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Japanese corporate CDS forming a line at the woodshed. G7 risk bloodbath continues

• CNBC makes headline news over every uptick in S&P futures, read all about it
• January housing starts drop to all time low (Bloomberg)
• Russia 2009 GDP forecast cut from -0.2% to -2.2% (Moscow Times)
• Police foils bomb attack at Citibank in Athens (Yahoo - hat tip reader Mike)
• Germany may be Europe's white knight.
  

Sometimes Mike O'Rourke pins the events of the prior day just that little bit better than anyone else. Today is a case in point. We present his letter to clients in all its unadulterated glory and hope he won't sue... One can only hide behind the whole DMCA thing so long...

• Emmanuel Rahm was paid $260,000 to be Freddie Mac director in 2000-2001 (NYPost)
• Hedge fund consolidation to heat up (Bloomberg)
• Doug Kass: Fear and Loathing on Wall Street (TheStreet)
• More brokerage mergers coming (

The only thing more amusing than the deranged ramblings of an insane lunatic, are the deranged ramblings of a whole lot of insane lunatics (i.e. the executive committee of General Motors)... and their numerous legal and financial advisors... for whose "efforts" it is of course taxpayers who end up footing the bill...

Last week's derisking continued, however at a more moderate pace, with $83 billion of net notional increase in CDS versus $138 billion last week. Only the healthcare and industrials sectors saw a rerisking, with industrials due for a substantial technical push wider after 2 weeks of rerisking.

Since the start of '08, the S&P has declined by 43%. Yet, if you only held the market on days following a down day, you would have earned a cumulative return of 36%. In contrast, if you only held the market on days following an up day, the cumulative return would have been -58%. In terms of daily (close-to-close) returns, the average return since the start of '08 following down days has been 0.28% while the average return following up days has been -0.62%.

* Requests total of up to $30 billion in U.S. government funding, including $7.5 billion in credit line
* Says would run out of cash by March without new gov't funding
* Says has not reached deals with UAW on VEBA, bondholders on debt restructuring

Chrysler - Free Legal Forms

Obama just coined the post-Lehman version of the ever popular "sell on the news"

Tangentially:

Goldman's Jon Winkelreid to retire March 31.

Also, is there some more ominous subtext to this Bloomberg headline than meets the eye?
"Obama Aide Says Bankruptcy Can't Be Ruled Out For Automakers"

Excel Maritime came out with this bombshell earlier, claiming that two major charters have begun paying the company dayrates at half the agreed rate, and that Excel is seeking legal action.

In a very interesting development for the CMBS market, and one which could lower mortgage-backed trading levels significantly, Riverton Apartments (what better example of a real estate bubble than a leveraged purchase of a housing project in Harlem), which was the first New York apartment complex to spook the CMBS market when it defaulted on interest payments last year, will be auctioned off on February 20, as owners Rockpoint Group and Stellar Management have been unable to modify loan terms.

Earlier today TV station company Young Broadcasting filed for bankruptcy in the Southern district of New York, raising the ytd default rate to 5.19% by notional outstanding, and 4.37% by number of issuers. The company owed $370 million of secured debt and $640 bonds at the time of filing.

The administration's draconian enforcement of bonus cuts for "distressed banks" has made Lloyd Blankfein and a slew of Wall Street executives hold their breath until they get the details of Geithner's stress test in order to immediately repay their portion of TARP (although it is unclear if Warren Buffett will dump another billion or so into Goldman at this point). So what will be the likely metrics for the stress test and which banks will be able to pass the test, in order to be on their merry way to TARP repayment?

The SEC has charged Robert Allen Stanford with "fraud of shocking magnitude that has spread its tentacles throughout the world." Mario Puzo's next book is already in the works. This makes the Cosa Nostra look like amateur hour.

Apparently the charge relates to $8 billion of CDs sold.

Some amazing facts presented in the SEC complaint below:

SEC Charge - Free Legal Forms