Archive - May 2009 - Story

Here comes the thumping of the bond market. Barclays report by Joseph Abate out discussing the shortage of short paper, which could wreak havoc on T-Bills. As many readers know today a 300 bps fee is implemented for fails (incomplete delivery) which means many dealers will simply sit on paper, making shorting that much more difficult, and we could see negative T-Bill rates as soon as the next few days. All we need now is illiquidity in the bond market to follow the joke that equity liquidity has become to put a cherry on top of this utterly broken market.

Here comes the thumping of the bond market. Barclays report by Joseph Abate out discussing the shortage of short paper, which could wreak havoc on T-Bills. As many readers know today a 300 bps fee is implemented for fails (incomplete delivery) which means many dealers will simply sit on paper, making shorting that much more difficult, and we could see negative T-Bill rates as soon as the next few days. All we need now is illiquidity in the bond market to follow the joke that equity liquidity has become to put a cherry on top of this utterly broken market.

A very good summary by Douglas Baird, professor at the University of Chicago law school, who analyzes the implications of the 363 sale and the (ab)use of 1129(a)(7) of the bankruptcy code on the Chrysler bankruptcy and why the first 5 days will likely be critical.

Thanks to traders who point out that SPY continues to be on the HTB list from market open for days on end now. Hearing grumblings about IWR as well.

This is getting childish.

Everything you need to know about the dirty prehistory in the Chrysler bankruptcy, compliments of Jones Day. A must read.

• Must read: Here come the little AIGs. Syncora (SCA) told by regulators to stop paying claims; next up - MBIA?

• Stress test results delayed as conclusions debated (Bloomberg)
• Fed likely to offer 5 year TALF loans soon (Bloomberg)
• Buffett faces a grilling from investors (FT)
• Banks believed to be holding 600,000 foreclosure properties off market (

Also the quant fund has underperformed the S&P by 14.3% YTD. Oddly Medallion manages to dodge the land mines.