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Credit Sanity Check
Once again this morning, credit markets are deteriorating with financials the notable laggards and yet equities in US and Europe are beating to their own 'Birinyi' drum. European sub financials are the worst performers, which makes sense post the Moody's downgrade concerns, but the scale of recovery this week is incredible in terms of equities post Friday rally relative to credit market's perception of reality. At the same time, Italian all-in cost of funding - yields - are near record highs post auction, even if spreads are flat and off the highs.
Stocks are now back to the highs from last week. Corporate (investment grade and high yield/crossover) credit is back to only Wednesday highs but is rolling over and financials are notably weak with Seniors only 20bps off their record wides of last week.
Italian Yields are near their highs while spreads are off their wides - but the latter reflects core contagion and so yields are becoming more critical for risk comparisons.
And while spreads are generally tighter across sovereigns (table below shows spread changes for the day for various maturities), we notice a flattening bias in Spain and France and obvious underperformance of Italy and Portugal.
Charts: Bloomberg
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Oh, so a bit more of the full retard for today then.
I think the technical term you are looking for is Batshit crazy.
This Herman Cain guy is everything I thought he could be.
Home of the Whopper...
Herman "Horn Dog" Cain. Classic!
Yes I am sure you are correct. A whore hopper like Cain can not be the Republican nominee.
Maybe he should consider switching to the D party. They would elect him President and let him screw and rape his way through history.
He should not be the nominee because he is clueless. I hold no double standard (and I don't vote democrat). I'm just a sucker for an irresistible nickname...
agreed. and he's taking votes from Dr. Paul (or at least I doubt those votes will flow to Romney -- Cain fans are simply the anti-establishment crowd looking for a home)! And yes, i know Ron has been in Congress forever, but his voting record is consistantly pro-liberty (and therefore anti-establishment).
Equities will come back in line today or tomorrow. Yesterday's rally was not unexpected by some, and there may be a little more upside this morning, but I don't think it will last. New yearly lows before the end of the year. Or not.
Hank Paulson called Timmay Geithner, and told him to spread the word to VIP friends of the New York Branch of the Federal Reserve Non-Bank that equities should price in the CERN-9000 printing press's unveiling soon, on the alleged basis of "saving the neuro", sort of like last time:
How Hank Paulson Gave Hedge Funds Advance Word of Fannie Mae Rescue BusinessWeek - 8 hours agoWow! I'm going to run right out and tell everybody about this Hank Paulson fellow!
Me: Hey, Everybody! Did you know our former Treasury Secretary Hank Paulson lied about the health of Fannie Mae and helped hedge fund insiders profit from its being taken into government conservatorship?
Everybody: Wha? We're sorry - there is another blonde white woman missing in Aruba. We're quite concerned and cannot be bothered by anything else, as we are already juggling this woman's disappearance with Christmas shopping duties.
Well, I tried.
Eventually, the bearish credit trade is going to be unwound with a vengeance.
Sov debt CDS spreads are like silver at $45, on its way to $50.
Only a matter of time before it crashes.
You'd better hope for a miracle, for your mom's sake, after urging her to pile into GRPN, LNKD & NFLX at their highs.
She'll be living in a box, with no basement for you to occupy, soon...
Credit, generally is the sane cousin to equities.
Shit, I thought I cold make it to be the first one to neg RoboTard and I couldn't do it.
Silver on its way to $10,000,000,000/oz ;-)
Speaking of silver, if you go to stockcharts.com and pull up a chart of AGQ:ZSL (long double silver:short double silver)for the last three years you can see that a theoretical long AGQ/short ZSL went up over 4,000-fold (400,000%).
In other words, if you could have invested 2.5 million in this trade three years ago, it would be worth your 10 billion already.
Greg,
Silver, gold and Oil are the only things in the system with real value across all sectors.
This can't last. Equities have been living in fantasy land. What's going to happen is there's going to be a negative catalyst that makes equities fall hard and fast. When support is broken, LOOK OUT BELOW!
Wouldn't S&P 888 be a wonderful stocking-stuffer gift this Christmas?
8 is the luckiest number for the Chinese.
I think a framed stock certificate from a soon-to-be defunct BOA would be a wonderful gift to put under your tree this year. It's fun for all ages and a collector's item to boot!
Won't go defunct - they'll ban naked short selling before that happens. Now that Uncle Warren has shares and all...
Dude, this can last. It can last for a very long time. They will be doing a sixty minutes on us living in our cars years from now and we will still be saying it can't last. When support is broken we will have long been broken already. In the meantime have a beer and watch some football. It is what it is.
Umm..it can last. Look at the past three years. We just print over the mess.
The broadening formation on the SPY and other indices that started in August is nearing completion. This type of pattern showed up in a lot of stocks just prior to the crash of 1929, and has only rarely been seen since. It indicates severe confusion and uncertainty in the market, and should not be ignored.
The possibility of a big crash in equities is real and becoming more probable all the time. Based on technical analysis the target would be 600-650 for the S&P.
Not trying to be alarmist here. Just trying to relay what the charts and history are telling us.
Prechter is that you?
PPT says otherwise.
Nah, that Eliot Wave stuff is crap to me. This analysis is straight out of Edwards and Magee. Here is an explanation if you care.
http://web.streetauthority.com/terms/b/broadeningtop.asp
PPT might have brought knives to a gunfight this time around.
Agreed, the bearish credit trade is going to be unwound with a vengence, and I am sure you would agree that when that happens the currencies really come under pressure and thats the next true big leg up in metals.
Sanity now! Sanity now!
All in all with OTC market at 700Trn, there is enough Theta to gain in a trading range market.
And the housing market just took another dump. American in bankruptcy. No big deal, buy the dip.
And what is a few basis points rise between friendly countries. Move along.
OT: Finnish opposition raising questions abt the europonzi, government faces no-confidence vote.
Nov. 29 (Bloomberg) -- Finnish Prime Minister Jyrki Katainen is being told to spell out the risks to taxpayers of supporting continued European rescue efforts as his government faces a confidence vote called by parliament’s euro skeptics.
Finland’s biggest opposition party, “The Finns,” called a confidence vote against the government today to force Katainen to disclose total liabilities incurred by the AAA rated country because of its involvement in Europe’s rescue mechanism.
“Finnish taxpayers don’t know all the commitments and the price of all the commitments,” Timo Soini, who leads “The Finns” party, said in response to Bloomberg questions in Helsinki today. The government has “every chance,” to fully explain itself, Soini said.
“We want to know what our government’s stance is before”
European leaders meet on Dec. 9, Soini said. The government has
15 days to respond, according to the country’s constitution.
European leaders are struggling to win investor confidence amid rising debt yields across the single currency area and after Germany last week failed to sell all bonds in an auction.
Soini, whose anti-bailout campaign helped boost his party’s popularity fourfold in April election to become parliament’s third-biggest group, has called for an end to all rescue measures and says Greece should be kicked out of the euro area.
“Those countries and those banks that have caused this crisis should pay for it, not the Finnish taxpayer,” he said.
No-Confidence Vote
The confidence motion will probably be formally read at the parliament’s session tomorrow at 2 p.m. local time. Lawmakers will cast their votes following the government’s response to the motion. The Center Party, Finland’s other opposition group, wasn’t asked to join the motion, Soini said.
Finland’s cabinet is backed by a majority in parliament and the government’s 124 lawmakers must vote to uphold the coalition or face penalties. Lawmakers who fail to comply may be ejected from their party’s parliamentary group, the main forum for their work in the legislature.
Katainen has urged some of the world’s richest emerging economies to support Europe in its efforts to survive its debt crisis.
“Being in the same boat as the world’s biggest economy, the U.S., is no solace,” Katainen said in an e-mailed copy of a speech yesterday. “The boat is leaking and we’re calling out to the emerging economies for help.”
The European Central Bank, which has bought Italian and Spanish bonds since August, failed today to fully offset the extra liquidity created by its purchases, a sign of mounting tensions among euro-area banks.
Bond buying by the Frankfurt-based bank “isn’t safe and sound,” Soini said. “It’s not the ECB’s task to buy the bonds.
My recipe is old and good: those who have ordered the drink, those will pay for the drink, not us.”
And all your PM bulls better hope for a "face ripper" rally in stocks.
Otherwise, your "hard assets" will go into a 2008 crash with everything else.
I had to give you a thumbs up. You irritate me so much I had to give you credit for it.
Ever notice how robo nevers rebutts to any comments on posts. Textbook "hit-n-run" troll tactics due to underpinning lack of debating firepower. It's intellectual and/or factual deficiency on his part.
It's both humorous and trainwreck chilling at the same time. Don't quite know whether to pitty or kick teeth on this saptard known as robo
Robo, your version of reality always makes me smile......
I think we should start tagging these idiot black Friday shoppers like scientists tag an animal to track it. Maybe even create a game where you can tackle your own shopper in the wild and tag him/her and watch them remotely from work after you release them.
The Force can have a strong influence on teh weak-minded.
Euro just jumped, what's the latest rumor du jour?
Kim Jong-Illen is on his way to Italy & Spain (and France), with a cargo hold full of gold on board his North Korean Concorde.
More than enough to drive the bots into a feeding frenzy.
Austria downgraded by Hugo Peterssen to AA