Seems a lot like July 2011 again, and watch out for Spain.
Spanish yields are back above Italian bond yields, like they were in July 2011. For both countries, the yields are actually similar to where they were back then. I think the fact that Italy is back to tighter than Spain is meaningful. While Italy is a long way from being fixed, it is clear that their former leader was […]
The T Report: Strength Across Almost All Credit Markets
All the CDS indices are better this morning. IG, MAIN, and SNR FINS are all 2 to 3 bps tighter again today, and even HY17 is participating in the rally and is trading above 99. HY17 has been a laggard, but has been outperforming the HY ETF’s. Both HYG and JNK closed slightly lower yesterday […]
Greek CDS Settlement – 3 Wrongs Do make a Right
One of the central premises of CDS is that the “basis” package should work. An investor should be able to buy a bond, and buy CDS to the same maturity and expect to get paid close to par – either by the bond being repaid at par and the CDS expiring worthless, or through a […]
The T Report: CDS Roll – More Technical Than Meaningful
A relatively quiet morning in credit in spite of the CDS rolls. The “on the run” single name CDS contract changes from March 2017, to June 2017. So every single name 5 year quote will now be for June 20, 2017. A little bit technical for the market, and a lot annoying for most clients. […]
The CDS Auction Process – Not So Scary
First, I believe that the regulators should be forcing CDS to be cleared if not exchange traded. But in any case, there are once again concerns about the “auction” process and what it means. Yes, it is slightly weird to settle a contract based on an “auction” but it is actually both a useful step […]
The T Report: A mixed and dull open
Asia was mixed, with Hong Kong down noticeably, but Chinese markets okay. Europe is pretty much down across the board, with the exception of Spain doing well. US Futures are mixed, with AAPL helping Nasdaq remain positive. On the Credit Side, the story is similar. European corporate are better with XOVER continuing its impressive performance […]
Crude Oil Reserve Emergency Release?
We no longer wait for a rainy day, the hint of rain is enough to spur us into action.
(BN) State-Backed Spanish Bank Securities Deposited at ECB (Table)
State-backed bank securities seems much better than Ponzi, but I prefer Ponzi. Why did the cost to recap Greek banks shoot up in the past 6 months? The cost of the greek bank recap is one of the big reasons the bailout money required has gone up, it is estimated that the amount of new […]
What Do $100 Billion Of Ponzi Bonds Mean?
So Italian banks have issued about $100 billion of these Ponzi bonds and even in this day, that is a big number. Banks issue bonds to themselves. Then they get an Italian government guarantee. Then they take those bonds to the ECB and get money, which I assume they use to pay down other debt […]
Investment Grade Bonds And The Retail Love Affair
Without a doubt, retail has fallen in love with corporate bonds. Fund flows were originally into mutual funds, and have shifted more and more into the ETF’s. The ETF’s are gaining a greater institutional following as well – their daily trading volumes cannot be ignored, and for the high yield space, many hedgers believe it […]
