I’m Pete and I’m Long. It’s been 36 days since I was long.
I have been very bearish. I fought some strong moves up. I argued why certain things wouldn’t work – and by certain things, I mean everything the politicians out of Europe said. I’m not planning on being long for long. On the other hand, rarely have the technicians been so right. They all have said […]
Curve Flattening In Credit – Never a Good Sign
The credit markets here are actually deteriorating and are showing signs that there is growing default concern, rather than just pressure to reduce risk. The red line is the ratio of BAC 5yr CDS vs 3yr CDS. It was the first curve to flatten. The dark blue line is the European XOVER index. As European […]
Once Again the Battle for 1,120 on SPX is raging…
The bulls are all pointing out that we are near the bottom of the trading range, that 1,120 has held multiple times and the economic data isn’t so horrible. The bears on the other hand can point to a myriad of problems that have the combination of not having been resolved, but too many investors […]
Morgan Stanley CDS – Is China Part of the Problem?
The move in Morgan Stanley CDS has been grabbing some attention. It has moved wider than any of the other banks. Its exposure to French banks in particular has been part of the reason. Potential hedging of counterparty exposure has also been listed as a reason. (Once again I can’t help but wonder why derivatives […]
High Yield – Pricing in a Recession, Liquidity Crunch, or Both?
The key macro driver this week has been the plan to plan a “Grand Plan”. While the market has been focused on this big headline grabbing news, something is happening in the High Yield market that is worth watching. The bottom end of the market is falling apart and this is during a period of […]
The Lehman “Moment”
Lately it is hard to avoid talk about the Lehman “Moment”. It almost makes you think that the world fell apart the weekend Lehman filed for bankruptcy protection. But that’s not the case at all. Stocks sold off that first day, bounced the second, had another sell off, but by the Thursday, they actually closed […]
Reaching For Yield And Clubbing Baby Seals
With Greece “solved” and economic data topping expectations, we are back in full risk on mode. Once again the quest for yield is on every fixed income investor’s mind. “Reaching for yield” is a term used when investors make an investment based on wanting more current income. It may be a subtle difference, but the […]
