CDS

Latest NYSE Program Trading data out. Program Trading volume continues to decline, with 3.4 billion shares traded, down 700 million from the week before.

Spreads were broadly wider in the US as all the indices deteriorated. Indices typically underperformed single-names (as we note some pre-roll activity is holding single-names in while macro players drive indices wider) with skews widening in general as IG underperformed but narrowed the skew, HVOL underperformed but narrowed the skew, ExHVOL outperformed pushing the skew wider, XO's skew increased as the index outperformed, and HY's skew widened as it underperformed (with rumors of another HY list today trying to take advantage of the large skew).

Spreads were broadly wider in the US as all the indices deteriorated. Indices typically underperformed single-names (as we note some pre-roll activity is holding single-names in while macro players drive indices wider)with skews widening in general as IG underperformed but narrowed the skew, HVOL underperformed but narrowed the skew, ExHVOL outperformed pushing the skew wider, XO's skew increased as the index outperformed, and HY's skew widened as it underperformed.

Spreads were broadly wider in the US as all the indices deteriorated (with HY once again underperforming IG but the latter ending well off its wides of the day).

Even as the equity market tries to pretend that it can still see one or two glimmers of hope despite the resignation of even CNBC from using the green shoots term, and tries even harder to be excited at the prospect of Larry Summers soon taking over as Worldwide Regulation Czar, financial company CDS have blown out wider (both on an absolute and relative basis) over the past month. Oddly, Wells Fargo, which is facing million in foreclosed units, is considered less risky even than than the government's "most favored market maker" and Sigma X deobfuscator Goldman Sachs.

Even as the equity market tries to pretend that it can still see one or two glimmers of hope despite the resignation of even CNBC from using the green shoots term, and tries even harder to be excited at the prospect of Larry Summers soon taking over as Worldwide Regulation Czar, financial company CDS have blown out wider (both on an absolute and relative basis) over the past month. Oddly, Wells Fargo, which is facing million in foreclosed units, is considered less risky even than than the government's "most favored market maker" and Sigma X deobfuscator Goldman Sachs.

After three very volatile weeks, it seems the CDS world tapered off modestly. While action was rather subdued, the bulk of activity was focused on insurance buying, with over $63 billion in net notional being purchased in over 3,400 contracts. Total cumulative CDS action since the beginning of April grew to over $400 billion, and virtually all sectors are now net derisked over the past 2 months, with the consumer leading the risk parade.

With the state a self-disclosed 50 days away from complete financial ruin, it was a matter of time before the "forward" looking rating agencies decided to take some action. Not surprisingly, it was S&P which has decided to splinter itself from the other sycophants, especially in the TALF quad-A re-rating of uber-toxic CRE.

From the negative watch report issued yesterday:

With the state a self-disclosed 50 days away from complete financial ruin, it was a matter of time before the "forward" looking rating agencies decided to take some action. Not surprisingly, it was S&P which has decided to splinter itself from the other sycophants, especially in the TALF quad-A re-rating of uber-toxic CRE.

From the negative watch report issued yesterday:

Spreads were broadly wider in the US as all the indices deteriorated (as IG underperformed HY and made new June wides). Indices generally outperformed intrinsics with skews mostly narrower as IG underperformed but narrowed the skew, HVOL outperformed but widened the skew, ExHVOL intrinsics beat and narrowed the skew, XO's skew increased as the index outperformed, and HY outperformed but narrowed the skew.

Zero Hedge favorite soap opera extraordinaire is about to enter the final season. Porsche, which as we noted in the past doesn't have either the cash to exercise its massively profitable Volkswagen options, nor the cash to actually stave off bankruptcy for long, has bypassed the hedge fund investor rescue route completely (no surprise there) and instead is trying to sell an unknown stake (likely at least 25%) to the Qatar Investment Authority.

Zero Hedge would like to share with readers the latest and greatest from Six Flags, whose bankruptcy seems to have had no impact on corporate-blogger relations:

Hey Tyler ,

I hope this email finds you well…it’s xxxx again with the latest update :)

Spreads were mixed in the US this week with IG worse, HVOL wider, ExHVOL weaker, XO wider, and HY rallying (HY outperformance of IG far greater than XOver compression to Main).

Zero Hedge has always been fascinated by the behemoths of securities lending (or not so much lately) State Street and Bank Of New York: these firms, which allegedly had just marginal toxic exposure, were in the front lines for the TARP bailout and have traditionally been handled with velvet gloves by the administration. In fact, many would say the custodian firms are in a league of importance much higher than even Goldman or JP Morgan as with their repo activity, security lending and cash collateral reinvestment, they are the de facto center of the shadow banking system.

Spreads were mixed in the US with IG worse (seeming to set a 120ish support level), HVOL improving, ExHVOL weaker, XO stronger, and HY rallying (seemed like traders followed intrinsics - selling IG and buying HY as IG is rich and HY cheap to intrinsics).