Following yesterday's bankruptcy of Peabody Energy and today's Chapter 11 filing of XXI Energy, defaults among American junk bonds just topped $14 billion in April, the highest monthly volume in two years according to Fitch calculations, and that is only for the first two weeks. April's surge in bankruptcy filings is not unexpected: according to JPM's default tracker, the number of bankruptcies was on a tear in both the month of March and the first quarter.
"They're pretty bad," said Democratic strategist Brad Bannon, who connected the poor poll numbers to separate findings that show a broad number of Americans don’t trust Clinton. As The Hill reports, only 40.2% of people view Hillary favorably (drastically lower than Obama's 62% at this point in the presidential-cycle and Bush's 63%). As one commentator noted "the political impression that I think she leaves strikes a lot of people as inauthentic, as something they can’t quite trust."
It's not just the shale drillers who are in danger as they see their liquidity evaporate. As the WSJ writes today, and as covered here since January, it is the lenders themselves whose unfunded revolver exposure may suddenly become funded and expose them to even greater risks from the energy sector should oil not rebound far more forcefully and put US oil and gas companies back in the black. How big is the exposure? Very big: $147 billion.
The evidence that Yellen is clueless or a blatant liar is endless. The casino gamblers keep dancing on the edge of a live volcano in the belief that Yellen has their back. In fact, her statements this week prove once again that she is right there on the edge with them - jabbering incoherently. One of these days, even the silicon units in the casino will take notice. The dancing will then turn into diving for the doors.
So Called "Trusted Parties", Bank Collapse, the ECB and Blockchains: Watch as I Call the Next Bear Stearns, Again!Submitted by Reggie Middleton on 04/07/2016 12:20 -0400
I called it once in January 2008 (Bear). I called it 2x in March 2008 (Lehman), and I'm calling it again in 2016. Don't say you didn't know. These proclamations of trust will truly put my analysis - and your capital - to the test.
Earlier today, CNBC's Steve Liesman made two very important, in fact "critical", if about one year overdue, discoveries. The first one was that Americans are angry. The second discovery is that angry Americans largely support Trump over Hillary.
A Hong Kong unit of Guosen Securities is in technical default on a dim sum bond issued in 2014, marking the first offshore default by a Chinese SOE since the collapse of Guangdong International Trust and Investment in 1999. The subsidiary says reports that it has violated a keepweel with its parent are "exaggerated."
On the last day of an extremely volatile first quarter, following the latest torrid push higher in risk assets over the past two days following Yellen's dovish Tuesday comments, today has seen a modest pull back in risk, whether because the market is massively overbought, because someone finally looked at what record multiple expansion that has taken place in Q1 as earnings are set to collapse by nearly 10%, or simply due to fears that tomorrow's payrolls number will show an abnormal amount of minimum wage waiters and bartenders added.
Ripley's believe it or not world continues. Earlier today, Hong Kong's Hang Seng market entered a bull market, rising 20% from its February lows, just as Hong Kong retail sales plunged 20.6%, the bigest drop since 1999 and then moments ago, in a move that pushed the Chinese Yuan stronger at least initially, S&P revised its Chinese outlook to negative, saying the economic rebalancing is likely to proceed more slowly than had expected over next 5 years and warning about China's debt load.
After years of QE (quantitative easing), ZIRP (zero-interest-rate policy), NIRP (negative-interest-rate policy), and Abenomics (Japanese prime minister Shinz? Abe’s stimulus-focused economic policies) – which is to say, all the standard deviations of modern central banking – older Japanese people must now break the law... to get “free board and lodging behind bars.” Is this what is coming to the U.S.? “Yes,” is the safe answer. Japan has been ahead of us on this entire trip.
Dear Mayor Emanuel, it may be about time to get on the phone with Detroit and ask for pointers on how to efficiently navigate the bankruptcy process...
Very simply, if you borrow too much money life gets harder and the things that used to work stop working. For a country, lower interest rates no longer induce businesses and individuals to borrow and spend, and government deficits no longer translate directly into more full-time private sector jobs. Growth slows, voters get mad, politics gets crazy, and generally bad times ensue. The only question is why this is a surprise to the people whose choices brought us to the edge of the abyss.
There's trouble brewing in the leveraged loan market as cracks continue to show in post-crisis CLOs. As we reported late last month, the number of CLO 2.0 deals’ equity tranches currently having NAV below zero has risen to 453. Given that, we weren't terribly surprised to learn that 6 CLO 2.0s are failing their interest diversion tests and another 20 are within a point of hitting their triggers.
Slowly but surely Canadian oil and gas failures are starting to become a daily reality; failures such as that of Canadian junior oil and gas producer Terra Energy Corp which yesterday said it shut down production, ceased operations and announced the resignation of directors and officers on Monday, after its lender, Canadian Western Bank, demanded full repayment of its debt.
When judged against the BoJ, the ECB probably still has a ways to go before hitting the limits of central banker insanity and so, we think it's entirely possible that Draghi moves into HY next. But the reasons to believe the ECB will take the plunge into non-IG corporate credit go beyond the “MOAR is always better” line. As BofAML’s Barnaby Martin explains, the EU corporate sector’s penchant for bond buybacks may ultimately force Draghi further down the ratings ladder lest the ECB should end up entangled in tender offers or else find itself without enough debt to monetize.