Abysmal Liquidity And Other Things To Watch
Liquidity in credit is hitting an all time low, and is yet another warning sign of how fragile this market is. MAIN, the European Investment Grade CDS Index is being quoted with a bid/offer spread of 1.5 to 2 bps. Last week it was still being quoted in 1 bp markets, which although wider than […]
Globally Coordinated Nothing
I can’t get the Amy Winehouse No No No song out of my head. No ECB. No IMF. No Fed. No PSI. No balanced budgets. No QE. Pretty much everything the rally up to and following the summit was based on is falling apart. So far, No downgrades, but I suspect that is one of […]
(BN) *ITALY SAYS NEW 10-YR BENCHMARK BOND FOR SPREAD CALCULATION
Italy says they have discovered flaw with yield calculations. Going forward, all yields calculated on Italian bonds should be adjusted downwards by 50 bps, because it looks so much better. Greece got a lot worse shortly after their finance minister took the time to state that speculators would lose their shirts betting against Greece. This […]
It Is Very Hard To Tell What Is Moving Market
It is very hard to tell what is moving market, but if Fitch changing the outlook from positive to stable on Bulgaria, Czech, Lativa, and Lithuania can push us down 0.5% then if you are long, you need to be putting on some sort of a hedge. I’m not a big fan of puts, and maybe […]
(BN) *FILLON SAYS FRENCH DEFICIT WILL BE 4.5% IN 2012
So when exactly are they getting to the “balanced budget”? This is just a useful reminder how far away they are from delivering on the “compact” they cobbled together on Thursday. A 4.5% deficit in 2012 and 91 day bills issued by EFSF. Like every other summit, the follow up on the vague promises will […]
Greece – No PSI
As expected banks couldn’t agree to a haircut. Now Greece, the EU, the IMF, and taxpayers, will pay out about about $11 billion of principal and interest before the end of the year. I don’t know who holds the bonds maturing this year, but some of that money is probably finding its way into banks […]
EFSF Issues 91-Day Bills
The market popped after the EFSF announced completion of a sale of just under 2 billion euro of 91-day bills. The good news I guess is that it came at the ultra low yield of 0.22%. Why are they doing 91-day bills for EFSF? The point of EFSF is to address the liquidity part of […]
French Downgrade – Even More Likely Than Yesterday
First Moody’s and now Fitch are coming out with negative comments about the summit. That provides mores more air cover for S&P to downgrade France 1 notch. Normally I don’t care that much about ratings (they are a lagging indicator) except when they can create forced selling. I didn’t think cutting the US ratings would […]
Will The US De-Couple? Or Is It Time To Re-Couple?
Maybe, but not in the way everyone seems to think. Haven’t we already decoupled? YTD stock returns in the US are 0% for the S&P and Nasdaq, and the Buffet owned DJIA is actually up 5%. Euro Stoxx 50 is -18% YTD with Germany outperforming and Italy underperforming (it is basically the same performance whether […]
Nothing New To Add To What We Have Already Said
We continue to focus on confirmation that ECB won’t print, which will weigh on the market, and negative rating actions, which could be very bad if France gets hit. The IMF may pull off a surprise if it gets some new non European money, but that hope is also diminishing. Rather than going into more […]