Archive - Jun 8, 2009 - Story

Update: mortgage spread to 10 year just spiked to 111 bps, up +5

The bond vigilantes about to start the real pounding of the negative convexity trade. Mortgages can't catch a break. In the 5 seconds since you clicked on this, not one short sale or refi was executed.

Update: mortgage spread to 10 year just spiked to 111 bps, up +5

The bond vigilantes about to start the real pounding of the negative convexity trade. Mortgages can't catch a break. In the 5 seconds since you clicked on this, not one short sale or refi was executed.

Update: mortgage spread to 10 year just spiked to 111 bps, up +5

The bond vigilantes about to start the real pounding of the negative convexity trade. Mortgages can't catch a break. In the 5 seconds since you clicked on this, not one short sale or refi was executed.

SCOTUS blog reporting that according to a response filed by the Solicitor General Elena Kagan on behalf of the United States of America, no court, not even the Supreme Court, has an authority to rule on the applicability of the TARP funds, previously designated exclusively for financial company bail outs, for the Chrysler case.

GDP constituent Gross Private Domestic Investment has plummeted (apologies for the delay in noting) according to the St. Louis Fed, to pre-2000 levels.

GDP constituent Gross Private Domestic Investment has plummeted (apologies for the delay in noting) according to the St. Louis Fed, to pre-2000 levels.

GDP constituent Gross Private Domestic Investment has plummeted (apologies for the delay in noting) according to the St. Louis Fed, to pre-2000 levels.

The PPIP is all but dead. But don't tell that to perma-CRE-bull Barry Sternlicht. The owner of such debacles as iStar (last time we checked the all time worst name in the IG11 index) and RevPar plummeting hotel chain Starwood hotels, is hoping to raise brand spanking new capital via an IPO for, of all things, a new REIT - Starwood Properties Trust, and use taxpayer money to buy other bankrupt hotels.

Total short capitulation: that's the best way to describe what happened in the loan/bond universe during the last week. The only bond that widened was that of Aeroflex. Continued tightening in retailers and auto names has gone on beyond stupid-pill levels and officially entered the bizarro twilight zone: TRW bonds tighter by 400 bps, with both Sealy and Neiman Marcus tighter by roughly 300 bps.

Total short capitulation: that's the best way to describe what happened in the loan/bond universe during the last week. The only bond that widened was that of Aeroflex. Continued tightening in retailers and auto names has gone on beyond stupid-pill levels and officially entered the bizarro twilight zone: TRW bonds tighter by 400 bps, with both Sealy and Neiman Marcus tighter by roughly 300 bps.

• Airlines may lose $9B in 2009, double previous forecast, IATA Says
• Airlines say wait for Airbus directive on A330
• Ailysys Q4 loss widens to $113.8M on goodwill write-off. Revs down 20% at $155.5M.
• American International Group Inc. has disclosed deals to sell assets of $6.6B since bailout.
• Analogic Q2 earnings fall 66%; sees 2 more weak quarters.
• Barclays Plc is in talks to sell Barclays Global Investors
• BlackRock said to be frontrunner for $10B Barclays Global Investors.
• Fink aspires to be no.
  

• Corporate profits diluted 4% by U.S. share sales, dividend cuts (Bloomberg h/t root)
• HSBC unit to stop financing for investors in hedge funds (Bloomberg)
• Gorgon Brown faces revolt after poll thrashing (Reuters)
  

Update 1: Chrysler just filed its response to the Indiana appeal. The biggest variable here is the value that Chrysler assumes the first lien lenders would attain in a liquidation which at $800 million, Jones Day claims would be a far worse outcome than the $2 billion the secured lenders are guaranteed under the current plan.