Is There a “Table Limit”?
Europe is in the midst of doubling down again. In May 2010, Europe was going to save Greece to prevent the “problems” from spreading into Ireland and Portugal. In August 2010, Europe decided to save Ireland, Portugal, and provide more to Greece to stop the problem from spreading. In early 2011, Europe starting buying Italian […]
Is Morgan Stanley’s Biggest Asset Their Debt?
Stocks added to their rally today when Gasparino leaked news that MS was going to have a “solid” quarter and they were going to beat GS. Morgan Stanley has $187 billion of public debt according to Bloomberg. Just eyeballing it, the average maturity looks close to 4 years, but let’s be conservative and assume it […]
S&P Futures, MS CDS and MS Bonds
What do MS CDS and S&P Futures have in common? Everything AND Nothing. MS CDS and ES (E-mini S&P Futures) are clearly correlated. As MS CDS tightens, S&P futures rally, and vice versa. That is pretty clear. They are also the two most talked about things all day long lately. That is where the differences […]
IMF Vows to Spend Some More Taxpayer Money
Markets in Europe opened wish some hesitation about how well the latest bailout would work, but along comes Borges to kick-start the rally. He touched on all the right buttons. He confirmed that EU officials are working on a bank-recapitalization plan. He suggested banks could use 100-200 billion euro. Where they get the money would […]
Here on Earth – Follow Up
Spain has been at over 300bps since July. Already there are City Halls that cannot pay their bills, power companies are threatening to pull the plug on them and Catalonia is pulling out hospital beds to make ends meet (not to mention that they are planning on not paying doctor´s Xmas extra pay). Today 50,000 […]
Here on Earth
Here on Earth, we put mice in a cage and see how often they get shocked before they learn not to reach for the cheese. I wonder if there is some alternate universe where mice shout out “bad bank” and see how many times bankers hit the buy button before realizing there is no such […]
All for One and One for All!
Ignoring the knee-jerk reaction of stocks to rally 4% on the headlines that Dexia will be save and other banks will be recapitalized, it is worth thinking about what this really means and the next logical steps. For now I will not even focus on the fact that this was from a meeting of Finance […]
So much for being long…
Reverting back to short. The sell-off this morning felt overdone, in HYG in particular. We bounced on Bernanke, but it wasn’t with much conviction. Although BAC and MS bounced nicely off their lows, BAC hasn’t been able to get green on the day, although MS has, but barely. With such weak performance from ideal short […]
HYG and JNK – Catching up to reality…
It was just Friday morning that I wrote about high yield and how differently the “professional” market was trading compared to the “retail” market. HY17, the CDS index was trading at 88 at the time. It is trading at 84.5 right now, down 3.5 points. HYG was trading at almost 84, it got as low […]
Europe – Political Fabrications Instead of Economic Realities
The latest EFSF “collateral” package shows once again, just how wrong Europe has it. Dreams of Eurobonds should be relegated to the trash bin. Fantasies that EFSF will leverage itself up to save Europe should be discarded. The latest outcome of EFSF meetings should be enough to let everyone know that even the people with […]
