Posts Tagged ‘CDS’

Notes From Underground: OIL–A CONJECTURE

March 21, 2012

Before I take a few days hiatus (well deserved) and with the world in a more “serene” state, it is a good time to contemplate the recent news out of the GULF REGION. In a story in yesterday’s Financial Times, “Saudis battle to calm oil fears,” it seems that the Saudis have consigned¬†11 VLCCS to send a total of TWENTY-TWO MILLION BARRELS of crude to the U.S. This is an interesting development as high U.S. gas prices are seen to be an issue in the upcoming presidential election.

(more…)

Notes From Underground: IN”LTRO” FERTILIZATION

February 27, 2012

Okay, the German Lower House of Parliament approved the funding for the Greece bailout, though Chancellor Merkel had to reach “across the aisle” to secure the necessary majority as some members of her coalition abstained or voted no. This is certainly no major surprise. Now the focus will return to Wednesday’s LONG TERM REFINANCING OPERATION (LTRO) and see how large the uptake will be from European banks and how much the ECB may try to cram into the system. The Geithner/Schauble squabble over IMF funding may give DRAGHI the edge he needs to push a larger LIQUIDITY ADD THAN THE 470 BILLION EUROS reported last Friday in a BLOOMBERG article.

(more…)

Notes From Underground: Charles Dallara, Send In the Eunuchs to Prevent Getting Screwed

January 22, 2012

As the tragedy/comedy of negotiations over the private sector involvement (PSI) in any form of debt relief for Greece continues, it is important to remember that the Institute of International Finance (IIF) has no real leverage in the situation and is merely trying to attain some type of outcome better than the supposed 90% haircut. The IIF represents the interests of large and medium banks as it seeks a compromise that is “fair” to all parties. Let’s remember that while the large banks are pressing for a better deal, many of them are being bailed out by the LTRO program put in place by the ECB.

(more…)

Notes From Underground: Europe Steals A Page From Alan Greenspan

October 27, 2011

It was once reported that Alan Greenspan, the Maestro of solipsistic reasoning, once said, “if you understood what I said, I must have misspoke.” The markets think they understood the basics of the GRAND EUROPEAN PLAN, but after reading through the many releases, I am not sure how the bail concoction actually will be deployed. (more…)

Notes From Underground: The CHINESE ARE THE RUMOR DE JOUR TO BUY EFSF DEBT

October 26, 2011

(AN HOUR LATER THE MARKETS WILL BE HUNGRY FOR MORE RUMORS)

Another day and another round of rumors. As the financial markets awaited the EU LEADERS’ statement, the rumor of China agreeing to buy European SOVEREIGN DEBT and EFSF paper provided a boost to a falling EURO and a BID TO the U.S. EQUITY MARKETS. It seems that the market wants to BELIEVE that the Chinese are going to ride to the rescue of the EU and provide the backstop that the Germans are so reticent to bankroll.

(more…)

Notes From Underground: The Good, the Bad and the Ugly (or Another Spaghetti Western)

July 12, 2011

It is very difficult to find the GOOD in the global financial world, while the BAD and UGLY abound. The GOOD could be “found ” in low interest rates on BONDS and NOTES in the U.S. Yet when you scratch below the surface, the fundamental reason for a 3% 10-YEAR NOTE is nothing to crow about. Poor employment data and the fear of a credit crisis in EUROPE is forcing investors to find shelter in the debt instruments of the U.S., even as the Washington budget circus captures the headlines. The subtext of the GOOD is that the EUROPEAN DEBT DRAMA almost cratered the global equity markets but support was found for the EQUITIES and ITALIAN BONDS when the ECB purportedly intervened in the DEBT markets by buying Italian and Spanish debt.

(more…)

Notes From Underground: WAS BERNANKE HAWKING A HAWKISH OUTLOOK???

June 22, 2011

I feel like I’m the odd analyst out in that Bernanke failed to impress upon me that he is a DOVE in HAWKS’ feathers. Reading the FOMC statement over and over leaves me wondering just what made the statement so strong an anti-inflation stance. The FOMC release reiterated that the FED is relying on closing the output gaps, “including low rates of resource utilization and a subdued outlook for inflation over the medium run–are likely to warrant exceptionally low levels for the federal funds rate for an extended period.” This is not the musings of an inflation HAWK.

(more…)

Notes From Underground: Trichet, Juncker, Papandreou, Sarkozy and Merkel Provide the Dance of the Seven Veils

June 20, 2011

Another weekend full of “surprises” as the EU tried to entrance the markets with the slow dance of default/reprofiling/insolvency/bailouts/bail-ins/austerity budgets and of course a voluntary agreement to reschedule the duration of the debt of the PIIGS. No matter if you put a veil on it: a PIG is a PIG. The language of the Eurocrats is so convoluted that every press release creates more confusion rather than offering any type of clarification of how the financial support mechanism is to provide support in real terms. In seems that the Brussels Eurocrats are mainly concerned about the banks and how much exposure they have to a Greek default. A major credit event in Greece will cause the other PERIPHERALS to consider the possibility of a “default” in response to a major solvency action by the Greek authorities.

(more…)

Notes From Underground: Greece shakes; Spain rattles; and German Government threatens to Roll

June 14, 2010

Get the air sick bags as we are back in Europe and it truly is ad nauseam. The equity markets were poised for risk when mid-day news caused the S&Ps to lose its early gains. The markets started to lose its nerve when rumors started swirling that Spain would have to go to the European Funding mechanism. Then Moody’s downgraded Greece’s debt rating four notches to junk status.

(more…)

Notes From Underground: Hazy Global Outlook

May 21, 2010

Yra Harris talks about the markets on CNBC.

Click on the image to watch Yra talk financial reform and sovereign debt markets on CNBC’s “Squawk on the Street.”