Rating Agencies

Frontrunning: September 22

  • North Korea Ramps Up International Rancor With H-Bomb Threat (WSJ)
  • A nuclear test over the Pacific? Logical, terrifying (Reuters)
  • What's a 'dotard'? Kim's insult to Trump (Reuters)
  • From Rubble and Ruin, a Mexican Town Wonders How to Rebuild After the Earthquake (WSJ)
  • Bonuses Are Shrinking. Blame Hurricanes and Trump (BBG)

A Brief History Of Tail Risk: From LTCM, ABX, CDS, To VIX

"While I think valuations may be stretched, my bigger concern is that the real risk lies in market structure – more specifically to volatility and correlation strategies that quickly propagate through the financial markets with the aid of algorithmic trading..."

The Saudi Power Balance Is On A Knife-Edge

The sweltering heat of Saudi Arabian summer will feel like a cool breeze compared to the geopolitical fire that could soon take over the country if ongoing internal power struggles destabilize the Kingdom’s Royal Family and national security in the coming weeks.

Connecticut Capital Hartford Downgraded To Junk By S&P

"The downgrade to 'BB' reflects our opinion of very weak diminished liquidity, including uncertain access to external liquidity and very weak management conditions as multiple city officials have publicly indicated they are actively considering bankruptcy," said S&P Global Ratings credit analyst Victor Medeiros.

Noted Short Seller Marc Cohodes Comments On The Recent Events At Home Capital

The past two months have been a roller coaster ride for Home Capital shareholders culminating in the announcement of Berkshire Hathaway’s investment in the company this week.  But the deal raises at least as many questions as it answers, not least of which is whose interests are being served?

How Much Longer Can Junk Bonds Ignore Tumbling Oil? UBS Has The Answer

"If oil prices fall to $40 or below, the negative impact on rest of world profits could be a material headwind for aggregate corporate profits, and a prolonged $40 oil price would trigger more stress and defaults in lower-quality HY issuers heading into 2018."