CDO

Tyler Durden's picture

The Complete Guide To China's CNY 4 Trillion Margin Doomsday Machine





On the heels of a veritable bloodbath in Chinese equities overnight which saw the SHCOMP slide a harrowing 8.5%, the entire world is now beginning to take a hard look at the notion that dramatic bouts of selling pressure are aggravated and perhaps triggered by an unwind in the multiple backdoor margin lending channels that allowed investors to skirt official restrictions on leverage and helped to drive the market’s world-beating rally. Here is the complete guide to China's CNY4 trillion shadow margin edifice.

 
Tyler Durden's picture

China Just Created A Half-A-Trillion "Plunge Protection" Frankenstein





China’s central bank is officially in the business of financing leveraged stock buying and as Bloomberg reports, the country's state-run margin lender now has the capacity to pump the equivalent of five Greek bailouts into leveraged stock trades. 

 
Tyler Durden's picture

China Races To Rescue Stocks As Margin Mania Unwind Wreaks Havoc





"The selling pressure so far has mainly come from stock-related borrowings via various unofficial channels where the leverage is much higher," BofAML says of the dramatic sell-off in Chinese equities. On Wednesday, the country's securities regulator moved to reassure markets as the unwind of hundreds of billions in leveraged trades threatens to collapse China's world-beating stock bubble.

 
Tyler Durden's picture

The Biggest Threat To Chinese Stocks: "Shadow Lending" Crackdown





China's margin loan balance sits at around CNY2.2 trillion, and while that’s certainly impressive, there’s every reason to believe that at least another CNY500 billion in margin lending has been funneled into the Chinese stock market via the country’s shadow banking complex. As regulators tighten the screws on shadow margin lending, are stocks in for a rude awakening?

 
Phoenix Capital Research's picture

The Fed is Now Officially in VERY Serious Trouble





This is the REAL issue with interest rates, NOT the economy. 

 
Tyler Durden's picture

How Jamie Dimon Became A Billionaire





Two years ago, bank analyst Mike Mayo asked JPM chief Jamie Dimon a simple question: why should affluent customers not pick UBS over JPM due to a mismatch in capital ratios, to which Dimon's response was even simpler: "that's why I'm richer than you." To which we then added: "No logic, no rationale: all about the bottom line, which to Jamie at least is all that matters. The bottom line was indeed all, because as Bloomberg calculated overnight, over the past several years, Jamie Dimon quietly became not just "richer than you", but "much" richer: his net worth is now well over $1 billion!

 
Tyler Durden's picture

The Real Story Behind Deutsche Bank's Latest Book Cooking Settlement





On Tuesday, Deutsche Bank agreed to a $55 million SEC settlement tied to allegations it hid billions in losses by mismarking its crisis-era derivatives book. The bank has always contended its valuation methodologies were sound. Here is the real story...

 
Tyler Durden's picture

Presenting The $77 Billion P2P Bubble





"Loans take time to season and go bad, and Wall Street loves to package and pass along risk. The music will stop — it always does — and this will not end well.”

 
Tyler Durden's picture

Hong Kong Insanity Launches Exchange Operator's Shares Into Orbit





Because the only thing more exciting than betting on the continuation of a margin-fueled, self-feeding domestic mania is betting on the exchange where the maniacs are trading...

 
Tyler Durden's picture

CLO Volume Hits Record As PE, Wall Street Look To Stay Ahead Of New Rule





March was a record month for CLO issuance with $15.2 billion in deals coming to market, bringing the YTD total to $29 billion and making Q1 2015 the best first quarter in history for CLO new issue volume. And while a JPM analyst who spoke to Bloomberg says managers “want to get deals done early before risk retention kicks in,” we're confident that it’s all about keeping credit flowing to deserving borrowers and not at all about a desire to keep exposure to 5% of a collateral pool littered with loans to “companies that are of lower credit quality or that do not have a third-party evaluation of the likelihood of timely payment of interest and repayment of principal” off of the books.

 
Tyler Durden's picture

Lynn Tilton Charged By SEC For CLO Fraud, As Warned Here Nearly Two Years Ago





Back in September 2013 we wrote "Coming Soon To A Theater Near You: MBIA's $1 Billion World War Z" in which we explained why MBIA will soon have a substantial problem (amounting to just about around $600 million) with several CLOs which we dubbed "Zombie CLOs" or as they were actually known, Zohar, on which it had written insurance, and which would become evident sooner or later once someone took a long, hard look at the collateral manager of the CLOs, namely Lynn Tilton's Patriarch Partners. Well, finally someone did take a long, hard look and today, our warning comes full circle following a shocker out of the SEC accusing Lynn Tilton of fraud and of "hiding the poor performance of loan assets in three collateralized loan obligation (CLO) funds they manage."

 
Tyler Durden's picture

The Bubble Is Complete: 'Smart Money' Buys Into Bespoke Tranche "Opportunity" (Again)





Single-name CDS performance suggests investors are buying the "opportunity" Citi and Goldman are selling, providing further proof that we truly will never learn.

 
Tyler Durden's picture

Meet Landlord Loans: You Too Can Be A Real Estate Speculator





"Three big private equity firms — the Blackstone Group, Colony Capital and Cerberus Capital Management — are betting that so-called landlord loans to small and midsize investors will become the next big opportunity to profit from the rebound in the United States housing market. The private equity firms are providing financing indirectly to hundreds of real estate funds buying single-family homes, something that until recently was not widely available."

 
Tyler Durden's picture

"Controlling Today's Perception Of Tomorrow's Economic Strength" Is THE Fed Mandate





Controlling (stabilizing) today’s perception of tomorrow’s economic strength attached to (and thus backing) the USD is the Fed mandate. For if we lose control of today’s false perception well then god only knows what tomorrow’s given value may be. This is the absolute ‘mandate’ of central banking.

 
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