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Daily Highlights: 8.06.09
- Stiglitz said he expects a “very slow recovery” in the U.S. economy and that areplacement for Fed Chair Bernanke should be considered.
- Treasury Dept, responding to demand from China, other investors, to boost sale of TIPS.
- Asian stocks rise on confidence economy is recovering; Alumina, NTT gain.
- ECB, BOE may decide against further stimulus as evidence points to recovery.
- Bank of Japan said to anticipate deflation through 2011, depressing rates.
- Australian employers unexpectedly add 32,200 workers, jobless rate 5.8%.
- Taiwan Exchange seeks to list shares in Shanghai as China relations warm.
- American Axle's Q2 loss narrowed to $288.6M despite a 50% sales decline.
- AmEx says write-offs tied to card debt fell to 9.2% last month.
- Cardinal Health Board authorizes a $500M share repurchase program.
- Chubu Electric in final talks for stake in Chevron Australian LNG venture.
- Cisco's Q1 sales to drop by 15-17% as recession cuts equipment orders.
- Commerzbank reported a net loss of €746M on higher provisions for bad loans.
- Dean Foods' Q2 net rises 31% to $64.1M on lower input prices, cost cutting measures.
- Deutsche Telekom's Q2 net rises 32% to €521M, revs up 7.4% at €16.24B.
- Everbright raises $1.6B in first Chinese brokerage IPO in 7 years.
- Obama's car industry adviser: GM will return to profits, hold an IPO before Chrysler.
- Gazprom will export Siberian Gas to Asia in bid to curb reliance on Europe.
- HSBC to add more than 10 branches in China as country rebounds from slump.
- Hyatt Hotels files to raise up to $1.15B in IPO.
- Lenovo reported a smaller-than-est. loss of $16M on improved domestic sales.
- Lloyds Banking predicts drop in bad loans after posting $5.2B H1 loss.
- Marsh & McLennan Cos. swung to a Q2 loss of $193M on the effects of divestiture.
- News Corp. posts Q4 loss of $203M, on MySpace writedowns, decline in advt sales.
- P&G's move to fight recession; creates cheaper detergent, Tide Basic.
- Prudential Fincl's fin-srvcs unit posts a profit of $538M; revs down 7.5% at $6.34B.
- RR Donnelley's Q2 profit tumbled 83% on weak demand.
- Sony to release E-Readers for $199 and $299, challenging Amazon's Kindle.
- Unilever's net falls 17% to €758M, hurt by lower margins, pension costs.
- Zurich Fincl Srvcs Q2 net drops 28.9% on lower investment gains.
Recent Egan-Jones Rating Actions
CENTEX CORP (CTX)
DR HORTON INC (DHI)
KRAFT FOODS INC (KFT)
BAKER HUGHES INC (BHI)
EMERSON ELECTRIC CO (EMR)
PEPSICO INC/NC (PEP)
PULTE HOMES INC (PHM)
ARCHER-DANIELS-MIDLAND CO (ADM)
PEPSIAMERICAS INC (PAS)
PEPSI BOTTLING GROUP INC (PBG)
PEPSICO INC/NC (PEP)
AMERISOURCEBERGEN CORP (ABC)
PRECISION CASTPARTS CORP (PCP)
Data provided by: Egan-Jones Ratings And Analytics
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AIG premarket bid - drum roll please......$27.15
I fucking love the short squeeze...
is goldman manipulating stiglitz as well now??!1
This is getting very disgusting
Wall Street to reap windfall from AIG breakup
http://www.marketwatch.com/story/wall-street-to-reap-windfall-from-aig-b...
retail sector just absurd now
beware of being sucked into dark pools. haha -- JWN up 45% in just about two weeks on declining sales.
Ha! Responding to 'Demand'? Might there be a tactical reason for Treasury to sell more TIPS? For example, might the Treasury believe it might be profitable to be SHORT TIPS? Perhaps because they are in the inevitable deflation camp?
the boe pumped another $84b in stim homey.
Tyler, totally off topic, but as you may know MBIA & Ambac are perpetrating massive, blatant fraud with regulatory complicity.
This quarter made this much more obvious -- any chance you'd enjoy information sufficient to do a mini-expose?
A cursory look at their reserves over the last two quarters, as well as the lawsuits filed against them, should do it. This Q makes it painfully obvious.
If so, I could write something up for you to look at if you think it might be interesting.
As a muni trader I'm always looking for info so this would be good!
I can tell you, I don't even look at the credit enhancement because they're all crap. underlying, underlying, underlying...:)
Well I'm more than willing to, re: MBIA et al.
Too many examples to cite, but here is a simple one:
Closed-end second-lien and HELOC claims for MBIA's portfolio, which is primarily 2006-2007 vintage Countrywide and GMAC-ResCap garbage, have been running at $650 mm a quarter.
In fourth quarter of 2008, MBIA estimates FY '09 losses/LAE of $900 mm.
In Q1, they pay out $700 mm and raise FY '09 claims projections to $1.8 billion (whoops)
In Q2, they pay out $650 mm (numbers are really higher, as they cede ~20% losses to reinsurers, some of whom are about to blow up, and they are booking big "salvage and subrogation" benefits on future excess spread reimbursements which will not materialize.
So in Q2 unless you think claims are going down 66% Q over Q for H2 '09, that $1.8 billion figure is laughable. (July servicer reports indicate a bit of an uptick in roll rates)
Then, throw in the fact that they are now booking a $1.1 billion "recovery" from servicers and originators as they project they will win litigation forcing the originators to buy back "deficient loans" (so much for the unconditional and irrevocable guarantee, eh? Underwriting is for squares, they must think) both lawsuits are being contested by the originators, and this is a really ridiculous gimmick.
Don't get me started on the adequacy of the ABS CDO impairments... And the validity of the transfer of assets to National, the newfangled municipal only guarantor that is being cordoned off from MBIA's devastated structured finance book.
That's being contested by three parties, to date: Aurelius Capital management, a hedge fund owning RMBS wrapped by MBIA contesting "fraudulent conveyance"
3rd avenue capital management run by buddy-pal Marty Whitman, which owned hundreds of millions of surplus notes that were left at the denuded structured finance company
And a group of who's who banks who own insurance policies on ABS CDOs by MBIA and realize that they just saw ~$5 billion in assets run out the door that potentially could be not availaboe to them.
Cheers, much more if anyone is interested. This is repugnant and maybe you could shed a light on it.
Ah the 'ol fraudulent conveyance. The end game can only be one outcome.
The federal government will make sure muni bonds retain their credit enhancement. With tax receipts falling faster than Paris Hilton's panties after nickel beer night and spreads still pretty wide as you travel down the credit ladder, issuers will need all the help they can get in reassuring investors it's a good thing to invest locally. If investors flee this sector, the anarchy everyone talks about on this board will happen quicker than you think.
We'll see. Depends how long they can keep it up. Thanks for input. Suppose it isn't interesting enough for any broader exposition.
5.8% unemployment? What are the Aussies doing right?
Everyone working part-time.
You know, one day the cat is going to get out of the bag.
Never got that saying - who keeps their cats in a bag anyway?
I once found a sack of dead cats under a bridge when I was working. The smell could knock a buzzard off a shit wagon.
The kind of sick motherfucker that would suffocate kittens in a garbage sack...
A replacement for Ben The Debaser? That's unpossible.