As the prospects for the economy deteriorate, the cost of default protection on corporate bonds hit a new high. From Bloomberg: The cost of protecting corporate bonds from default surged to records around the world as the prospect of U.S. automakers filing for bankruptcy protection fueled concern of more bank losses and a deeper recession. […]
Read more...Sparrow numbers ‘plummet by 68%’ BBC Researchers getting the lead out of electronics Network World Don’t Throw Me In That Briar Patch! Hilzoy Is Obama really “Change we can believe in?” Ed Harrison Record Options Trading Slows as Hedge Funds Fold, Prices Surge Bloomberg The Dollar Trap Part II: Mutually Assured Financial Destruction Jesse’s Cafe […]
Read more...Asian markets are keying off the ugly day in the US, with deflation fears at the fore and equity markets having broken through the lows of last month, which had been widely touted as support levels. The Nikkei is down 570 points, or nearly 7%.. The Hang Seng is down 5.5%. Mainland Chinese indexes are […]
Read more...Bloomberg tells us that JP Morgan has issued a report that contends that the Federal Reserve will cut its policy rate to zero by early next year. While this may prove to be correct, it certainly isn’t an obvious move. First, most central banks regard getting below 1% short term rates is dangerous territory. ZIRP […]
Read more...We’ve noted from time to time that one of the many reasons this downturn will prove to be exceptionally bad is not just that corporate defaults are likely to equal, if not exceed, past post-war peaks. Two new factors are at work that will hurt junk bond holders. First, many of the recent leveraged buyout […]
Read more...Texas grand jury indicts Cheney, Gonzales of crime Reuters World’s Most Conscientious Customer Completes Botched Software Purchase Over A Year Later [Above And Beyond] Consumerist China moves to stem mass layoffs BBC (hat tip reader Michael) China’s Workers Head Home Jobless The Straits Times (hat tip reader Michael) Naomi Klein: The Borderline Illegal Deals Behind […]
Read more...We have been mystified at the utter silence on behalf of our friendly foreign funding sources at their willingness to be patsies to continue buying Treasuries when the outlook for the dollar is far from rosy. The US’s funding needs are going to escalate sharply due to the need to pay for rescue programs. And […]
Read more...Financial Times columnist Lucy Kellaway once wrote, “No management idea is too ridiculous not to be tried in practice.” That observation may apply to economic ideas as well. Just last week, when discussing economic stimulus programs, I stressed that to be effective, they needed to lead to consumption. If, as with the tax rebates of […]
Read more...September was a world-class bad month in Hedgistan, and it looks as if October has been no kinder. With continued losses at many funds and investors increasingly leery of risk, the thinning of this herd will continue. From Bloomberg: Hedge funds capped their worst two months in at least eight years in October, as global […]
Read more...It’s always a bit dangerous to generalize from one data point, even if if it is a big data point, like Long Beach, one of America’s most active commercial ports. Nevertheless, the New York Times uses it to present a vivid image of the economic, and in particular, trade slowdown. One focus is how imported […]
Read more...Reap what you sow. Over the last 20 years, the ever-aggressive Wall Street culture has moved even further towards prizing, and paying for, individual performance. Even at the famously team oriented Goldman, after the trading side of the firm became the dominant profit engine, top executives would reportedly describe the investment banking side as “socialist” […]
Read more...Colossus of Rhodes to be rebuilt as giant light sculpture Guardian Woolly rhino’s ancient migration BBC Top judge: US and UK acted as ‘vigilantes’ in Iraq invasion Guardian Web Sites That Dig for News Rise as Community Watchdogs New York Times Volcker issues dire warning on slump Telegraph Rents forced down by glut of homes […]
Read more...Full disclosure: I normally do not take notice of insider trading suits, even when big names are involved. I long thought Martha Stewart made a huge tactical error in fighting the charges on ImClone. She could easily have said, “My broker called me about this, I was in a cab, between meetings, making calls, juggling […]
Read more...We had mentioned in Links a few weeks ago tax law change allowing banks acquiring other banks with crappy assets to use the tax losses (the net operating loss carryforward) of the acquired company: Major Tax Incentive For Bank Purchases: IRS Eliminates the Limitation on Banks’ Built-In Losses Post-Purchase Jones Day (hat tip reader Richard). […]
Read more...The UK’s Times reports that Swiss bank UBS intends to change its bonus program so that current year bonuses can be largely reversed if performance in subsequent year falls or generates losses. Even more striking, the bank is considering trying recoup bonuses already paid to certain executives. The UBS move is a worthwhile effort towards […]
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