SunEdison Plummets 40% On "Substantial Bankruptcy Risk" Warning

Just as we warned was likely, the once infamous hedge fund hotel US solar company SunEdison unit TerraForm Global said on Tuesday there was "substantial risk" that SunEdison would soon seek bankruptcy protection  given liquidity difficulties, noting that "such an action would have a material adverse effect” on TerraForm Global. In 2016 alone, SUNE has collapsed from a hope-strewn $6 price to just 73c this morning...

Frontrunning: March 9

  • Angry White Males Propel Donald Trump—and Bernie Sanders (WSJ)
  • Trump Beats Back Attacks and Tightens Hold on Primary Race (BBG)
  • Fed Likely to Stand Pat on Rates, Keep Options Open for April or June (Hilsenrath)
  • Draghi Stimulus Fails in Stock Market as Swings Match 2008 (BBG)
  • Sabine Oil wins pipeline ruling in a blow to pipeline operators (Reuters)

Kuroda's NIRP Backlash - Japanese Interbank Lending Crashes

Not only has the Yen strengthened and stocks collapsed since BoJ's Kuroda descended into NIRP lunacy but, in a dramatic shift that threatens the entire transmission mechanism of negative-rate stimulus, Japanese banks (whether fearing counterparty risk or already over-burdened) have almost entirely stopped lending to one another. Confusion reigns everywhere in Japanese markets with short-term interest-rate swap spreads surging and bond market volatility spiking to 3 year highs (dragging gold with it).

It Was Never About Oil, Part 2: It Was Always Leverage & Volatility

Unfortunately, we remain stuck in the cleanup phase so long as economists and their ability to direct policy continue to suggest the Great Recession was anything other than systemic revelation along these lines; a permanent rift between what was and what can be. It is and was never about oil; only now that oil projects volatility into the dying days of eurodollar leverage.

Frontrunning: February 11

  • Gold Roars to One-Year High as Turmoil Drives Safe Haven Demand (BBG)
  • Banking Stocks Pummeled in Europe (WSJ)
  • Dollar, stocks plunge sparks scramble for safety (Reuters)
  • Nymex Crude Slips Below $27 a Barrel (WSJ)
  • No Respite for S&P 500 as U.S. Stock Futures Join Global Selloff (BBG)

Agency Bond Rigging Probe Expands As Europe Grills Banks On SSA Debt

EU regulators have joined their counterparts in the US and Britain in probing the SSA market where banks may have colluded on price quotes. The big question is whether Deutsche Bank, which is struggling to reassure a nervous market, will find itself in the European Commission's crosshairs.

Germany Shuts Down Canadian Bank Tied To Money Laundering

For the first time since 2012, Bafin - Germany’s banking regulator, which for a minute looked like it might actually accuse Anshu Jain of lying about LIBOR - has closed a bank. All financial transactions by Maple Bank of Canada’s German subsidiary have been halted due to "imminent over indebtedness."

The Mechanics Of NIRP: How The Fed Will Bring Negative Rates To The U.S.

Now that talking about NIRP in the US is no longer anathema but a matter of survival for market participants for whom frontrunning the Fed's policy failure has emerged as a prerequisite trade, the question is: what are the mechanics of NIRP, what are the implications of negative rates for US markets. Here is the handy answer