12/5/08 Antidote du Jour Posted on December 5, 2008 by Yves Smith Post navigation ← 12/4/08 Antidote du Jour 12/6/08 Antidote du Jour → Subscribe to Post Comments 27 comments ndk December 5, 2008 at 12:21 am 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. tyaresun December 5, 2008 at 1:13 am Paulson turns into a cuddly Panda as he prepares to meet Chinese officials. tenletters December 5, 2008 at 1:23 am Th comment section here is more informative than most blogs. ndk December 5, 2008 at 1:30 am 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. ndk December 5, 2008 at 1:39 am 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. Kevin Smith December 5, 2008 at 1:54 am 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.) BBC NEWSPanda 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:http://news.bbc.co.uk/go/pr/fr/-/2/hi/asia-pacific/7743748.stm Published: 2008/11/22 14:50:19 GMT © BBC MMVIII locust December 5, 2008 at 2:43 am Must have been an MBA student. Anonymous December 5, 2008 at 4:45 am 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. Richard Kline December 5, 2008 at 7:00 am 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. River December 5, 2008 at 8:20 am 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. River December 5, 2008 at 8:22 am Hmmm, its telling that the Panda, laboring on new alphabet bailout proposals, is sitting very near the exit. M.G. December 5, 2008 at 8:34 am Wow! Kung Fu Panda heading to? That’s US-China Strategic dialogue! Anonymous December 5, 2008 at 8:40 am Is that a real panda or stuffed? :P Silas Barta December 5, 2008 at 9:39 am 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… Anonymous December 5, 2008 at 10:12 am Flying coach, eh? Panda must be headed to Washington for a bailout. mxq December 5, 2008 at 10:21 am China scholar warns of social turmoil as growth slows Bank of England mulls “nuclear option” of cash injection Also via Trimtabs: “Hedge Funds Lose Record $49.8 Billion in October after Losing $37.7 Billion in September. Hedge Fund Redemptions Could Exceed $250 Billion for This Cycle. Since the start of June, the hedge fund industry has shrunk by a stunning $428 billion (25.2% of assets).” mxq December 5, 2008 at 11:24 am Oil’s Slide Set to Leave Dark Trail” The SPR should now be buying like mad. (not at $120) mxq December 5, 2008 at 11:37 am Oil: $40 is the new $10 I agree. The bottom is somewhere between $30 and $40. But as we’ve learned over the past 12 months, never say never to price extremes. S December 5, 2008 at 11:43 am 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. Vienna December 5, 2008 at 12:11 pm http://www.youtube.com/watch?v=BFtv5qe5o3c Andre Rieu Dark Pool December 5, 2008 at 1:45 pm 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 shtove December 5, 2008 at 2:54 pm 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. A fled to Kenya December 5, 2008 at 5:31 pm 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. Glen December 5, 2008 at 6:18 pm 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. Anonymous December 5, 2008 at 7:33 pm Its a Friday, everyone is buying stocks so they can short them on Monday. Anonymous December 5, 2008 at 10:19 pm 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! CheersChris Anonymous December 6, 2008 at 1:51 pm 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. Comments are closed. Tip Jar Please Donate or Subscribe!