This page has been archived and commenting is disabled.
Frontrunning: June 2
- Fed mouthpiece Hilsenrath speaks: No QE3 for now - Fed Holds Steady as Economy Slows (WSJ)
- Fed May Signal Balance Sheet Will Stay at Record (Bloomberg)
- Fed Owes U.S. Stakeholders Accounting on Loans as People’s Bank (Bloomberg)
- China will have to tackle local govt debt (Reuters)
- Biggest HFT firm in the world to sell HFT counter-measures: Getco Expands Client Business, Offers Algorithm to Funds (Bloomberg)
- Greece Is in Line For a New Loan (WSJ)
- E.coli outbreak in Europe caused by new toxic strain (Reuters)
- The Chanos thesis is delayed: Banking regulator plans to shift 2-3 trillion yuan ($300-$470 billion) in debt off the books of local governments (Shanghai Daily)
- Kan: Ready to Step Down After Finishing Quake Work (WSJ)
- Trichet calls for tougher euro rules (FT)
- Act of war? Google reveals Gmail hacking, says likely from China (Reuters)
- Greece goes further into junk territory (FT)
- Economy shadows Obama 2012 re-election hopes (Reuters)
- Cummings Seeks “Engagement Letters” Due Today Between Mortgage Banks and Private Consultants (4closurefraud)
- Why Fed Is Unlikely to Have Third Round of Easing (PIMCO)
Global highlights courtesy of Egan-Jones:
- Google Antitrust Probe by U.S. Could Take Years
- American Airlines Must Let Orbitz Use Its Flight Data on Site, Judge Says
- Asia Rising Attracts Hedge Funds From Algebris to Soros Betting on Revival
- Australian Retail Sales Rebound in April, Biggest Jump Since November 2009
- BOE’s Fisher Says He Would Consider Expanding Asset Purchases in Downturn
- Central Banks Says China’s Local-Government Debt Risk Needs ‘Attention’
- China Lending-Binge Hangover Looms in 2013
- Citigroup Said to Shut $400 Million Proprietary Fund as Ahmed Has New Role
- Fed May Signal Balance Sheet Will Stay at Record to Counter U.S. Slowdown
- Fed Owes U.S. Stakeholders Accounting on Loans as People’s Bank
- Fed’s Chief Counsel Says Faster Emergency-Loan Disclosure May Hurt Economy
- Ford Missing Quality Targets Puts Pressure on Mulally to Fix Mishaps: Cars
- GLOBAL MARKETS: European Stocks Sink; Economy Worries Weigh
- Greek Default Risk Raised by Moody’s as Bond Aid Readied
- Joy Global's April net income rises from $120M to $162M.
- Moody's Downgrade Puts Greece in Debt-Rating Hall of Shame Alongside Cuba
- Nokia warns of zero margins, Microsoft acquisition rumours escalate
- Papandreou Greek Highway Roadblock Hurts Ellaktor Shares: Freight Markets
- Spain Sells EU4 Billion of Bonds
- Trichet Calls for Single Euro Finance Ministry
- U.S. Economy: Factories, Employers Pull Back as Costs Climb
- Wien Buying in S&P 500 Decline Where Birinyi Sees Chance of 10% Correction
- World Oil Demand Needs Extra 1 Million Barrels a Day, OPEC Official Says
»
- 2398 reads
- Printer-friendly version
- Send to friend
- advertisements -
Tyler, you forgot one:
Today's disastrous headline out of Europe should come from Ireland. They are in court today to determine the legality of haircuts for bondholders. Of course, no one is talking about it over at the BlowHorn [CNBC] which should be warning enough for everyone. No one can see this coming, by the way.
http://www.reuters.com/article/2011/06/01/ireland-bonds-idUSLDE74U27A20110601
Interesting, but not that significant. In my experience in these sorts of insolvency/ restructuring cases, you often get vulture funds buying subordinated debt for a few cents and then trying to exploit the nuisance factor to extract slightly better terms ("pay me to fuck off"). It was a common tactic during the European cable company restructuring that happened in the last decade. I even remember one deal where a fund bought a majority position in a suburdinated, unsecured debt in a pointless intermediary company, that had been placed into the deal for no sensible reason. They were able to get paid back at par because nothing could be done without the agreement of this entity, which was in the hands of the bondholders owing to default.
I see no reason in this case for the courts to side with the bondholders, but we'll see. Worst case, they can just move all the other debts and assets to a different entity, leaving the subordinated bond holders sitting in an empty shell. Sub debt holders will know this, so be making a play for a bit more money to save the hassle...
Uh huh.
In my opinion, you seem to be glossing over the actual headline of the story, and specifically the words "Test Case."
The entire situation in Europe is the proverbial game of dominoes. If you think for a minute that Irish bondholder haircuts would not fuel the enthusiasm for such cuts in Greece [and everywhere else], then you will be whistling past the graveyard. The significance of the Irish dollars involved is not the issue, but the path forward that will be established.
But you may certainly take my opinion of it with a grain of salt. I will be looking for the market to explain it just like everyone else.
But remember, these are specifically subordinated bonds, not linked to CDS contracts, non payment of coupons is not even an event of default. The Irish situation is also different to the other ones in that the government agreed to guarantee the senior unsecured debt of the banking sector.
As I said, everyone seemed to accept that sub debt holders would take a big haircut in a restructuring, but as is common, funds buy on the annoyance factor.
This doesn't have wider implications on the sovereign debt issue as sovereigns don't do subordinated debt...
But you are right, it's a game of dominoes, though the plan has been all along to preserve senior debt holders at the expense of everyone else - shareholders, junior creditors, taxpayers.
And skimming all this, an obscure government hack sees the magic word "E.coli".
"Ah ha!" says the propagandist, "There's our next wild card we can blame bad economic numbers on!"
Ever wonder just how many "new" strains are actually introduced? Like the flu strains?
Actually, from what I understand we're doing a great job ourselves. We're hardening and selecting stronger bacterial strains with all of our anti-bacterial products.
Luckily, there are warehouses full of body bags...just in case.
Evolution is a wonderful thing. All it takes is someone to eat something different, not wash their hands after taking a shit then touch food.
It's weird how the media forgets to mention how e.coli happens in 99% of the cases.
The guy who ripped off up to 15 failed banks including INDYMAC and Sonoma Valley has been
arrested for filing a fire damage claim with 2 different insurers. Marin County DA is not
fucking around. Neither are the FBI, IRS, SIG-TARP or shareholders. Story covered in the
Marin Independent Journal and Santa Rosa Press Democrat and of course in cartoon land.
http://www.pressdemocrat.com/article/20110601/BUSINESS/110609906/1350?Ti...
http://www.youtube.com/watch?v=lWZpXDyAIkk&feature=youtu.be
It's on like DONKEY KONG mutha fukkas.
"Radioactive water accumulating in Japan’s crippled Fukushima plant may start overflowing from service trenches in five days, potentially increasing the contamination from the worst nuclear crisis since Chernobyl."
http://www.bloomberg.com/news/2011-06-01/radiated-water-at-fukushima-pla...
Means of creating money in a false way are numerous.
For example derivatives create buying power in the $Trillions and is not the focus of inorganic money or dilution as a cause of loss of the value of the dollar.
There are several more prime examples ie such as the baby boomer phase of credit which created over $43 Trillion in buying power.
It is of no coincidence that dollar valuations are negatively affected by credit and derivatives.
It does not matter how dilution arrives, just that it really does happen.
The Fed is a pittance versus these instruments of dilution.
Means of creating money in a false way are numerous.
For example derivatives create buying power in the $Trillions and is not the focus of inorganic money or dilution as a cause of loss of the value of the dollar.
There are several more prime examples ie such as the baby boomer phase of credit which created over $43 Trillion in buying power.
It is of no coincidence that dollar valuations are negatively affected by credit and derivatives.
It does not matter how dilution arrives, just that it really does happen.
The Fed is a pittance versus these instruments of dilution.
Interesting that the US market falls 2% and market participants already squealing about QE3.
The addicts need their fix.
One wonders how long they can stand the pain of withdrawal.
I don't feel the sickness yet, but it's in the post. That's for sure. I'm in the junkie limbo at the moment. Too ill to sleep. Too tired to stay awake, but the sickness is on its way. Sweat, chills, nausea. Pain and craving. A need like nothing else I've ever known will soon take hold of me. It's on its way."
"So why did I do it? I could offer a million answers, all false. The truth is that I'm a bad person, but that's going to change, I'm going to change. This is the last of this sort of thing."
Yet every indication The Fed gives is they want the debt ceiling raised.
Use to be, during the time of Napoleon and Hitler, the world wasn't interested in handing out awards for European unity. Times have changed I guess. Edit: I wonder how Europe would look now if they both were bankers...
http://online.wsj.com/article/SB10001424052702303745304576360961826796994.html
At a ceremony to receive the Charlemagne prize for European unity, Mr. Trichet proposed a raft of possible radical changes to improve the euro zone as a currency bloc as a number of its member states struggle with debt crises.
"Biggest HFT firm in the world to sell HFT counter-measures: Getco Expands Client Business, Offers Algorithm to Funds"
"Investing" has devolved into cyberwarfare...
CHIN-RON
ROFL...so HFT get a nice 'market maker' write up...more like 'market crasher' or 'market screwer' to sell GETAlpha to people who want to do their shady business dealings without being noticed.
Great.
Also if they sell it to everyone, then they can't be singled out.
Great strategy. We've seen it before
Taint everyone, and the rules can't change.
If everyone has herpes......