Archive - Apr 2010

April 29th

Zero Hedge Endorses David Rosenberg's Demand To "Ban The Bailout"

Zero Hedge fully endorses David Rosenberg's latest call: Ban The Bailout

First we have governments bailing out banks (and auto companies and mortgage providers), homeowner debtors, and now we have governments bailing out governments. When does someone finally say — enough is enough!
Look, Greece is not going to “fail”. They are going to default. There will be a debt restructuring. And there will be some recovery. Bondholders will take a haircut — why shouldn’t they? Why should Angela Merkel care if German banks own Greek bonds? Greece has been in default in its recent 200-year history almost half the time. So has most of Latin America come to think of it. What about Russia?

Frontrunning: April 29

  • Must read: Lombard Street believes that the major if not only buyers of the current rally are investment banks themselves, perpetuating biggest "pulling oneself out by the bootstraps" con game in history (FT)
  • As Basis Yield Alpha Fund seeks compensation over its Timberwolf losses, Goldman pressed for CDO settlemetn (FT)
  • FTW: European confidence improves to two year high (Bloomberg) on what? Expectations of EMU unraveling
  • Greenwich Street Capital refused to be "first" ACA, saw Paulson deal as too risky (WSJ)
  • Already holding junk, Germany hesitates (NYT)
  • Baidu says sales to beat estimates on Google China "semi exit" (Bloomberg)
  • Simon Johnson: To save the Eurozone: $1 trillion, ECB reform, and a new head for the IMF (Baseline Scenario)
  • Fed can't delay market storm (MarketWatch)
  • So as expected it was all just a ploy to get more porn download bandwidth: SEC Schapiro touts Goldman suit while seeking funds (Bloomberg)

Leo Kolivakis's picture

Toppling Goliath?

European pension funds hired more fund managers in 2009 than in the previous year to take advantage of bargains in crisis-hit asset classes, a study by Mercer said on Tuesday. And PE shop Candover, which has been slashing costs in the face of a cash shortage, is in talks with the Alberta Investment Management Company (Aimco). Despite the flows and deals, I doubt PE will stage a serious comeback.

Greek (Inverse) DIP Update: Bailout Loans To Be Junior To Existing Claims

In breaking all ties with reality, the IMF has decided that not only will US taxpayer money be freely abused to rescue a profligate Greece, but that money will be effectively junior to existing claims, in essence making it some MC Escher DIP reverse DIP nightmare. Basically US taxpayers will be Last In, Last Out, and will recover any proceeds only after existing creditors get paid out. Pardon us, but this is bloody ridiculous. When will someone in the mainstream media start focusing on this??? Americans are getting the short end of the stick, and nobody in this country knows or cares about it.This is more billions that will be promptly paid and never recovered.

Daily Highlights: 4.29.10

  • Asian currencies gain, bond risk drops after Fed pledges to keep rates low.
  • Asian stock markets little lower, on concerns of a spread of sovereign debt risk in Europe.
  • Australia raises excise duty on tobacco by 25%, ends advertising.
  • Australia poised to force tobacco companies to sell cigarettes in plain packs, a world first.
  • Brazil lifts benchmark rate to 9.5% from 8.75%.
  • European stocks rise after the IMF promises to increase the aid for Greece to 120B euros.
  • Fed restated their intention to keep benchmark interest rate near zero for “extended period”.
  • Global stock markets mixed as European debt crisis continues to unsettle investors.

asiablues's picture

The ongoing Greek debt crisis has revived the old arguments that all national governments need monetary sovereignty. So, what if Greece had stayed with the Drachma, and never switched to the euro? Would this debt crisis be averted?

madhedgefundtrader's picture

The Gold Rush in Iraq

Iraq will soon become the world’s largest oil exporter. The success of the recent oil auctions in Iraq is creating a windfall for American oil services companies. It will bring the most significant change to world trade patterns this century. Who knew it would take so long? There are major implications for the rest of us. (SLB), (BHI), (WFT), (HAL)

April 28th

The Client Always Comes First At Goldman... Except When He Doesn't, Which Is Also Always

One day after the Goldman hearings, we were left with the warm and fuzzy impression that the whole Goldman farce was for nothing, and that everything the firm had been doing for the past 5 years was perfectly legitimate. The prop trading abuse, the discount window generosity, the endless abundance of flow and prop inventory commingling, the endless client rape...All these allegations must have been for naught. Which is why we were thoroughly disappointed when our sense of sudden enlightenment that we may have been wrong all along about Goldman, vanished promptly and without a trace once we had a chance to read the 2007 self-evaluation of Goldman Managing Director Michael Swenson. The line penned by Michael, who incidentally was the least like of the three Goldman SPG MDs testifying on Tuesday based on peer feedback, that broke our collective heart is the following: "Once the stress in the mortgage market started filtering into the cash market, I spent numerous hours on conference calls with clients discussing valuation methodologies for GS issued transactions in the subprime and second lien space [redacted] is prime example). I said "no" to clients who demanded that GS should "support the GSAMP" program as clients tried to gain leverage over us. Those were unpopular decisions but they saved the firm hundreds of millions of dollars." Alas, we find that all of Goldman's sincere hypocritical lies before the Senate committee were... precisely just that.

Spanish Q1 2010 Unemployment Number Accidentally Leaked, Surpasses 20% For First Time Since 1997

A freak leak of the Spanish unemployment number by the National Statistical Institute (INE), the equivalent to the DOL, was captured by Spanish daily, according to which for the first time since 1997, the unemployment rate in the country that was notched by S&P today, will surpass 20%. This number was supposed to be under embargo until Friday. According to the temporary leak which was subsequently promptly removed, the number of unemployed in Spain increased from 4.3 million to 4.6 million between the end of 2009 and March 31, 2010. What's worse is that the unemployment among Spain's youth is reaching epidemic proportions: "the unemployment rate for those under 25 years in the first quarter of 2010 was 40.93% and 18.02% in those over 25 years. In the group of 16-19 years, the rate is 59.79% and 13.1% among the unemployed aged 55 and older." Dealing drugs is probably a more lucrative job than working for the government anyway. No taxes either.