds, is in the process of finding yield starved novice asset managers, or in other words, buyers for $239 million of subprime backed securities. According to Bloomberg, the portfolio represents holdings which the company acquired at or about the time it acquired CIT's mortgage business for $1.5 billion, which also gifted the distressed fund $4.4 billion worth of CIT debt.
Rating Public Pension Funds?
Submitted by Leo Kolivakis on 09/22/2009 18:57 -0500It's not just rating agencies that are at the crossroads, but pension funds are at the crossroads too. We need a governance overhaul that introduces more transparency and a compensation system that rewards risk-adjusted returns. The status quo at rating agencies and pension funds is totally unacceptable.
Congressman Upton Demands Declassification Of Censured Cap-And-Trade Cost Estimates
Submitted by Tyler Durden on 09/22/2009 18:01 -0500In response to a FOIA request, Administration officials deliberately censored figures that specify the annual costs cap-and-tax will impose. The Treasury documents appear to confirm what Upton has been saying all along, that cap-and-trade is a national energy tax that will devastate American families. I am particularly interested in the one-page document entitled Domestic Climate Policy that was prepared by Judson Jaffe. The Jaffe document omits important figures, most glaringly, on the annual costs under a cap-and-trade regime, stating, “It will raise energy prices and impose annual costs on the order of XXXXXXXX dollars.” - Congressman Fred Upton
Dumb And Dumber
Submitted by Tyler Durden on 09/22/2009 16:27 -0500As the competition as to who will print the most money & debt to manufacture artificial growth rage, the US and the UK seem to be our two finalists. China was disqualified as the lack of transparency makes it difficult to quantify how much public spending is done in order to pump GDP numbers, though we do not doubt they try thir very best.
Daily Credit Summary: September 22 - Rolling Drones
Submitted by Tyler Durden on 09/22/2009 15:54 -0500Spreads were tighter again in the US today as post-roll activity picked up in IG leaving HY to charge tighter still (though not managing to make it back below 600bps) as roll re-positioning and tranche technicals seem to be dominating index activity. The ongoing compression in the widest and riskiest credits saw high beta names dramatically outperform low beta today, single-names outperform indices across the board and HVOL, XO, and HY all outperform IG.
Are Reverse Repo Liquidity Suctions Approaching?
Submitted by Tyler Durden on 09/22/2009 15:30 -0500With media reports of reverse repos starting to surface, are these actually honest intentions by the Fed to prevent yet another bubble for consuming the US before it is far too late, or, as we have come to expect from the Federal Reserve, merely more red herrings? Our money is on the latter.
Ugh! I Should Have Known!!!
Submitted by thetechnicaltake on 09/22/2009 15:01 -0500This comes from the Department of I Should Have Known.
Dash For Trash In Credit Hits Record
Submitted by Tyler Durden on 09/22/2009 14:48 -0500
After several relatively flat if slowly grinding tighter weeks, last week the highly leveraged credit market once again took a major leg in. And as has been true in equities with the neverending dash for trash, so has been the case in credit. Names like Cenveo, mega levered LBO FDC, Mediacom, Neiman Marcus, TRW and West all ripped much tighter this week. The reason: who knows. More importantly, who cares. it is a bubble, enjoy it. After all everyone is smart enough to get out of the door first when it pops.
Running The Junk Into Quarter End
Submitted by RobotTrader on 09/22/2009 14:40 -0500The September 30 statement print is right around the corner, so you have many managers chasing all kinds of assorted junk in order to "beat the index" and stay employed.
AIG Follow-On Equity Offering Rumor
Submitted by Tyler Durden on 09/22/2009 14:12 -0500They just need about $100 billion in new equity for the stock to be worth anything (oh yeah, and a little more dilution). Let the mutual fund managers line up. They can still make their year.
Themis Trading Responds To Jim Cramer
Submitted by Tyler Durden on 09/22/2009 13:55 -0500So, Cramer says milliseconds don’t matter for the average retail investor. But those milliseconds have contributed to a multibillion dollar high frequency trading industry. This money is not created out of thin air (sorry, Ben Bernanke not in this part of the business). Somebody is losing here. And, the retail investor is one of the losers.
Moody's Discusses Liquidity Withdrawal and Bank Balance Sheet Risk
Submitted by Tyler Durden on 09/22/2009 13:36 -0500"Credit losses continue to put banks’ earnings and profitability under pressure, and the fact that banks’ debt profile is skewed towards short-term maturities makes them vulnerable to market volatility and swings in investor confidence...As we mentioned before, banks have not provisioned for the full amounts of loan and securities losses that they will incur over the coming year, which we expect to reach $470 billion in write-downs by the end of 2010. Approximately only half of this has been recognized to date and we expect earnings to be insufficient to offset these losses during that period, resulting in many banks being unprofitable. The risk premium on bank debt is unlikely to fall in such a context. If anything, it may actually increase, especially for long-term debt which already commands a significantly higher premium. This may, in fact, be the most vulnerable feature of the U.S. banking sector right now." - Moody's
Eclectica Fund Market Update
Submitted by Tyler Durden on 09/22/2009 12:39 -0500"Most other investors, of course, remain enthralled at the prospect of a vigorous and sustained economic recovery. But with the follies of the financial sector now transformed into public sector debts, to be paid off by higher taxes and cuts to public expenditure, we fear that animal spirits outside the City are unlikely to prove so exuberant. History still suggests that such counter-trend price movements ultimately fail under the extravagance of their audaciousness. Time will tell."
Guest Post: Health Care - Let's Liberate the Masses
Submitted by Tyler Durden on 09/22/2009 12:13 -0500Perspectives on health care reform courtesy of Dylan Ratigan





