• Tim Knight from...
    02/06/2016 - 00:25
    What we must remember is this: we are in a bear market, and the risk of a countertrend rally is present, but confined. The opportunity on the downside movement dwarfs the risk of a push higher, as...
  • Phoenix Capital...
    02/06/2016 - 10:15
    2008 was caused by derivatives based on consumer-focused assets (houses). The next crisis will be driven by derivatives on government-focused assets (bonds).

ratings

Tyler Durden's picture

The Next Chicago? Houston Faces Pension Crisis In Latest Example Of Local Government Fiscal Folly





“If they end up doing nothing to address this budget issue ... Houston could be facing the same problem Chicago is now."

 
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"No QE For You!": ECB May Cut "Lifeline" To Portugal After Socialists Overthrow Government





In what sounds like the plot of a McCarthy-era propaganda spy novel, the Socialists and Communists have overthrown the government in Portugal. That means it's time for the troika to start pushing back against the undesirables by threatening the country with financial ruin. Just call it "tough love." 

 
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McDowngrade: S&P Cuts 'Releveraging' Junk Food Vendor's Debt To Almost Junk





Having told the world that it will borrow billions (and cut capex) to "return all free cash to investors," it appears ratings agency S&P just needed to remind McDonalds that Shareholder-friendly releveraging no longer comes for free...

*S&P LWRS MCDONALD'S RTG TO 'BBB+' ON SHR BUYBACK PLANS

Who could have seen that coming?

 
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Wholesale Money Markets Are "Perverted" - US Swap Spreads Hit Record Lows





At the height of the financial crisis, the unprecedented decline in swap rates below Treasury yields was seen as an anomaly. The phenomenon is now widespread, as Bloomberg notes, what Fabozzi's bible of swap-pricing calls a "perversion" is now the rule all the way from 30Y to 2Y maturities. As one analyst notes, historical interpretations of this have been destroyed and if the flip to negative spreads persists, it would signal that its roots are in a combination of regulators’ efforts to head off another financial crisis, massive corporate issuance (which we are seeing), China selling pressure (and its impact on repo markets) and "broken" wholesale money-markets.

 
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Frontrunning: November 3





  • S&P 500 Futures Slip as Aussie Gains on Rate Outlook; Oil Rises (BBG)
  • Xi Says China Needs at Least 6.5% Growth in Next Five Years (BBG)
  • Ben Carson Vaults to Lead in Latest Journal/NBC Poll (WSJ)
  • World's Biggest Banks Still Not `Truly Resolvable,' FSB Says (BBG)
  • Keystone XL's builder faced darkening prospects (Reuters)
  • Merkel Says Germany Must Step Up World Role in Refugee Crisis (BBG)
 
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Futures Flat Despite More Weakness Among European Banks, Volkswagen; Another Apple Supplier Warning





So far today's trading session has been a repeat of what happened overnight on Monday, when following a weak start on even more weak Chinese data, US equities soared on the first trading day of the month continuing their blistering surge since that dreadful September payrolls report, which as we showed was mostly catalyzed by a near record bout of short's being squeezed and covering, which accelerated just as the S&P broke the 2100 level.

 
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One Analyst Says China's Banking Sector Is Sitting On A $3 Trillion Neutron Bomb





"While traditional bank loans are not Chu’s prime focus -- she looks at the wider picture, including shadow banking -- she says her work suggests that nonperforming loans may be at 20 percent to 21 percent, or even higher."

 
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S&P Puts Too-Big-To-Fail US Banks On Ratings Downgrade Watch, Blames Fed





Having watched the credit markets grow more and more weary of the major US financials, it should not be total surprise that ratings agency S&P just put all the majors on watch for a rating downgrade:JPMORGAN, BANK OF AMERICA, WELLS FARGO, CITIGROUP, GOLDMAN SACHS, STATE STREET CORP, MORGAN STANLEY MAY BE CUT BY S&P. Despite all the talking heads proclamations on higher rates and net interest margins and 'strongest balance sheets' ever, S&P obviously sees something more worrisome looming. S&P blames The Fed's new resolution regime for its shift, implying "extraordinary support" no longer factored in. This comes just hours after Moody's put Bank of Nova Scotia on review also (blaming the move on concerns over increased risk appetite).

 
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The Power Of Fear & The Gullibility Of The Masses





It was 77 years ago this week that Orson Welles struck terror into the hearts of Americans with his live radio broadcast of the HG Wells classic War of the Worlds. What struck me while watching the PBS retrospective were the similarities between then and now. The gullibility of the masses, the power of fear, the overreaction by the media, busy bodies calling for the government to do something, and the effectiveness of propaganda are all commonalities between that Fourth Turning and today’s Fourth Turning.

 
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S&P Downgrades Saudi Arabia On Slumping Crude, Ballooning Fiscal Deficit





"We expect the Kingdom of Saudi Arabia's general government fiscal deficit will increase to 16% of GDP in 2015, from 1.5% in 2014, primarily reflecting the sharp drop in oil prices. Hydrocarbons account for about 80% of Saudi Arabia's fiscal revenues."

 
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The Demobilization Of The American People & The Spectacle Of Election 2016





The desire to take the American public out of the “of the people, by the people, for the people” business can minimally be traced back to the Vietnam War, to the moment when a citizen’s army began voting with its feet and antiwar sentiment grew to startling proportions not just on the home front, but inside a military in the field.  It was then that the high command began to fear the actual disintegration of the U.S. Army. From that moment on, the urge to demobilize the American people and send them to Disney World would only grow.

 
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Hundreds Of Refugees In Germany "Mysteriously Disappear"; Local Authorities Clueless Where They Are





In the latest, and perhaps most unexpected, twist in Europe's refugee crisis, at least seven hundred of the roughly 4,000 asylum-seekers who had initially been accomodated by the German state of Lower Saxony have "mysteriously disappeared" according to a survey in the Neue Osnabrücker Zeitung (NOZ).

 
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Sweden Warns That Government Debt Can Be Risky... Unless It's Swedish Government Debt





Sweden’s Financial Supervisory Authority wants banks to reconsider the notion that all sovereign debt is risk-free. That said, there's nothing to worry about if the sovereign debt in question is issued by Sweden. And that's a relief if you're the Swedish central bank, because you've been buying a whole lot of Swedish government bonds.

 
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Valeant Hit With Downgrade Warning By S&P Which Sees "Reputational, Legal, And Regulatory Risks"





Moments ago, the BB- rated Valeant debt "story" went from bad to worse, when S&P just revised its outlook to negative citing "Risks To Growth" adding that its "negative rating outlook reflects risks to our base case expectation that Valeant can sustainably grow revenue and EBITDA, given the potential reputational, legal, and regulatory risks the company is facing."

 
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Despite "Bloody" October, Billionaire Hedgie Says "It's A Good Time To Be Short"





After earlier in the year exposing "the greatest shorting opportunity since 2007-2009" and trading it profitably through September with "front row seats to an imminent market shock," Billionaire Crispin Odey's flagshipfund has suffered recently. As Bloomberg reports, the fund plunged 16.8% in the first 16 days of October, after the fund profited in August and September from Odey’s negative view of the Chinese economy. Odey believes that the only way economies will be able to work their way through the next downturn is by writing off capacity. Therefore, with credit tightening as well, according to Odey, it’s a good time to be short...

 
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