Lithuania

Clusterfuck Nation ThinkTank's 2010 Forecast: Definitely Not Rosy

This depression will be a classic deleveraging, or resolution of debt. Debt will either be paid back or defaulted on. Since a lot can't be paid back, a lot of it will have to be defaulted on, which will make a lot of money disappear, which will make many people a lot poorer. President Obama will be faced with a basic choice. He can either make the situation worse by offering more bailouts and similar moves aimed at stopping the deleveraging process - that is, continue what he has been doing, only perhaps twice as much, which may crash the system more rapidly - or he can recognize the larger trends in The Long Emergency and begin marshalling our remaining collective resources to restructure the economy along less complex and more local lines. Don't count on that." - James Howard Kunstler

Frontrunning: December 22

  • Eurostar may struggle to move passengers by Christmas (Bloomberg)
  • Lithuania let CIA use secret prison for interrogation (Bloomberg)
  • A rising euro poses a threat to parts of block (WSJ)
  • FBI probes hacker attack on Citigroup (WSJ, AP)
  • Dubai stock markets to merge amid debt woe (WSJ)
  • Are S&P 500 growth projections realistic (Seeking Alpha)

2010 Key Sovereign Themes From Moody's

With sovereign CDS (and risk) finally becoming a heated topic of debate, Moody's has compiled its 2009 Review and 2010 Theme Review for sovereigns. The report opens with some rather stark and reasonable observations: "2010 may prove to be a tumultuous year for sovereign debt issuers given the uncertainties surrounding the likely pace and intensity of fiscal and monetary 'exit strategies' as governments start to unwind quantitative easing programs. Indeed, the only certainty is that the exit strategies will be fraught with a good deal of execution risk. In our view, the key policy challenge facing advanced economies is therefore to time the exit perfectly: not too quickly or too soon so as to prevent choking off growth; and not too slowly or too late so as not to unsettle financial markets." In short: 2010 will be the year when the experiment of offloading all private sector risk on the public balance sheet ends. Whether the conclusion will be a happy or sad one, remains to be seen.

Daily Credit Summary: December 8 - Greece'd Darkening

Spreads ended the day mixed in the US today with very low intraday ranges and only marginal moves as HY just outperformed IG. Breadth was modestly negative as TMT and CONSumer names underperformed. We note that credit has outperformed equity in the last couple of days as the dollar has sprung higher and perhaps this is another of the coal-mine's canaries that risk-aversion (think steam behind the run) is hitting stocks.

Guest Post: The Untapped Energy Riches Of Uzbekistan

While many Western investors remain fixated on somehow acquiring a slice of Turkmenistan’s natural gas riches, despite a recent scandal over the country’s actual reserves, there is another country further east whose energy and mineralogical reserves have been overlooked – Uzbekistan.

Frontrunning: October 7

  • UK faced "bank runs, riots" as RBS and HBOS neared collapse (Bloomberg), but now it is all so much better
  • Yakuza's Series 7 exam is harbinger for economy (Bloomberg, h/t Eric)
  • Is REIT rally rooted in reality or wrongly rising? (WSJ, h/t Geoffrey)
  • Here's your answer: US office vacancies reach five year high of 16.5% (Bloomberg)
  • Evans-Pritchard: China calls time on dollar hegemony (Telegraph)
  • The $3.4 trillion problem that refuses to be swept under the carpet: Fed frets about Commercial Real Estate (WSJ)
Raymond Shaw's picture

Wednesday UK and Europe highlights. Coverage of the mayhem in the Asian markets today. Since I wrote the post, Indian market indices opened to the downside despite upbeat industrial output data, seems likes the standard theme today across Asia. Article will be updated to keep up with data releases (BOE inflation report, etc). More inside as usual.

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.

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.

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.