1. ndk

    China has a fairly realistic take on the prospects for its investments in America, but it’s gradually growing more aggressive, clearly believing America’s woes are of its own creation. CR has a small compendium of posts.

    The Café Américain is not enormously fond of long bonds as a safety trade.

    Protestors hit the auto bailout talks.

    Roubini advocates spreading of “massive liquidity”, but also warns on the U.S. Government’s solvency and the credit risk it’s absorbing. I’ve been frothing about that for awhile.

    Congresswoman hangs up on Obama.

    Zurich is incredibly boring. I bet I’d have the same complaint about Vienna. I certainly have that complaint about Yves’ truancy.

  2. ndk

    Junkbond spreads imply a default rate of 20.9%. In 1933, they implied 15.4%. People who want to be a hero should consider these yields before they jump into any breaches.

    2008 has seen very modest non-financial bankruptcy activity to date.

  3. ndk

    And remember that, if you take issue with these bond prices, their pricing is even more causal than predictive. Regardless of whether or not the default rate should be anything remotely close to 21%, having interest rate spreads of that magnitude will do wonders to make it much closer to 21%.

    Might be part of the explanation of the brilliance of markets.

  4. Kevin Smith

    re: Paulson as cuddly panda

    Cute, yes. Cuddly? Not so much!

    (By the way, one of the 68 capital offences in China is Panda poaching.)

    Panda attacks man in Chinese zoo

    A man has been attacked by a panda at a park in southern China, after he climbed into its enclosure hoping to cuddle the creature.

    The 20-year-old student had ignored warning signs and scaled a two-metre (6.5ft) barrier to get into the pen.

    State media say the panda bit him on his arms and legs, and he had to be rescued by the animal’s keepers.

    Speaking from his hospital bed, the injured man said the panda had looked so cute he had just wanted to hug it.

    The incident happened on Friday at Qixing Park in Guilin, a popular tourist attraction in the southern Guangxi Zhuang Autonomous Region, which houses a small zoo and panda exhibit.

    A worker at the park, quoted by the official Xinhua news agency, said there are clear signs warning visitors not to go beyond the fences for their own safety, “but the young man ignored them”.

    The panda, Yang Yang, was apparently scared by the intruder and bit the man’s arms and legs, he said.

    Two foreign visitors who saw the incident alerted keepers who rushed to the student’s rescue and calmed the panda.

    The man – named only as Liu – was taken to hospital. He underwent an operation and doctors said he would stay in hospital for a few days, although his life was not in danger.

    Liu, who is studying at a university in Guilin, said he had been visiting the park with fellow students.

    “Yang Yang was so cute and I just wanted to cuddle him,” he told Xinhua from his hospital bed.

    “I didn’t expect he would attack… I don’t remember how many bites I got.”

    Yang Yang – whose name means sun – is seven years old and weighs 80kg (176lb). Keepers said he had recovered from the incident and was eating and playing as normal.
    Story from BBC NEWS:

    Published: 2008/11/22 14:50:19 GMT


  5. Anonymous

    AIG announces launch of CDS financing entity

    AIG has announced that a financing entity recently created by the Federal Reserve Bank of New York (FRBNY) and designed to mitigate AIG’s liquidity issues in connection with its credit default swaps and similar derivative instruments (CDS) written on multi-sector collateralised debt obligations (CDOs) has been launched. The new entity, which was announced on November 10, is designed to purchase CDOs on which AIG Financial Products Corp. (AIGFP) has written CDS contracts. To date, the new entity has entered into agreements with AIGFP’s CDS counterparties to purchase approximately $53.5bn principal amount of CDOs. To date, $46.1bn principal amount of such CDOs have been purchased, and the associated notional amount of CDS transactions have been terminated in connection with such purchases.
    AIG has provided $5bn in equity funding, and the FRBNY will provide up to approximately $30bn in senior funding to the financing entity, of which approximately $15.1bn has been funded to effect purchases of CDOs. The entity will collect cash flows from the assets it owns and pay a distribution to AIG for its equity interest once principal and interest owing to the FRBNY on the senior loan have been paid down in full. Upon payment in full of the FRBNY’s senior loan and AIG’s equity interest, all remaining amounts received by the entity will be paid 67% to the FRBNY and 33% to AIG.
    Meanwhile, the insurer is to sell Swiss-based AIG Private Bank Ltd to Abu Dhabi-based Aabar Investments for $253.6m, reports Business Insurance.

  6. Richard Kline

    A fascinating study on how happiness flows through social networks is getting some good press. By John Fowler and Nicolas Christakis, it’s been accepted for publication, but the latter has a public access .pdf up on his own site for those interested: http://christakis.med.harvard.edu/pdfs/095.pdf [someone else might link this up].

    The skinny: Happy people bear you up, so the more of them you know the better for you. A good lesson for These Tryin’ Times, sez I.

    This is a fascinating if complex finding from a longitudinal study. I recommend it as a good read to one and all. Personally, I am completely convinced of the ability of human beings to interact at a distance (to a degree), and that concept squares with this finding, though their results could well have additional or distinct causal inputs. From a separate perspective, this is a very nice piece of study design and analysis.

  7. River

    Obviously a posed photo for an airline ad. In the real world the Panda would at minimum be in first class, or alternatively, aboard it’s own private jet.

  8. River

    Hmmm, its telling that the Panda, laboring on new alphabet bailout proposals, is sitting very near the exit.

  9. Silas Barta

    And in other news, the San Diego Zoo is reconsidering its plan to cut back on animal transportation expenses after it was unable to secure a “bamboo alternative” in-flight meal…

  10. S

    Well here is a shock the special relationship apparently extends to printing money as well.

    And why is Paulson feeling compelled to say that no one coutnry owns enough US debt to be a threat. Is there any doubt that there wikll be some sort of forced investment into US debt (capital controls)

    Note the Bloomberg article yesterday that the US has “reached” and agrreement with Lichtenstein on tax disclosure.

  11. Dark Pool

    I am glad that the congress is grilling the Auto Makers on their plans – too bad no one ever bothered to ask the banksters about transparency – at least we know where to go looking for all that bailout money they are squirreling away.

    ICAP Hires JPMorgan’s Daemon Bear to Head ‘Dark Pool’ (Update1)

    By Nandini Sukumar

    Dec. 5 (Bloomberg) — ICAP Plc, the world’s largest broker of trades between banks, named Daemon Bear to set up and lead an alternative trading system and so-called dark pool for stocks.

    Dark Pool

  12. shtove

    That panda is counting money. I’m sure of it.

    He’s clearly fleeing the US, and the guy sitting next to him is his accountant.

    Has to be Paulson.

  13. A fled to Kenya

    A certain polar bear in Germany was looking for a cuddling buddy. But due to lack of funds, the zoo could not afford a polar of the opposite sex. Bet the drunk Germans ordered a panda instead. All BEARS look alike when u are busy fleecing the economy.

    Hope u get this comment in this bear market.

  14. Glen

    259 point rally given all the bad news, fundamentals are all out of whack and the likely hod that things are going to, somehow, get worse. Wall St needs a reality check. Me thinkth they are hanging onto and running with any bit of vaguely good news.

  15. Anonymous

    Zurich is a great city, but you need to know where to go, like most European cities. If you just walk around like a tourist without some insider knowledge, even Manhattan can be seriously disappointing!


  16. Anonymous

    Ah, seems like the nasty bear metamorphosised into the cute Panda. A safe landing and the seat next can then be occupied by another young MBA financial banker? Or maybe, the banker can occupy both the seats.

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