Archive - May 13, 2009 - Story

As Zero Hedge initially reported nearly two months ago, the main reason why the banks' fixed income trading desks generated phenomenal profitability in January and February had nothing to do with actual trading of fixed income and everything to do with AIG's hamheaded (and loss-generating) unwind of its CDS book, which by implication generated one-time, massive profits for counterparties to the trade (read: the banks, which are now doing all they can to issue shares in the open market day in and da

In a stunner of a development, Las Vegas casino operator Fontainebleau has amended its ongoing lawsuit against a set of banks, and has alleged that Deutsche Bank is now "seeking to destroy the Fontainebleau in order to minimize competition" with the Cosmopolitan Resort and Casino, which was acquired by Deutsche Bank in a foreclosure auction in September 2008 for $1 billion, after the casino had defaulted on a $760 million loan.

Our friends at dealbreaker have got some fun snippets from today's Citadel... apologies... RenTec all is good call. Explains the rerouting of all Pall Mall deliveries over the last week to East Setauket.

The preliminary result demonstrates a much lower inside market midpoint than expected.

The preliminary result demonstrates a much lower inside market midpoint than expected.

The preliminary result demonstrates a much lower inside market midpoint than expected.

The General Growth Properties LCDS auction is currently ongoing, and just finished the Initial Bidding Period. The results will be posted in about 6 minutes, eventually followed by a final Dutch auction bidding process at 2 pm. The reason this is relevant as it could provide a significant repricing and valid market test of secured obligations in the CRE market.

The participating bidders in the auction is provided below (they will hopefully work not only on behalf of their prop desk but for their clients as well).

Bank of America, N.A.
Barclays Bank PLC

JP Morgan continues to try and distance itself from the crowd of merely mortal banks. The issue spread on the notes will be curious as it provides yet another datapoint of how much incremental cost of debt all the other FDIC insured bank issuers will have to pony up eventually once (if) the government decides to pull its support from the banking sector and have banks fare on their own yet again.

Still waiting with (a)baited breath to see BofA/Merrill Lynch to set off on the non-guarantee path.

And so the backpedaling begins. Bloomberg quotes an administration official who has stated that the D-3's "bankruptcy might take as long as two years, not the two months President Barack Obama suggested as a target."

• Apocalypse when?

Retail sales fall 0.4% in April (0.5% ex autos), second straight monthly decline. Analyst consensus was 0.1% gain. Oops.

TrimTabs notes that in the second half of April (Apr 16-30), short interest on the Russell 3,000 stocks dropped to 13.62 billion shares ($260 billion / 2.88% of market cap) from 13.95 billion shares ($259 billion / 2.94% of market cap) on March 31.