More Summit Headlines, More Rallies On The Same Story
Summit going ahead as planned (we already bought the plane tickets and the rooms are booked, and I told the spouse they could come). Follow up summit would be before next weekend (ummmm, the Summit may last a day or two longer than planned, unless we can figure out some other cool location to host […]
Prudence Versus Reckless Abandon
As much as the current round of negotiations are being framed as “France vs Germany” there is more to the story than that. The battle is forming up along the lines of those who are trying to show some restraint and prudence and are willing to deal with the consequences of that decision against those […]
The EU Bans Reporting Of Any Bond Trade Below Par
Now the Europe finally “gets it” they have banned naked CDS buying, they are banning ratings, and have decided the market would trade a lot better if all those pesky below par bond trades went away. You can still trade below par it just can’t be reported. As mentioned at least a month ago – […]
The Morning After…
Sovereign CDS is tighter and SOVX is a lot tighter. I’m not sure by exactly how much as that products is heading the way of EDS’s (equity default swaps) and binary bonds (100% payout after a Credit Event) or TRS on high yield bond indices. Sov CDS will not look like other interventions. Those typically […]
(NYT) France Defends Its Credit Rating After Moody’s Warning
Yes, blame it on speculators and ignore the risks of backstopping billions of weak debt on a leveraged basis. They really don’t get it… Not at all. On the other hand, they did point out that in the dictionary A is above AAA so it should be the same with ratings 🙂 http://www.nytimes.com/2011/10/19/business/global/france-defends-its-credit-rating-after-moodys-warning.html?_r=1&partner=rss&emc=rss
What To Expect Out Of Europe…
I expect we will see a “grand plan” soon. It will have a massive headline number. It will have all sorts of bells and whistles. It will have caveats. The headline program will sound huge. The fact that most of it is self-referencing, writing insurance on yourself, etc., won’t even be important. It will be […]
The Downside Of “Deferred Comp”
GS had a bad quarter, but still accrued some decent compensation costs. This from the one firm on the street that is not only willing to pay ZERO bonuses to those who “earned” it, but who could still retain talent. So why the big compensation accrual? A part is salaries. Salaries have increased, so all […]
(BN) *BANK OF AMERICA REDUCED BALANCE SHEET BY $42B FROM 2Q :BA
This is the single most important line item. Wonder why credit markets feel heavy? Why Primex of all things is weaker? It is not just European banks shrinking balance sheets. It is not just households. It is some US banks as well. You can improve your capital ratio by raising capital. You can also improve it by selling assets. With […]
A Morning Rant – EFSF, Enron, AIG, CDS Clearing
We are still waiting to see the final form of the “Grand Plan” and what novel ways the EFSF guarantees will be applied to save the day. At the risk of sounding incredibly stupid, I have this feeling that Europe didn’t actually work on any details until this past week, and Germany is suddenly realizing […]
Naked in Europe
So Europe is getting closer to announcing some form of ban on naked CDS. What they hope it will accomplish and what it will actually accomplish are two very different things. First, let’s look at the mindset. It about a ban targeted at entities that buy CDS (go short the credit). It doesn’t target those […]
