Headlines that Dexia will be nationalized – Belgium Update
I swear no one from Moody’s is on the distribution list, but they just got put on -ve watch by Moody’s. Seems like they mentioned, tough to get funding for weaker countries already, economic conditions deteriorating, making that problem more pronounced, and “uncertainty around the impact on the already pressured balance sheet of the government […]
MS CDS – The Saga Continues
Today, the CDS market is highly efficient. It is both liquid and ringing with endorsement for Morgan Stanley. It is clear that the credit analysts, who once again are good predictors of the future, have done their homework and decided that Morgan Stanley is safe. Without a doubt some of the concerns are being addressed. […]
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 […]