Archive - Story

• Mortgage rescues fail as price drops spur increase in defaults (Bloomberg)
• Greenspan admits was mystified by subprime market until 2005 (NYT)
• Hypo to be nationalized after JC Flowers walks (Bloomberg)
• Will vulture investors be critical to recovery (

• Continental Flight 3407 crashes in Buffalo suburb with 48 passengers (WSJ)
• China's hyped recovery is a pipe dream (Naked Capitalism)
• Now, how does the government spend the money?
  

The boondoggle party is over... Or at least it is for Bank of Countrywide Lynch. The recent prolapse in populist hatred for TARP recipients means no more fancy conferences at the corners of the world where tequila shots are cheap, ignorant yokels still think banking is cool, and strip clubs are plenty.

The boondoggle party is over... Or at least it is for Bank of Countrywide Lynch. The recent prolapse in populist hatred for TARP recipients means no more fancy conferences at the corners of the world where tequila shots are cheap, ignorant yokels still think banking is cool, and strip clubs are plenty.

Another insane rally for all the wrong reasons. Mortgage subsidies are an effective debt reorganization, and confirmation of a lack of equity value. LACK, not ABUNDANCE.

I have previously discussed the topic of negative basis trades, specifically as manifested in cash-CDS pair trades.

I have previously discussed the topic of negative basis trades, specifically as manifested in cash-CDS pair trades.

Busy day for bankruptcies. Aleris, which was in preparation to file bankruptcy, finally pulled the plug today.

* Says refinancing and new capital to total $3 billion
* Says company has $800 million in cash and cash equivalents
* Says operations expected to continue as usual
* Says intends to implement its financial restructuring through a chapter 11 filing
* Says agreement-in-principle with an ad hoc committee of certain debt holders on terms to reduce debt by about $8 billion
* Says chapter 11 filing to be initiated on or before April 1, 2009

Fitch Ratings-London-12 February 2009: Fitch Ratings has today downgraded Ukraine's Long-term foreign and local currency Issuer Default Ratings to 'B' from 'B+'. This reflects increased risk of a banking and currency crisis in Ukraine, due to intensified stress on the financial system and greater risks to successful implementation of Ukraine's IMF-supported programme. The Outlooks on both IDRs are Negative. The agency has also downgraded the Country Ceiling to 'B' from 'B+'. The Short-term foreign currency IDR is affirmed at 'B'.

The credit market is on fire, as is proof that greater fool theory is alive and well. Yesterday saw the placement of 3 high yield issues at a much more reasonable original issue discount, and yet accounts were swarming like flies on excrement with lipstick. All three issues have immediately generated about 1-2 points return post break, leading many original allocators to flip their holdings to naive secondary market bidders.

In the corporate realm it is good to see investors heeded our advice about the increasing default risk at Continental.

In the corporate realm it is good to see investors heeded our advice about the increasing default risk at Continental.

Terex, the maker of heavy duty off-road and mining trucks, announced earnings last night of $0.62 which actually bear street consensus of $0.54, however this morning the stock is down about 30% premarket on this ominous disclosure in the 8K filed:

Terex, the maker of heavy duty off-road and mining trucks, announced earnings last night of $0.62 which actually bear street consensus of $0.54, however this morning the stock is down about 30% premarket on this ominous disclosure in the 8K filed: