CDS

CDS

Activist Hedge Fund Starboard, Expert On Salt Content Of Pasta Water, Now Wants To Overthrow Yahoo's Board

A year and a half after Starboard proposed that the only thing Oliver Garden needs to attract new clients is to change the salt content of its pasta water, the activist fund has just unleashed a campaign seeking to overthrow the entire board of Yahoo, because the fund which clearly was a nutritional expert in late 2014, now thinks that its 1.7% in YHOO stock hodlings entitle it to the intimate knowledge of just how to "fix" Yahoo. Perhaps, the thinking goes, all it takes for people to start using Yahoo again is a new board?

U.S. Futures Slide, Crude Under $39 As Dollar Rallies For Fifth Day

Following yesterday's dollar spike which, which topped the longest rally in the greenback in one month, the prevailing trade overnight has been more of the same, and in the last session of this holiday shortened week we have seen the USD rise for the fifth consecutive day on concerns the suddenly hawkish Fed (at least as long as the S&P is above 2000) may hike sooner than expected, which in turn has pressured WTI below $39 earlier in the session, and leading to weakness across virtually all global risk assets.

Why Oil Prices Are About To Plunge Again: 31 Million Barrels In Floating Storage Are Coming On Shore

Based on the all-in cost of operating tanker storage (dirty VLCC tanker day rates, financing, transit and transfer loss, insurance and bunkers, Figure 5), the current storage cost is too high relative to the steepness of the Brent forward curve. This means that prices do not justify inventory build, but rather gradual inventory drawdown as existing storage trades are unwound.  Comparing the current level of floating storage (157.3 million barrels) versus that in early February (126.6 million barrels), there may be an additional 31 million barrels of inventory to be drawn down between now and the next inventory trough over the next several months.

Why Crispin Odey's $11 Billion Fund Has 5% Daily Swings: "It's No Longer A Market But A Battlefield"

"By mid-March the fund was rising and falling by over 5% per day. At which point this was no longer an investment market but a battlefield. On the day that Draghi came out with his massive market support operation, the stock markets rose 2.5% and then closed down 1.5% on their lows. Imagine how painful it was to see the markets bounce the next day and celebrate his success. At that point I reduced the short book by a third and the long book by 10%."

Credit Suisse Blames "Worst January Ever" On Rogue Traders; Fires 2,000

When last we checked in on Credit Suisse, the bank had just reported its first annual loss since the financial crisis and the stock had plunged to its lowest level in a quarter century. Things have not gotten better since then. On Wednesday, CEO Tidjane Thiam announced his second restructuring plan in five months. "I will not be a hostage to fortune," Thiam told Bloomberg.

Dollar Winning Streak Continues For Fourth Day Pushing Oil Lower; Futures Flat

Following two days of rangebound moves, where Monday's modest market rebound was undone by the Tuesday just as modest decline (despite the early surge higher on the latest "bullish for stocks" European terrorism), overnight equity action continued to be more of the same, and as of this moment S&P 500 futures were unchanged, while European stocks were modestly higher. But while equities remain surprisingly uneventful despite loud warnings by both JPM and Goldman now that another bout of volatility and equity downside is coming, in FX there has been a substantial change, one which has seen the US dollar rise for a fourth day, the longest winning streak in a month, driven by the latest round of hawkish Fed jawboning courtesy of the Chicago Fed's Charlie Evens yesterday, which in turn has pushed down prices of oil, gold and copper.

The New New 'Deal' - "Markets Are Too Important To Be Left To Investors"

In the same way that FDR had an existential political interest in generating inflation and preventing volatility in the US labor market, so does the US Executive branch today (regardless of what party holds the office) have an existential political interest in generating inflation and preventing volatility in the US capital markets. Transforming Wall Street into a political utility was an afterthought for FDR; today the relative importance of the labor markets and capital markets have completely switched positions. Today, the quote would be "markets are too important to be left to investors."

Valeant CDS Hits Record High As Company Scrambles To Avoid Default

Suddenly, what was until incomprehensible - a Valeant default - appears all too likely: under its loan agreements, Valeant has until March 30 to file audited financial reports. If it fails to do so, it then has 30 days before lenders can demand accelerated repayment. Needless to say, Valeant would be unable to fund such a loan acceleration without rapidly selling off key assets in a liquidation firesale, although there even exist limits on just how many assets Valeant can sell.

This Is What Wall Street Thinks Of China's FX Trading Tax

Last night we reported that the PBoC is now considering a Tobin tax on FX transactions. The follows reports that a series of big name money managers - or, as China calls them “predators,” and “crocodiles” - have placed outsized bets against the yuan. Here's what analysts think of the PBoC's latest move to crush the "speculators."

Egypt Devalues Pound In Bid To Ease Acute Dollar Shortage

In a bid to counter a USD shortage that's choking off economic growth, Egypt has devalued the pound by 13%. The move is the latest in a flurry of efforts to increase dollar liquidty in the banking system and avert being effectively forced into taking an IMF loan.

Central Bank Rally Fizzles: Equity Futures Lower As Attention Turns To "Hawkish Fed" Risk

While Asia was up on China's bad data, and Europe was higher again this morning to catch up for the Friday afternoon US surge, US equity futures may have finally topped off and are now looking at this week's critical data, namely the BOJ's decision tomorrow (where Kuroda is expected to do nothing), and the Fed's decision on Wednesday where a far more "hawkish announcement" than currently priced in by the market, as Goldman warned last night, is likely, in what would put an end to the momentum and "weak balance sheet" rally.

Millennials Are The Deflation Generation

While the world’s central banks struggle with deflation, millennials (those born between 1980 – 2000) are busy creating a world where persistently lower prices will be an economic cornerstone. "The expectation of deflation is already incorporated in millennial psyche, so it doesn’t necessarily delay spending as seen in Japan. We adopt technologies that force deflation. Therefore, in our world, deflation is the mark of a healthy economy."

Which Countries Have The Highest Default Risk: A Global CDS Heatmap

Sweden beats USA and Germany as the least likely to default on its bonds but at the other end of the global sovereign risk spectrum lie two socialist utopias - Venezuela (CDS just shy of 6000bps) and Greece (CDS around 1800bps) are the nations most likely to default.

Which States Rely Most On Federal Spending?

The state most reliant on federal spending is Mississippi where federal spending is equal to 32% of the state's GDP, and the current central banking regime perpetuates the current imbalance between net tax payer states and net tax receiver states by making it more difficult for poorer parts of the country to accumulate wealth and increase productivity.

Furious Rally Fizzles Overnight As Futures Follow Oil Lower

Following yesterday's torrid 2.4% March opening rally, which resulted in the biggest S&P gain since January and the best first day of March in history on what was initially seen as very bad news, and then reinterpreted as great news, overnight futures have taken a breather, and erased a modest overnight continuation rally to track the price of oil lower.