• Steve H. Hanke
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    Authored by Steve H. Hanke of The Johns Hopkins University. Follow him on Twitter @Steve_Hanke. A few weeks ago, the Monetary Authority of Singapore (MAS) sprang a surprise. It announced that a...

Jump Risk Jumps After American Bankruptcy, Sends Junk Plunging As Major Debt Refi Cliff Approaches

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Wed, 12/07/2011 - 15:44 | 1955787 Tsar Pointless
Tsar Pointless's picture

Might as well jump. Go ahead - jump. Forget it and jump. Go ahead - jump.
With apologies to those who hate the David Lee Roth flavor of Van Halen

Wed, 12/07/2011 - 18:40 | 1956572 TheFourthStooge-ing
TheFourthStooge-ing's picture

There's always the Aztec Camera version:

http://www.youtube.com/watch?v=lkE4EIb_3y8

 

Thu, 12/08/2011 - 04:15 | 1957630 Ted K
Ted K's picture

How much did Aztec Cams pay Hagar for that??? That's better than his usual version.

Thu, 12/08/2011 - 04:08 | 1957623 Ted K
Ted K's picture

Don't be ragging on Diamond Dave.  He's the only one at the concerts who acts like he gives a shit about fans.  A guitarist who looks drunk, a bass player who stands on stage like he's waiting for movie tickets as he fingersyncs to Michael Anthony, and a drummer past his prime.  Dave "brings it" at least. And Diamond Dave doesn't LIE to fans like Eddie "I'm so insecure I bully this band like a 12 year old starting a band in my garage" Van Halen does.  Michael Anthony lasted in that band because he was willing to be shit on on a daily basis.  Dave NEVER played that game.

Wed, 12/07/2011 - 15:45 | 1955788 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Your shit is junk, bitchez!

Wed, 12/07/2011 - 15:46 | 1955790 distopiandreamboy
distopiandreamboy's picture

Air France flight 447 is cleared for take off

Wed, 12/07/2011 - 15:47 | 1955793 Sophist Economicus
Sophist Economicus's picture

See RISK jump.   Jump RISK jump.   Jump, Jump, Jump...

Wed, 12/07/2011 - 15:52 | 1955803 SheepDog-One
SheepDog-One's picture

Jump risk jumps on junk...may as well JUMP! Sure wish we could see some bankers jumping out of windows on Wall St.

Wed, 12/07/2011 - 16:28 | 1955957 CPL
CPL's picture

Jump fuckers!!!  JUMP!!!

 

What a retarded market day.

Wed, 12/07/2011 - 16:05 | 1955804 Captain Benny
Captain Benny's picture

And it's gone.  It's all gone!

Jump you mother fuckers.  Jump.

 

Its an all out run for cash right now and I'm laughing my ass off.  Better get the deer pic ready, the market is about to have a flash crash incident.

Wed, 12/07/2011 - 15:53 | 1955814 SheepDog-One
SheepDog-One's picture

Bad news? Who fell asleep at the editors desk? We're SUPPOSED to be having a wild Santa rally!

Wed, 12/07/2011 - 17:56 | 1956413 Smiddywesson
Smiddywesson's picture

I am guilty of calling that rally, but it looks like the market's been naughty, not nice.

Wed, 12/07/2011 - 18:55 | 1956614 TheFourthStooge-ing
TheFourthStooge-ing's picture

Wild Santa rally?

Ho Ho Ho!!

 

Wed, 12/07/2011 - 15:58 | 1955834 Xkwisetly Paneful
Xkwisetly Paneful's picture

California's and Illinois' state debt is junk quality. It ain't going to take much in higher rates to push them off a cliff.

Wed, 12/07/2011 - 15:59 | 1955839 Caviar Emptor
Caviar Emptor's picture

No! My Empire of Junk : It's Melting!!!

Wed, 12/07/2011 - 16:01 | 1955849 Caviar Emptor
Caviar Emptor's picture

When junk turned to junk, then to gold and back to junk again: a history of the LBO-driven false prosperity that left America with, well, junk

Wed, 12/07/2011 - 19:09 | 1956640 TheFourthStooge-ing
TheFourthStooge-ing's picture

Whaddaya expect when dealing with junkies?

 

Wed, 12/07/2011 - 16:04 | 1955863 way-out-west
way-out-west's picture

All those banks can just jump on my junk...

Wed, 12/07/2011 - 16:07 | 1955877 firstdivision
firstdivision's picture

Wow!  2016 looks like a long shot at even being remotely covered.  Ben better fire up the printing press to bring down the cost of paying that outstanding debt.

Wed, 12/07/2011 - 16:07 | 1955878 earleflorida
earleflorida's picture

a chinese junk just left the harbor,... report is, several coolies jumped ship -  drowning at sea

Wed, 12/07/2011 - 16:14 | 1955904 muhuca
muhuca's picture

Chart doesnt match article.  The article talks about the HY market, chart is a picture of leveraged loan maturity wall.

Wed, 12/07/2011 - 16:16 | 1955911 MFL8240
MFL8240's picture

Goldman Scahs posted list of 2012 investments includes High Yield Bonds, which put another way are junk bonds.  They CANNOT be trusted on anything.

Wed, 12/07/2011 - 16:20 | 1955923 death_to_fed_tyranny
death_to_fed_tyranny's picture

This Fucking Ponzi is unravelling. All the printing cannot stop the inevitable plunge. The nexus is right here. Right now. Let it crash!

Wed, 12/07/2011 - 16:22 | 1955930 ghostfaceinvestah
ghostfaceinvestah's picture

How is it a suprise that RDN (or MTG for that matter) are going to default?

Wed, 12/07/2011 - 16:23 | 1955935 Dr. Engali
Dr. Engali's picture

I have never been able to understand how an airline can continue to come to the capital markets and raise money. Who invests in this crap? Somebody who needs a guarranteed tax loss ?

Wed, 12/07/2011 - 17:30 | 1956327 Hippocratic Oaf
Hippocratic Oaf's picture

Depends on timing. Do you think AMR JFK's 5.40's of '20 will come back at some point before 2020? They're trading at 20 cents on the dollar.

Gate receipt bonds, same name 8's of '12 trading at 90.00 

This is the pattern that airlines have taken for years. If you own it at par and dump the fuck at 20.....you're fault. Buy at 20 and see it go higher......who's the fool?

Airlines can always raise money, just at higher rates and, get ready..........buy side investors that invest in crap!

 

Wed, 12/07/2011 - 16:29 | 1955961 Gidas19
Gidas19's picture

when is AMR going to trade on pinks?

Wed, 12/07/2011 - 16:37 | 1955985 non_anon
non_anon's picture

ha ha, suckers!

Wed, 12/07/2011 - 16:46 | 1956044 J 457
J 457's picture

Who has the list of HY companies with debt maturity in 2012/13 that might follow in the steps of AMR?

Wed, 12/07/2011 - 17:22 | 1956237 Variance Doc
Variance Doc's picture

This is also known as contagion.  Very sophisticated intensity based default models incorporate contagion as a factor that effects the probability of default.  This is a hot area of research in finance/financial engineering.

It will very interesting to see what future default data (and there will be lots of defaults in the coming years - just due to declining growth!) will challenge the default models.

Also, Tyler states "Until AMR, jump risk was not an issue.", which is complete BS.  Many researchers (including me) have shown, both theroretically and empirically, the contagion or "jump risk" has always been present in modern finance.

Wed, 12/07/2011 - 19:10 | 1956642 J 457
J 457's picture

Names please....

Wed, 12/07/2011 - 20:54 | 1956839 Gidas19
Gidas19's picture

Theoretically...

Wed, 12/07/2011 - 17:56 | 1956414 casfoto
casfoto's picture

you can't jump out of the basement....

Wed, 12/07/2011 - 18:04 | 1956453 FranSix
FranSix's picture

Its ironic an airline bankruptcy becomes the black swan that just might very well take down the system.

In the airline industry nobody goes to jail for criminal negligence, despite having exhaustive, expensive forensic investigations after crashes.  Sounds like the banking sector,  no?

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