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On Credit Default Swaps

"This is legal?" Stephanie Ruhle on CDS after watching "The Big Short" (Bloomberg TV) 

Tyler Durden's picture

S&P Just Warned Asia's Largest Commodity Trader It May Be Junked

As usual, S&P was late, but just over three months after our explicit warning, the rating agency finally came out with the catalyst we have been expecting when moments ago it said that it had "placed its 'BBB-' long-term corporate credit rating on Hong Kong-based supply-chain management service provider Noble Group Ltd. and the  'BBB-' issue rating on the company's senior unsecured notes on CreditWatch  with negative implications." In other words, Asia's Glencore is about to be junked.

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Subprime Auto Goes Full-Retard: Lender Sells $154 Million ABS Deal Backed By Loans To Borrowers With No Credit

Remember Skopos Financial, the US subprime auto lender run by Santander Consumer veterans? Well, in a testament to just how desperate America is to perpetuate the US auto market "renaissance," the company just sold $154 millon worth of paper to investors partially backed by loans to borrowers with no credit score.

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Moody's Says Failure To Raise Debt Limit Does Not Mean Default As Jack Lew Pleads To "Honor Our Obligations"

In an op-ed released today in the USA Today, the US Treasury Secretary takes his appeal to raise the U.S. debt target once again, this time to the $19.6 trillion number disclosed here previously, by pointing fingers at "some in Congress" who "are endangering this progress by once again manufacturing a crisis for our country. By waiting to the last minute to act on the debt limit, Congress could cause a terrible accident. This is not an abstraction; failure to raise the debt limit would mean devastating impacts for taxpayers, consumers and businesses." Only this is not really true...

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Fitch Downgrades Brazil From BBB To BBB-, Outlook Negative - Full Text

Brazil's economic recession is likely to be deeper and longer than Fitch's earlier expectations and its performance has diverged materially from those of its rating peers. Medium-term prospects also look weak compared to peers and most other large emerging markets. Fitch forecasts that Brazil's economy will contract by 3% and 1%, respectively in 2015 and 2016 before recording modest growth in 2017, with risks skewed largely to the downside.

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Meanwhile, Brazil's Currency Just Plunged To An All-Time Low...

The negative feedback look between Brazil's political and economic crises is serving to make each day worse than the last. Tuesday was no exception...

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Moody's Downgrades France, Blames "Political Constraints", Sees No Material Reduction In Debt Burden

Citing "continuing weakness in the medium-term growth outlook," Moody's has downgraded France:


Apearing to blame The EU's "institutional and political constraints," Moody's expects French growth to be at most 1.5% and does not expect the debt burden to be materially reduced this decade.

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Glencore's "Doomsday" Plan Disappoints As CDS Resumes Rise; Question Emerges: "What Happens If Company Fails"

Some have started to ask: what happens if Glencore were to fail? Well, since Glencore is not just a miner, but probably the world's largest commodity trading desk, and is a key commodity counterparty for everyone, the answer is simple: Lehman... only this time in the commodity space.

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"Liar Loans" Are Back! 2008 Here We Come

Liar loans are back from the dead which means that if you look under the hood, you might just have a shoddy credit or two hiding in the collateral pool of your triple-A mortgage-backed paper. Meanwhile, in a further sign that we've learned nothing since the crisis, non-Agency RMBS is set to stage a comeback.

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"We've Run Out Of Buyers" - Half Of Homes In New York Are Now Losing Value

"What happens in any bull asset bubble such as what we've seen is you run out of buyers. It's hard to get deals done if the bottom third can't get a mortgage."

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Policy Confusion Reigns As China Caps Muni Debt, Uncaps Bank Debt, And Bad Loans Soar

In the latest example of Beijing attempting to deleverage and re-leverage all at once, China has lifted a cap on loan-to-deposit ratios for banks while simultaneously capping local government debt issuance for 2015. Meanwhile, bad loans are still on the rise at China's "big four" banks, underscoring the extent to which China's economy is rapidly deteriorating and drawing a line under the risk the PBoC is running by forcing banks to lend into an extraordinarily uncertain environment.

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Turkish Lira Plunges To Record Low As Coalition Talks Break Down

It appears efforts to form a coalition has failed as local nes report both the AKP and CHP will make separate statements from their party HQs.

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Just As Brazil Hits Rock Bottom, Things Are About To Get Even Worse

For anyone who might have missed it, Brazil is in trouble. "Macro imbalances in Brazil are large, the worst in almost a decade. The fiscal deficit at -8.1% of GDP is also at its widest in more than 20 years, with the combined twin deficits now tracking at a disquieting 12.5% of GDP. Brazil stands at a crossroads – both roads involve currency depreciation."

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"We Have A Civil War": Inside Turkey's Descent Into Political, Social, And Economic Chaos

"There's a saying, 'if there's peace, it will start from Cizre, and if there's war, it will start from here as well.' And we can say we have a civil war in Turkey."

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