Headlines that Dexia will be nationalized
It looks like the plan is back to “nationalizing” Dexia. Not sure if it is Belgium or Belgium and France, but looks like that is the strategy. Dexia with 566 billion euro of assets and 155 billion euro of public debt could make things interesting. Belgium, which already has debt of 322 billion vs GDP […]
Rounding Error, Short Squeeze, and Cost of Recap
Job report definitely better than expected, but if 50k comes from the striking Verizon employees coming back to work it is less impressive. Underemployment continues to be weak. It also seems strange that strength in hiring came in services; whereas, employment in the ISM Services report was weak. Anyways, not a bad report, but nothing […]
It’s 3:15, Do You Know Where Your Market Popping Rumor Is?
Maybe I’m wrong but weren’t AIG and FNMA “nationalized”? Neither of those post-nationalization rallies lasted very long and they preceded nasty declines. Once it gets to a stage of something being nationalized the situation is bad and likely still declining, not over and done with. And remember, the global economy and sovereign balance sheets were […]
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 […]