Merrill

Merrill

Verizon Launches $49 Billion Largest Bond Deal Ever; Postpones Europe Investor Meetings

Smashing the previous record $17 billion deal from Apple which is doing so badly (in yield and spread terms), Verizon - in order to fund the mega deal with Vodafone - is launching an 8-part $49 billion deal done at what appear reasonable spread levels (though spreads are dramatically wider than a month ago as one would expect for such a releveraging). With the bulk of the deal ($36 billion) maturing 7 years or longer, it would appear that (and desk chatter confirms) demand was relatively high and BofAML also notes that Verizon will now have a huge $69 to $79 billion of index-eligible bonds. This will make Verizon the 4th largest issuer in the US high-grade market index, right up their with Goldman Sachs and Citigroup. Amid all this exuberance though, something odd popped up:

  • *VERIZON POSTPONES EUROPE INVESTOR MEETINGS ABOUT VODAFONE DEAL

Reuters is reporting that with a $101 billion order book already, it appears they had no ned to shop the deal in Europe. Amazing what ZIRP repression will do...

 

Frontrunning: September 11

  • Obama Holds Fire on Syria, Waits on Russia Plan (WSJ)
  • China Shadow Banking Returns as Growth Rebound Adds Risk (Reuters)
  • Not one but two: Greece May Need Two More Aid Packages Says ECB’s Coene (WSJ)
  • BoJ insider warns of need for wage rises (FT) ... as we have been warning since November, and as has not been happening
  • California city backs plan to seize negative equity mortgages (Reuters)
  • Home Depot Is Accused of Shaking Down Suspected Shoplifters (BBG)
  • Most-Connected Man at Deutsche Bank Favors Lightest Touch (BBG)
  • Norway Pledges to Limit Oil Spending (BBG)
  • China Shadow Banking Returns as Growth Rebound Adds Risk (BBG)
  • Gundlach Says Fed Is Mistaken in How It's Ending Easing (BBG)

Frontrunning: September 10

  • Obama Shrinking Second-Term Hastened by Syria Opposition (BBG)
  • Obama says Russian proposal on Syria a potential 'breakthrough' (Reuters)
  • Poll Finds Support Fading for Syria Attack (WSJ)
  • France to Introduce Resolution Aimed at Dismantling Syria's Chemical Arsenal (WSJ)
  • Apple to Unveil IPhones Seeking End to Year of Struggles (BBG)
  • Verizon Plans Largest Debt Sale Ever: Proceeds From Deal, Expected to Raise $20 Billion, Would Fund Venture Buyout (WSJ)
  • Shipping Rates Seen at 2010 High on Record Ore to China (BBG)
  • Ads coming to Twitter: Twitter makes its largest acquisition, a mobile ad company (FT)
  • Houses on fire as fighting erupts in southern Philippines (Reuters)
  • Banks Seen at Risk Five Years After Lehman Collapse (BBG)

Frontrunning: September 9

  • Hedge Funds Cut Back on Fees (WSJ) as we predicted would happen in May
  • Syria's Assad denies chemical weapons use; U.S. presses case for strike (Reuters)
  • Unemployment Falling for Wrong Reason Creates Fed Predicament (BBG)
  • U.S. tapped into networks of Google, Petrobras, others (Reuters)
  • Chinese Zombies Emerging After Years of Solar Subsidies (BBG)
  • Monte Paschi doubles planned capital hike to 2.5 billion euros (Reuters)
  • Loan Size to Be Cut for Fannie, Freddie (WSJ)
  • Japan Growth Revision Opens Door to Sales Tax Rise (FT)
  • Inside the End of the U.S. Bid to Punish Lehman Executives (NYT)
  • Financial Crisis: Lessons of the Rescue, A Drama in Five Acts (WSJ)
  • Time Warner Joins IBM in Health Shift for Retirees (WSJ)
  • Mideast Derails Key Issues in Congress (WSJ)

Frontrunning: September 6

  • Summers Faces Key 'No' Votes if Picked for Fed (WSJ)
  • NYT Editorial Board Says Summers Would Be Wrong Fed Choice (NYT)
  • Russia says it's compiled 100-page report blaming Syrian rebels for a chemical weapons attack (McClatchy)
  • China says Syria crisis can't be resolved with military strike (Reuters)
  • G-20 Faces Growth Threats as Syria Adds to QE Exit Risks (Bloomberg)
  • Apple Supplier Fire Spurs Biggest Chip Price Rise in 3 Years (BBG)
  • U.S. Decided Not to Horse-Trade With Russia on Assad (WSJ)
  • Financial Crisis: For Corporations and Investors, Debt Makes a Comeback (WSJ)
  • Gorman Says Chance of Another Financial Crisis ‘Close to Zero’ (BBG) and in other news, "no risk of a Us downgrade" -  Tim Geithner
  • A Biotech King, Dethroned (NYT)

Frontrunning: September 4

  • Yes: Support Builds in Congress for U.S. Strike Against Syria (WSJ)
  • No: Boehner backs Obama on Syria, but House leaning toward ‘no’ (The Hill)
  • U.S. Congress fight over Syria pits establishment versus upstarts (Reuters)
  • Wednesday humor: Japan’s Abe Says Fukushima Will Be Resolved Before 2020 Olympics (BBG)
  • Bank of Japan to Consider Further Easing if Sales Tax Hike Goes Ahead (Reuters)
  • S&P accuses U.S. Justice Department of filing $5 billion lawsuit against it in "retaliation" for the company's downgrade of America's debt in 2011 (WSJ)
  • German Candidates Spar Over Records (WSJ)
  • Emerging Nations Save $2.9 Trillion Reserves in Rout (BBG)
  • Split Congress Mulls Denial of Military Force Request (BBG)
  • Sharp Fall in Overseas Investment By Chinese Firms (WSJ)
  • Jorge Lemann: He Is...the World's Most Interesting Billionaire (BusinessWeek)
  • Why Amazon Is on a Warehouse Building Spree (BW)

Frontrunning: August 28

  • Merkel Blames SPD’s Schroeder for Letting Greece Into Euro (BBG)
  • U.S. Bank Legal Bills Exceed $100 Billion (BBG)
  • U.K. to Request U.N. Action to Protect Syrians From Chemical Weapons  (WSJ) - and Russia to veto any decision
  • U.N. inspectors in new Syria mission as West prepares to strike (Reuters)
  • Emerging-Market Rout Intensifies on Syria Jitters (WSJ)
  • Rebels Without a Leader Show Limit to U.S. Role in Syria War (BBG)
  • Anger at IRS Powers Tea-Party Comeback (WSJ)
  • China has much at risk but no reach in Middle East (Reuters)
  • 'London Whale' Penalties Put at $500 Million to $600 Million (WSJ)
  • U.S. lawmaker says 'compelling' evidence of Syrian chemical attack (Reuters)

Frontrunning: August 27

  • Opposition figure: major decisions on Syria expected within hours (Al Arabiya)
  • Syria challenges U.S. to "produce the evidence" that Assad regime launched chemical attack (CBS)
  • British PM says world must act on Syria, weighs response (Reuters)
  • U.S. Treasury to Hit Debt Limit in Mid-October (WSJ)
  • U.S. could look beyond U.N. Security Council in any Syria strike (Reuters)
  • Nasdaq, NYSE at odds on outage cause as SEC seeks facts (Reuters)
  • Ackman’s J.C. Penney Sale Ends Failed Saga to Agitate for Change (BBG)
  • Zandi, LaVorgna, Blinder, Rattner all is one con puff piece (BBG)
  • Best Buy Founder Schulze Plans Stock Sale to Diversify Assets (BBG) - "diversify assets" = dump overpriced junk
  • Zero Worship: Credit-Card Firms Compete With No-Interest Transfers (WSJ)
  • Len Blavatnik wins $50m in JPMorgan lawsuit (FT)
  • Danone Finds Yogurt’s All Greek as Oikos Chases Chobani (BBG)

BATS And DirectEdge To Merge, Terms Not Disclosed

When you add High Frequency Trading exchange 263 and  High Frequency Trading exchange 264 (read all about DirectEdge over the years here), you get a whole lot of happy algos. It also means that MtGox is on its way to becoming the world's most stable exchange. We now expect the market to crash in celebration. We joke, of course, but if anyone trips over the BATS extension cord that sends AAPL under $500 and the NYSE Arca and NASDAQ shutting down again, we take no responsibility. Finally, in continuing the spirit of full transparency and openness of everything HFT-related, the terms of the transaction will not be disclosed.

Frontrunning: August 26

  • Bankers Brace for Fed Wind-Down (WSJ)
  • A Veteran Saudi Power Player Works To Build Support to Topple Assad (WSJ)
  • Gunmen shoot at weapons experts' vehicle in Damascus: U.N (Reuters) - as long as it's not drones
  • ECB Council Members Split in Jackson Hole Over Rate Cuts (BBG)
  • Fed Officials Rebuff Coordination Calls as QE Taper Looms (BBG)
  • As Egyptians Ignore Curfew, Talk of a U.S.-Brotherhood Conspiracy (NYT)
  • Pipeline-Capacity Squeeze Reroutes Crude Oil (WSJ)
  • Lawmakers Probe Willful Abuses of Power by NSA Analysts (BBG)
  • Indictments Expected in Alleged Trading Code Theft (WSJ)
  • India’s ONGC takes Africa gasfield stake (FT)
  • Capital Flight Drains Reserves as Rupee, Rupiah Fall (BBG)
  • Banks scale back rates business (FT)

Frontrunning: August 23

  • Lew warns Congress to strike debt ceiling deal (FT)
  • Central-Bank Moves Blur the View (WSJ)
  • Brazil, Indonesia launch measures to shore up their currencies (FT)
  • More mainstream media reminded about Fukushima - Radioactive ground water under Fukushima nears sea (AP)
  • Fukushima inspectors 'careless', Japan agency says, as nuclear crisis grows (Reuters)
  • New York Banker Arrested on Rape Charges in East Hampton (NYT)
  • This time they mean business, for real: CFTC Moves to Rein In High-Speed Traders (WSJ)
  • Britain operates secret monitoring station in Middle East (Reuters)
  • Moody’s considers downgrading top US banks (FT)
  • China's Bo calls wife mad after she testifies against him (Reuters)
  • JPMorgan Sub-New Normal Growth Seen Vexing Next Fed Chief (BBG)
  • SEC calls for cooling-off period for more staff (Reuters)

Frontrunning: August 21

  • Obamacare, tepid U.S. growth fuel part-time hiring (Reuters)
  • Cameron was behind UK attempt to halt Snowden reports (Reuters), Britain defends detention of journalist's partner (Reuters)
  • Goldman Options Error Shows Peril Persists One Year After Knight (BBG)
  • China expresses 'shock' as Japan's nuclear crisis deepens  (Reuters)
  • Inquiry into China insurance firm rattles industry (Caixin)
  • Cheaper rivals eat into Apple’s China tablet share (FT)
  • Exporting fast food: Subway Targets Europe With as Many as 1,000 New Outlets in 2014 (BBG)
  • Reserve Bank of India boosts liquidity to ease pressure on banks (FT)
  • Justice Department Plans New Crisis-Related Cases (WSJ) - Holder doing his cutest attempt to pretend the TBTProsecute aren't
  • Syrian Opposition Alleges Gas Attack, Which Government Denies (WSJ)

Guest Post: What Is Going To Happen If Interest Rates Continue To Rise Rapidly?

If you want to track how close we are to the next financial collapse, there is one number that you need to be watching above all others.  The number that we are talking about is the yield on 10 year U.S. Treasuries, because it affects thousands of other interest rates in our financial system.  When the yield on 10 year U.S. Treasuries goes up, that is bad for the U.S. economy because it pushes long-term interest rates up.  When interest rates rise, it constricts the flow of credit, and a healthy flow of credit is absolutely essential to the debt-based system that we live in. 

Frontrunning: August 16

  • Critics Decry Risks Posed by Link Between China's Banks and Bonds (WSJ)
  • U.S. retailers say uneven recovery keeps consumers cautious (Reuters) - er, what recovery?
  • Easy Credit Dries Up, Choking Growth in China (NYT)
  • Fed's Bullard Floats Idea of Small Cuts to Bond Buying (WSJ)
  • EU wants one definition of bad loans for bank tests (Reuters) - because in Europe they can't even agree what an NPL is...
  • Nagasaki Bomb Maker Offers Lessons for Fukushima Cleanup (BBG)
  • With Gmail Overhaul, Not All Mail Is Equal (WSJ)
  • Snowden downloaded NSA secrets while working for Dell, sources say (Reuters)
  • Apollo co-founder buys into New Jersey Devils (FT)
  • Republicans to vote on debate boycott because of Clinton programs (Reuters)
  • J.C. Penney Heads for Ninth Quarter of Plunging Sales (BBG)