Creditors

The Canary In Canada's Real Estate Mine Just Died: Toronto's Urbancorp Files For Bankruptcy

With the Urbancorp bankruptcy filing, and the first official canary death in Canada's real estate "coal mine", we anticipate that the near future for Canada's real estate sector will be a far more volatile one. Excluding Vancouver of course: that particular Chinese money laundering hub will continue humming until the locals finally decide they have had enough of having their city sold to criminal Chinese oligarchs.

Why Are Bankrupt Oil Companies Still Pumping?

A central tenet in the thesis by analysts about the oil markets rebalancing has been that as prices declined, oil companies would be forced into bankruptcy. That in turn would lead to declining production, and eventually a rebalancing of supply and demand in the market, followed by higher prices. That process is already taking longer than many expected, and it looks like more time is needed. That additional time to balance the market is being driven by an unexpected factor; bankrupt oil companies are still pumping.

Cash-Strapped ISIS Is Killing Its Own Fighters To Sell Their Organs

It has gotten so bad for the cash-strapped Islamic State terror group that ISIS has resorted to killing its injured fighters so that their organs can be extracted and sold on the black market abroad. "Doctors were threatened to take out the body organs of a wounded ISIL militant," the Arabic-language al-Sabah newspaper reported citing a source in the Iraqi city of Mosul.

Frontrunning: April 19

  • Early Warning Signs of Recession Flash Faintly in U.S. Jobs Data (BBG)
  • Who Needs Buybacks? One S&P 500 Variant Just Rallied to a Record (BBG)
  • The unpredictable new voice of Saudi oil (FT)
  • Saudi's Other Warning Makes Oil Traders Sweat After Doha Failure (BBG)
  • U.S. oil investors rush for protection at $35 as Doha talks collapse (Reuters)
  • Trump candidacy: Where some fear to tread others see a path to victory (Reuters)

Malaysia CDS Spike After Abu Dhabi Puts Scandal-Ridden 1MDB In Default

The dispute between an Abu Dhabi sovereign fund and Malaysia’s troubled state fund 1MDB over more than $1bn in missing payments hit a crescendo on Monday when the Emirates investment vehicle said its Malaysian counterpart was “in default” on an agreement between the two and terminated the deal.  Promptly thereafter, Malaysia 5 year CDS spiked by 11 bps, the most since March 21, to 163 bps as the market starts to quietly ask whether this ongoing scandal may just drag down the entire Malaysian state.

Argentina's First Bond Issuance In 15 Years Is Already Nearly 3x Oversubscribed

Almost exactly two years ago, in April 2014, Greece issued €2.5 billion in 5 year bond yielding around 5%, which was met with huge investor interest and ended up being 8x oversubscribed. Fast forward to today when another former shutout from global bond markets, Argentina, is in the FT's words, "on the cusp of one of the most anticipated comebacks in recent history, as the Latin American country ends a 15-year exile from the international debt market with a multibillion-dollar sale." This issue is likewise oversubscribed, and according to Reuters there are already $40 billion in roders for the $15 billion offering.

Frontrunning: April 18

  • Crude's Losses Drag Ruble, Loonie Lower; Stocks Pare Their Drop (BBG)
  • Grand Oil Bargain Is Victim of Saudi Arabia's Iran Fixation (BBG)
  • Both Parties’ Presidential Front-Runners Increasingly Unpopular (WSJ)
  • It's up to you, New York: state takes center stage in election campaign (Reuters)
  • Rousseff Hangs by a Thread After Losing Impeachment Vote (BBG)
  • China March home prices rise at fastest rate in two years, top cities boom (Reuters)

Jim Grant: "Make America Solvent Again"

$13,903,107,629,266. Can the nation afford this much debt? This much we have learned about debt after 40 years of writing and study: It is better not to incur it. Once it is incurred, it is better to pay it off. America, we have a problem.

Default Cycle Now In Full Swing As Goodrich Petroleum Is Latest To File Chapter 11

This morning another troubled energy producer, Goodrich Petroleum announced a prepackaged Chapter filing meant to implement a financial reorganization after struggling to restructure its debt amid declining energy prices. This follows the filing of Energy XXI just 24 hours ago. Since the start of 2015, about 50 oil and gas producers have gone bankrupt, owing more than $17 billion, according to law firm Haynes & Boone LLP.

Futures Fade As Chinese "Good News Is Bad News" For Fed, Oil Drops As Doha Concerns Emerge

Good news is still bad news after all. After last night's China 6.7% GDP print which while the lowest since Q1 2009, was in line with expectations, coupled with beats in IP, Fixed Asset Investment and Retail Sales (on the back of $1 trillion in total financing in Q1)  the sentiment this morning is that China has turned the corner (if only for the time being). And that's the problem, because while China was a good excuse for the Fed to interrupt its rate hike cycle as the biggest "global" threat, that is no longer the case if China has indeed resumed growing. As such Yellen no longer has a ready excuse to delay. This is precisely why futures are lower as of this moment, because suddenly the "scapegoat" narrative has evaporated.

Do Ongoing Global Events Prove The World Is Ready For Revolution?

Gazing into the abyss of worsening future authoritarian control, will we turn and walk away, ignoring our differences for the sake of our mutual betterment around the planet — or will we scoff, succumb, and tumble over the edge in our complacency? The choice is ours...

Valeant Crashes Below $30 As Large Bondholder Calls "Default" Event

One week ago, we warned that "Valeant Lenders Demand Two Pounds Of Flesh For Covenant Waivers", a function of Valeant having virtually no leverage. Well, while Valeant proudly announced it had obtained a covenant waiver from its lenders late last week, it appears not everyone was onboard with the plan, and as a result moments ago Valeant stock crashed (below $30) after hours as major bond investor Centerbridge has notified the company that it intends to call a default event, presumably on annual report delays breaking covenants.