Archive - Apr 2009 - Story

The list is enough to provide enjoyable weekend long reading. Easily some of the funniest stuff seen in a long time, yet somehow it makes its way straight to the FDIC's website. One wonders if all these entities were aware their e-mails would end up for public viewing and amusement, and if so whether they would have submitted them in the first place.

Among the more serious funds/companies/individuals are:

"Anyone who is doing anything sensible right now is either losing money or is out of the market entirely." These are the words of a quant trader, who is seeing something scary in the capital markets. Scary enough to merit a warning that we could be on the verge of another October 87, August 2007, or January 2008.

The Treasury is looking to hire BCG to assist with the plan for GM and Chrysler going forward. This is bound to spark outrage mostly because of the fees (up to $7MM) and also the feeling that the government is once again looking to pad the pockets of those capitalist fatcats.

• Fed tells banks not to divulge results of "stress test" ahead of earnings (Bloomberg)[question: which exactly SEC regulation is being trampled by this directive?]
• Surprise, surprise: Goldman to seek multi-billion stock offering (WSJ) [how many more banks will offer equity ahead of earnings, and ahead of stress test results?]
• Game of credit cost smoke and mirrors at wells fargo (

Trim Tabs has released its weekly mutual fund flow data: the company estimates that all equity mutual funds posted an inflow of $11.9 billion in the week ended Wednesday, April 8, versus a revised inflow of $3.0 billion in the previous week.

Life insurer Genworth Financial dropped 22% after the Office of Thrift and Supervision said it had declined the company's application to become a savings and loan holding company.

One of the more pervasive pieces of conventional wisdom is that senior classes in non-agency RMBS (read AAA) are safe and sound even in a defaults due to their first money nature that isolates them from the potential loss problems of the lower tranched classes. An interesting tidbit that has arisen as a result of a close read into the HR 1106 Bill "Helping families save their homes act" indicates that many deals' legal documents have a "bankruptcy carve-out".

come to think of it, they do bring up some valid points.

[youtube=http://www.youtube.com/watch?v=pzTrPVSni14&hl=en&fs=1]

hat tip Ian

According to MC Cabrera, GM's bondholders are about to get a substantial shaft: a new proposed offer to them would include:

- $0 new cash
- $0 new debt
- 10-20% of the company stock.

This is a dramatic deterioration from the old proposed offer (which bondholders were not happy with in the first place):

- 8 cents cash
- 16.5 cents new debt
- 90% of GM stock

Zero Hedge has previously discussed the aberration effects of daily gaps (up and down) as well as trading volume on the true state of market fair value indications. We present some VWAP (Volume-Weighted Average Price) data for our readers based on SPY index price and volume levels. We end up with some interesting conclusions.

In light of the market moving preannouncement by WFC, which as David Faber points out may have used some "leeway" with the marks on the company's mortgage related assets, it makes sense to present some California foreclosure data to show just how hot the refi market really is. We grab the following data and charts from the excellent Field Check Group blog.

Providing the ugly fundamental truth in the good ole days used serve as cold water for a rally... now - not so much: after all who cares for logic? Dave chimes in.

The market has still not reflected reality