Archive - Aug 2009 - Story

• IG Wider 0.5bps to 113.5
• HY Wider -7/16 to 89 7/16
• Stocks... closing at VWAP.

Another classic 1999 day where the "AMAT train is leaving the station" starter pistol is fired to get the SMH greyhounds running, and Bernanke utters some soothing words for the speculators to start a post-FOMC party.

No Comment.

IG12: 114bps + 1.5 bps (weaker)

IG12 intrinsics: +6 bps (much weaker)

HY12: 791bps + 10 bps (weaker)

HY12 intrinics: +31 bps (much weaker)

30 Year: 4.52%, +8 bps (weaker)

DXY: poundage

Equities: who cares, just feed more redbull to WOPR

Left Right Left Right Up Down Up Down A B A B Reset Start (Triangle Square for extra lives)

QE Ending: "To promote a smooth transition in markets as these purchases of Treasury securities are completed, the Committee has decided to gradually slow the pace of these transactions and anticipates that the full amount will be purchased by the end of October."

Yeah, the Swiss... "Oh, they're neutral? right?" Haven't they always been? "They say nothing?" Well, maybe not then- but now, the Feds and UBS AG have reached a deal to squeal on some 52,000 potentially tax-evading Americans.

Results out: only $14.4 billion indirects tendered out of total $57 billion competitive. Of the $14.4 billion, $10.4 billion was allocated. Indirect bids 45.7% vs. Avg. 35.25% (Prev. 32.11%). Indirect bid-to-cover was 1.39. Overall bid-to-cover including highly motivated primary dealers was 2.49. Allocated at 3.734% high yield vs expected 3.708%.

Crap stocks (RUT) outperforming quality (SPY) again. The early morning action was likely precipitated by some colorful index arbing.

"For 2009, and perhaps beyond, preservation of capital will again be the name of the game. Cash is king with a liberal helping of government securities in the portfolio as well - even at today's richly inflated prices. Our key message to investors is that the asset management game has now changed. Unfortunately, for those that believe we are still in the same economic world as was the case in the Greenspan era, the game is up."

The newly hired traders at the Federal Reserve proving their mettle.

Developing story

Someone threw in the towel this morning, and volume exploded. Subsequent to the initial exuberance volume has been retracing to average, and will promptly turn below average in the next few minutes.

In what may just be a valiant effort to raise cash- JP Morgan is looking to unload some 23 office properties... They're selling. Not financing. I'm reading this as- "getting the f-out of Dodge..."

Love him or hate him, he has been right before, and is very likely correct again. Pay particular attention to Nassim's claim on the impact of marginal buyers: exemplified all too well by the 10.8% decline in short interest in the second week of July and the resulting 9% squeeze in the S&P.