Archive - May 27, 2009 - Story

Sheila Bair on Cramer today. Instead of pandering her flawed policies in front of a small (if any) cable audience, with such pearls as "insured depositors have nothing to worry about", maybe Ms. Bair can finally get back to Zero Hedge in its FOIA request attempting to obtain some/any information on just what is the compensation/fee structure for FDIC's advisor, and the real man behind the curtain, Perella Weinberg.

The Auto Task Force Car Czar formerly known as Steve Rattner has reported an overall net worth of between $188 million and $608 million. Obviously the former NYT reporter can relate to the UAW's loss of its healthcare benefits. Among his assets:

- Between $500,000 and $1 million in Goldman stock.
- Less than $1,001 apiece in Bear Stearns Cos., Citigroup Inc., and Lehman Brothers Holdings Inc.

The Auto Task Force Car Czar formerly known as Steve Rattner has reported an overall net worth of between $188 million and $608 million. Obviously the former NYT reporter can relate to the UAW's loss of its healthcare benefits. Among his assets:

- Between $500,000 and $1 million in Goldman stock.
- Less than $1,001 apiece in Bear Stearns Cos., Citigroup Inc., and Lehman Brothers Holdings Inc.

A stunner - Art Samberg is shutting down Pequot Capital, after alleged insider trading allegation disclosure has "cast a cloud over the firm and have become a source of personal distraction."

Full letter via Dealbreaker:

May 27, 2009

To Our Clients and Friends:

I am writing to you, our loyal clients and friends, to let you know that I have reached the painful conclusion that it is necessary to wind down Pequot's business.

The bond market has spoken, and it demands QE2 (the equity market is insane - it has no idea what it wants). The way treasuries and mortgages are trading, the situation threatens to very quickly spiral out of Bernanke's control (and then how will Wells and BofA pretend like they have some recurring cash generating power? On the non-recurring front, AIG has already been tapped dry.) The table below indicates that based on 2009 supply (not to mention outstanding notionals) the Fed will have to reach into its toolkit for some other (very drastic) measures.

The bond market has spoken, and it demands QE2 (the equity market is insane - it has no idea what it wants). The way treasuries and mortgages are trading, the situation threatens to very quickly spiral out of Bernanke's control (and then how will Wells and BofA pretend like they have some recurring cash generating power? On the non-recurring front, AIG has already been tapped dry.) The table below indicates that based on 2009 supply (not to mention outstanding notionals) the Fed will have to reach into its toolkit for some other (very drastic) measures.

Spreads were mixed in the US with IG worse, HVOL wider, ExHVOL weaker, XO stronger, and HY rallying (although all indices were well off their intraday tights and in fact closed at intraday wides).

First, it was the GM Term Loan B which benefited from hedge fund exuberance, taxpayer generosity, and the administration's soon to be nationalization, and hit 95 earlier today after trading in the 80s on Friday, and much cheaper over the past month, as the consensus has emerged that the administration will pay off the loan at par (a bit of a change from the fulcrum security treatment at Chrysler).

The treasury curve has just imploded, with the 10Y, a massive outlier (especially in a 2s10s30s curve), just hitting a record steepness. The 2s10s just broke the previous wide of 273 bps and at last check was trading at 275 bps. Stocks, as expected compliments of the mysterious Spoos (in)visible hand, still defying gravity.

First Treasuries have gotten walloped, to far beyond pre QE levels (the 10 UST is getting monkeyhammered as I type, see below), next the 2s10s curve has steepened to almost record levels (at 271 bps recently, record wide at 273 bps, a mere 2 bps away), and now the pain is slowly shifting into mortgages.

In the annals of rank regulatory intercourse there isn't much more severe debauchery than the distant history that is the BankUnited story. Yes, big bank failures have become so common that they seem to pass through the cycle news unnoticed, untapped and unexplored. The ugly girl on prom night. Attended to briefly, then discarded in the blinding haze of hangover blurred Sunday morning sunshine, a rueful shake of the head and the cursed oath never again to drink Jagermeister.

As of yesterday, over 4,700 people had signed the petition by Alan Grayson to get Democrat co-sponsors of Ron Paul's HR1207 bill to audit the Federal Reserve. Even more importantly, 14 members of the House Of Representatives have joined Raul Grijalva, bringing the total cosponsors to 181.

Despite all my efforts, Zero Hedge keeps growing. Like a tumor. I always said if I had a tumor I would name it "Marla." So now we are stuck with Marla. Marla Singer, to be precise. In addition to stealing from laundromats, chain smoking and attending testicular cancer support groups, Marla brings to Zero Hedge a bitter blend of confrontational, thought-provoking prose, and razor sharp insight. Forgive her if her reporting resembles an expletive-laced stream of consciousness. She constantly has a stomach-full of Xanax.

The most recent, April, reading of the NY Fed's Index of Coincident Economic Indicators (CEI), indicates continued decline in activity in New Jersey, New York State and New York City.

The Index declined as follows:

New York City - 4.1% annualized decline for April, following a 5.2% decrease in March
New York State - 8.1% annualized decline for April, following an identical decrease in March.
New Jersey - 6.5% annualized decline for April, following a 6.6% decline in March.

The most recent, April, reading of the NY Fed's Index of Coincident Economic Indicators (CEI), indicates continued decline in activity in New Jersey, New York State and New York City.

The Index declined as follows:

New York City - 4.1% annualized decline for April, following a 5.2% decrease in March
New York State - 8.1% annualized decline for April, following an identical decrease in March.
New Jersey - 6.5% annualized decline for April, following a 6.6% decline in March.