Credit-Default Swaps

Tyler Durden's picture

Global Stocks Plunge After Bank Of Japan "Shock"





Less than one week after the BOJ floated a trial balloon using Bloomberg, that it would reduce the rate it charged some banks which set off the biggest USDJPY rally since October 2014, we are back where we started following last night's "completely unexpected" (for everyone else: we wrote "What If The BOJ Disappoints Tonight: How To Trade It" hours before said "shock") shocking announcement out of the BOJ which did absolutely... nothing. "It’s a total shock,” Nader Naeimi, Sydney- based head of dynamic markets at AMP Capital Investors told Bloomberg. "From currencies to equities to everything -- you can see the reaction in the markets. I can’t believe this. It’s very disappointing."

 
Tyler Durden's picture

The ECB’s Monetary Policy Is Now Creating a Rush Into Derivatives





Investors now acknowledge that fundamental analysis is merely an afterthought when compared to the far bigger influence of central bank buying. While this destroys free markets, fuels malinvestment bubbles and rewards cronyism, it doesn’t stop central planners — it merely emboldens them. The latest example of such hubris was on full display last month when the ECB’s Mario Draghi increased QE by a third. Here’s some of what’s happened since. So “investing” has morphed into simply front-running the decisions of unelected central planners. That’s all there is to it.

 
Reggie Middleton's picture

"Pfandbriefe", or "It Wasn't Me!": Why Nobody Realizes That Germany Is the Biggest Systemic Risk in the EU





Again, if it smells like a crash, walks like a crash and looks like a crash, why believe anybody who says it's not a crash?

 
Tyler Durden's picture

Global Stocks Soar On Stimulus Hopes After Miserable Chinese, Japanese Data; Short Squeeze





"The Chinese market didn’t react as bad as we feared and with the weak export data there is some big hope that he central banks will react quite fast," John Plassard, senior equity-sales trader at Mirabaud Securities LLP in Geneva, told Bloomberg. "It’s a mix of hope of intervention from the Asian central bank, short squeeze and also a relief in some energy and banking sectors, the most shorted sectors." And there are your catalysts for today's surge: hope of more central bank intervention and a global short squeeze.

 
Tyler Durden's picture

"Few Are Yet Willing To Admit The Harsh Reality..."





A multi-decade Credit Bubble is coming to an end. The past seven years has amounted to an incredible blow-off top and the ongoing worldwide collapse in financial stocks provides powerful support for the bursting global Bubble thesis. Few are yet willing to accept the harsh reality that the world has sunk back into crisis as mal-investment, over-investment and associated wealth destruction remain largely concealed so long as financial asset inflation persists. This is true as well for wealth redistribution. The unfolding adjustment process will deflate asset prices so as to converge more closely with deteriorating underlying economic fundamentals.

 
Tyler Durden's picture

Europe Falls, U.S. Futures Rise As Oil Halts Two-Day Plunge





While the biggest news of the night had nothing to do with either oil or China, all that mattered to US equity futures trading also was oil and China, and since WTI managed to rebound modestly from their biggest 2-day drop in years, rising back over $30, and with China falling only 0.4% overnight after the National Team made a rare, for 2016, appearance and pushed stocks to close at the day's high, US E-minis were able to rebound from overnight lows in the mid-1880s, and levitate above 1900. Whether they sustain this level remains to be seen.

 
Tyler Durden's picture

Bank (Un)earnings: Why FICC Is Shrinking And Will Continue To





We are told bank earnings and revenue are under pressure from a slew of “tough markets” but what makes those markets so untenable in the first place?

 
Tyler Durden's picture

"Fundamentals Don't Matter Right Now, It's Panic On The Way Down," Trader Warns





We’re experiencing wealth-destruction due to asset-price dynamics alone. The negative moves will stop only when excess leverage is trimmed and not just when prices return to “fair value.”

 
Tyler Durden's picture

Another High Yield Domino Falls As $900 Million Lucidus Capital Liquidates





Moments ago, a third domino fell as Lucidus Capital Partners, a high-yield credit fund founded in 2009 by former employees of Bruce Kovner’s Caxton Associates, has liquidated its entire portfolio and plans to return its $900 million in AUM.

 
Sprott Money's picture

Fractional-Reserve Banking is Pure Fraud, Part III





In Part I , readers were presented with the inherent criminality and fraud of the crime-euphemism known as “fractional-reserve banking.” In Part II , readers saw how the banking crime syndicate has exploited the opportunities that this institutionalized fraud presents and turned our entire financial system into a teetering Ponzi scheme about to suffer its final collapse.

 
Tyler Durden's picture

It Begins - Managed High Yield Bond Fund Liquidates After 17 Years





Since inception in June 1998, UBS' Managed High Yield Plus Fund survived through the dot-com (and Telco) collapse and the post-Lehman credit carnage but, based on the press release today, has been felled by the current credit cycle's crash. After 3 years of trading at an increasingly large discount to NAV, and plunging to its worst levels since the peak of the financial crisis, the board of the Fund has approved a proposal to liquidate the Fund. While timing is unclear, this is the worst case for an increasingly fragile cash bond market as BWICs galore are set to hit with "liquidty thin to zero."

 
Tyler Durden's picture

Wall Street Banks Admit They Rigged CDS Prices Too





As Bloomberg reports, "JPMorgan Chase & Co. is set to pay almost a third of a $1.86 billion settlement to resolve accusations that a dozen big banks conspired to limit competition in the credit-default swaps market, according to people briefed on terms of the deal."

 
Tyler Durden's picture

Glencore Default Risk Surges Above 50%





Glencore is in total free-fall across all markets today. Most worrying for systemic risk concerns is the rush into credit protection that has occurred, as counterparties attempt to hedge their exposures. Forthe first time since 2009, Glencore CDS are being quoted with upfront pricing (something that happens as firms become seriously distressed). Based on the latest data, it costs 875bps per year (or 14% upfront) to buy protection against a Glencore default (which implies - given standard recoveries - a 54% chance of default).

 
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