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Bank Bailout: Two Sides of The Non-Nationalization Coin
Submitted by Tyler Durden on 01/22/2009 15:06 -0400The drama in U.K. financials this week highlighted the systemic division as to how different governments approach the "bail out" problem absent of an outright nationalization. The current two main options on the table, which Obama's administration will have to pick and choose from unless he decides to nationalize Citi, BofA, and others outright, are the "aggregator bank" and the "bad bank" models, as seen in the U.K. and in Switzerland, respectively.
Swiss National Bank (SNB) Model
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Midday Trip to Bryant Park One
Submitted by Tyler Durden on 01/22/2009 21:45 -0400As we were bored and there is only so much you can stare at MC Cabrera's.... face, we decided to investigate if the rumors of a mass exodus at Bank of Financial Lynch were true. We happened to pass by 133 East 64th and sure enough things seemed like an ordinary Thursday at Bernies.
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Bank of Countrywide Lynch Layoff Update
Submitted by Tyler Durden on 01/23/2009 15:20 -0400Yesterday all of the F/X research desk
Today virtually all the F/X sales and traders
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Standard 'N Poor in Full Downgrade Mode: Jefferies and Whirlpool Now
Submitted by Tyler Durden on 01/20/2009 22:07 -0400Whirlpool debt downgraded to BBB- from BBB, while Jefferies goes to BBB from BBB+. S'n'P now only 10 steps behind the back of the bus.
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Hedge Fund Secondary Market Update
Submitted by Tyler Durden on 01/21/2009 05:01 -0400Today's vomitfest in the markets apparently was greeted by holders of HF LP interests with a sense of utmost urgency/capitulation. In a nutshell - not a single bid, and over $150 million in ask interest just on Feb. 21. Among the more notable parties on the selling block:
SAC Multi Strat - $15 mm
Eton Park - $7 mm
Atticus - $20 mm
Pershing Square - $20 mm
Conatus - $20 mm
Wexford (Spectrum and Catalyst) - $30 mm
If anyone has color as to where these clear we would be very interested.
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Dollar to Ruble F/X Rate About to Go Parabolic
Submitted by Tyler Durden on 01/21/2009 19:15 -0400
In a move geared to stop the daily drainage of its currency reserve, Russia is considering "dirty-floating" the ruble. While we are not sure what dirty floating is, but sure like the sound of it, we assume the impact on the ruble will be to send it plummeting.
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In Ironic Twist, U.S. Taxpayers Are Approaching Net Debt-Free Status
Submitted by Tyler Durden on 01/22/2009 15:33 -0400BofA estimates that the U.S. Treasury and Federal Reserve combined, now are responsible for directly supporting about 70% of the banking system liabilities and 20% of shareholders' equity. Presuming there is virtually no equity value in U.S. banking, which would of course be the case without systemic support, then liabilities equal assets. In that case, in a government mediated vicious circle, U.S. taxpayers have indirectly paid off 70% of the loans that the US banking system has underwritten to U.S. taxpayers...
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Midday Trip to Bryant Park One
Submitted by Tyler Durden on 01/22/2009 21:45 -0400As we were bored and there is only so much you can stare at MC Cabrera's.... face, we decided to investigate if the rumors of a mass exodus at Bank of Financial Lynch were true. We happened to pass by 133 East 64th and sure enough things seemed like an ordinary Thursday at Bernies.
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Overview Of Implied Default Rates and Probabilities
Submitted by Tyler Durden on 01/23/2009 15:30 -0400It is always entertaining to listen to Mark "Hogan's Bottom" Haines speculate about implied defaults, recoveries and what not... So we decided to dispel some ambiguity and speculation by presenting a brief overview of what the implied bankruptcy rate is, at least mathematically.
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Market in Full Meltdown Mode; IBM Has Head in Sand
Submitted by Tyler Durden on 01/20/2009 22:11 -0400
Financials all over the world received the Friend-O treatment today....repeatedly. XLF financial index hits all time low.
IBM which announced better than expected results after the close, says "confident about 2009", and gives 2009 EPS guidance of $9.20 above consensus $8.75... good luck with that guys.
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January 21 Early Headlines
Submitted by Tyler Durden on 01/21/2009 15:10 -0400- Citigroup and Bank of America "surge more than 4 percent" (Bloomberg)
- Foreigners buying up newspapers: first Slim-NYT, now Lebedev-Evening Standard (Moscow Times)
- Fiat catches Chrysler virus, drops to 24-year low (Bloomberg)
- American Airlines posts $69 million loss (
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Dollar to Ruble F/X Rate About to Go Parabolic
Submitted by Tyler Durden on 01/21/2009 19:15 -0400
In a move geared to stop the daily drainage of its currency reserve, Russia is considering "dirty-floating" the ruble. While we are not sure what dirty floating is, but sure like the sound of it, we assume the impact on the ruble will be to send it plummeting.
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In Ironic Twist, U.S. Taxpayers Are Approaching Net Debt-Free Status
Submitted by Tyler Durden on 01/22/2009 15:33 -0400BofA estimates that the U.S. Treasury and Federal Reserve combined, now are responsible for directly supporting about 70% of the banking system liabilities and 20% of shareholders' equity. Presuming there is virtually no equity value in U.S. banking, which would of course be the case without systemic support, then liabilities equal assets. In that case, in a government mediated vicious circle, U.S. taxpayers have indirectly paid off 70% of the loans that the US banking system has underwritten to U.S. taxpayers...
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GOOG Beats Estimates At First Glance
Submitted by Tyler Durden on 01/22/2009 22:01 -0400$5.10 4Q EPS vs. $4.96 consensus.
More as our fingers unfreeze and we can type
Seems all is well.. They just need to not hire any more people...ever
Also about 85% of employees have stock options under water... Sergei and Larry? Not so much
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Greatwide Logistics To Be Acquired by DE Shaw, Centerbridge
Submitted by Tyler Durden on 01/23/2009 16:06 -0400In a recent press release, insolvent trucking company Greatwide Logistics, announced that it was "sold" to an investor group consisting of DE Shaw and Centerbridge. While no cash changed hands, the two Hedge Funds have agreed to a debt for equity swap: the company's total debt would be reduced by 77% from $620 million to $140 million.
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