Italy

Latvia Finds Itself In Currency And Funding Crisis, Kills EM Rally

In an overlooked piece of data, indicating that the 3 month rally is likely done, yesterday EU-member Latvia saw its overnight interbank rate surge to a record 16.4% while the overnight deposit rate double to 24% after the country was unable to sell any debt securities at a local debt auction, according to its main stock exchange. The Latvian Treasury had offered to sell 20 million lats ($20 million) of July maturities, 10 million of September, December and June 2010 paper. None of this paper found any buyers.

Latest DTCC CDS Update (Week Of May 22)

The latest data out of DTCC indicates that the volatility in the equity world is spreading to credit. Not only that, but last week the CDS market turned decidedly pessimistic, with over $215 billion in net CDS purchased, the highest amount in terms of net notional in over 2 months. Cumulative net CDS purchased since the start of April has ramped up to almost half a trillion dollars.

A View On Sovereign Risk

The chart below presents the top 20 sovereigns with the largest amount of net CDS (not gross) notional outstanding. Interestingly, Italy and Spain, with their $20.4 billion and $11.1 billion in net notional, have the most net risk exposure, (General Electric, parent of brutally realistic and objective financial news station CNBC is at $11.2 billion). Additionally, the chart demonstrates not just the current spread of any given sovereign's CDS level, but also the phenomenal tightening that has occurred since March 6.

The Top 10 Italian-Something Collaborations of the Automotive World

With FIAT on the brink of taking over every desperate, cash-strapped, sales-ridden car company on the northern hemisphere- I thought it a fun idea to run-through an “Italian Job” list, the “Italian Combo”- of cars, if there ever was such a thing. The result of one part Italian- the other part- well, something else…

Latest DTCC CDS Update (Week Of April 10)

The past week was virtually dead in CDS trading, with a mere $14.6 billion in notional changing hands, however consisting of surprisingly robust 18,776 contracts. The prior week derisking in sovereigns reversed, and last week saw a $24 billion derisking in the space. All other sectors were significantly unchanged, with the exception of consumer services where $11.2 billion in protection was unwound.

Latest DTCC CDS Update (Week Of April 3)

Due to a flood at Paper Street HQ, numerous files were destroyed last week, among them the interim weekly CDS report. Unfortunately, this means we need to restart the CDS tracking from scratch this week. As there is no prior week reference just take our word for what has been happening: not a whole lot in credit land.

Tracking The G7 Sovereign Risk

Zero Hedge has written repeatedly in the past about the importance of keeping track of sovereign CDS levels as more and more corporate risk (especially in financials) is being offloaded to the balance sheet of respective sovereign balance sheets. And while pundits may claim these indications are useless as there is no way, no how that the U.S.

Tracking The G7 Sovereign Risk

Zero Hedge has written repeatedly in the past about the importance of keeping track of sovereign CDS levels as more and more corporate risk (especially in financials) is being offloaded to the balance sheet of respective sovereign balance sheets. And while pundits may claim these indications are useless as there is no way, no how that the U.S.

Tracking The G7 Sovereign Risk

Zero Hedge has written repeatedly in the past about the importance of keeping track of sovereign CDS levels as more and more corporate risk (especially in financials) is being offloaded to the balance sheet of respective sovereign balance sheets. And while pundits may claim these indications are useless as there is no way, no how that the U.S.

Detroit's Tentacles Cross Atlantic: Fiat Junked

Not sure if this fall angel downgrade of Fiat SpA is due to the "Chrysler connection" (which alone would be worthy of a C- rating), or just because S&P realized there are other auto companies out there that deserve a careful scrutiny, but either way, here it is.

Carmaker Fiat SpA Becomes A Fallen Angel On Downgrade To 'BB+/B' Re Weak Liquidity; Long-Term Rating Still On Watch Neg

Among other parts of the S&P report: