Archive - Nov 2009 - Story

You sort of just knew Dubai was going to implode. Or if you didn't, you sure should have.

"Standard & Poor's Ratings Services today said it had taken rating actions on a number of Dubai-based government related entities (GREs) and transactions . Standard & Poor's has downgraded DIFC Investments LLC, DP World Ltd., Jebel Ali Free Zone (FZE), Dubai Holding Commercial Operations Group LLC (DHCOG), and Emaar Properties PJSC. All of these entities have been placed on CreditWatch with negative implications. The ratings on Dubai Multi Commodities Centre Authority (DMCC) were affirmed, although they were placed on CreditWatch negative. A CreditWatch negative placement also applies to the notes issued by Thor Asset Purchase (Cayman) Ltd. (Thor), which are securitized by cash flows from a revolving pool of existing and future receivables originated by Dubai Electricity and Water Authority (DEWA; not rated)." S&P

The bank that got its ass kicked first in the subprime collapse in 2007 may be the first one again to get the KY treatment from the Dubai implosion.

Contagion effect is spreading as the weakest link in the Eurozone catches fire.

Panic settles in as the update call for Nakheel bondholders crashes and has to be postponed due to unprecedented and unexpected surge of participants.

Focus observations from Barclays as the Dubai SNAFU has ripple effects around all global markets.

Maybe it is a good thing markets are closed in the US today, as the world is certainly not sharing America's festiveness. The ES was down 22 at last check. The FTSE (yes, the entire index) was halted for more than 3 hours earlier, in expectation of the second coming of Jerome Kerviel. The FTSE futures, however, continued trading, and are now at the lows of the day, down 128. And all bets are off in Dubai where CDS for Dubai World, and its linked Dubai sovereign, were wider by about 120 bps. Dubai World hit 612 bps while Dubai is at 545. The spread between the two entities, which Bloomberg describes as "Dubai World is a holding company for the Government of Dubai", is converging by the second, as can be seen on the chart below. With everyone expecting the next domino to come out of Eastern Europe, it is only fitting that it would instead appear in the Persian Gulf.

RANsquawk 26th November Morning Briefing - Stocks, Bonds, FX etc.

Zero Hedge's inkmaster, John Redmann on the typical horrors of Thanksgiving dinner with the family.

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"In my opinion, the current equivalent of the mythical Four Horsemen of the Apocalypse are our financial leaders in the western world who are enthusiastically promoting and aggressively implementing quantitative easing in an attempt to sustain an obviously failed system and to bail out their banking cronies. They would include the atavistic Lawrence Summers...the extremely naive Fed chairman, Ben Bernanke, the truly feckless U.S. Treasury Secretary, Timothy Geithner and Bernanke's British equivalent, the hapless Mervyn King, head of the Bank of England."

1. ECOPET, 35.9 million, 20 trades
2. CCU, 34.5 million, 10 trades
3. GMAC, 34.5 million, 13 trades
4. PDE, 33.1 million, 10 trades
5. HEIGR, 25.8 million, 8 trades

Spreads closed mixed with IG unch and HY marginally tighter as volumes dried up this afternoon ahead of the holiday. With low volumes in indices and less in single-names and intraday ranges in IG and HY at their lowest in months, picking out themes from today's market action seems useless although we do note that between Dubai and Gold, the economic headlines seemed to be forgotten about.

Ben "Darth" Bernanke...