"If you're going to panic, do it fast and beat the crowd." ~ Jesse Livermore

Tuesday, September 6, 2011

Mohamed A. El-Erian - Credit Crisis: Tuesday's Market Preview Is Not Pretty

Mohamed A. El-Erian - Credit Crisis: Tuesday's Market Preview Is Not Pretty
Huffington Post
Several records have been set today, from a 92-percent annualized yield on very short-dated (six-month) Greek bonds to the risk spreads on Italian and Spanish CDS (creditdefault swaps). But an important element of the story is elsewhere. ...

Swaps on Treasuries Reach Record Low Against Bunds in S&P Denial
BusinessWeek
Traders are paying $73840 a year to protect $10 million of Treasuries against default, less than during the height of the financial crisis in 2008 and below the $78670 for higher-rated German bunds, according to CMA. The difference between prices of ...
US treasury default affects UCCS' operations
The Scribe
Early last month, lawmakers negotiated the raising of our federal debt ceiling, avoiding adefault on our debts and a potential financial crisis that would have rivaled the Great Depression of the 1930s. In the United States, our government can only ...
European Banks Under Assault in Markets That Remind Ackermann of Late 2008
Bloomberg
Josef Ackermann, chief executive officer of Deutsche Bank AG, said market conditions remind him of late 2008, and urged lawmakers to act to avoid a repeat of the financial crisis. Josef Ackermann, chief executive officer of Deutsche Bank AG, ...
Spreads Diverge From Ratings by Most in 20 Years: Credit Markets
Bloomberg
At the height of the financial crisis in the first quarter of 2009, downgrades outnumbered upgrades by more than 10 to 1. “At no point in more than 20 years has the difference between credit spreads and the downgrade to upgrade ratio been larger,” ...
Polish Credit-Default Swaps Have Hit 'Quite Absurd' Level, Radziwill Says
Bloomberg
Poland's five-year credit-default swaps, which increase as the perception of the country's creditworthiness deteriorates, widened last month to 236 basis points, the highest level since April 2009. The contracts rose 67 basis points in the past 12 ...
Postal Office Nears Default
ABC News
By CHRISTINA CARON (@cdcaron) As the US Postal Service begins shuttering offices across the country to stem their ever-growing $9.2 billion deficit, the entire agency now faces default and could shut down next summer, USPS spokesman Dave Partenheimer ...
French court allows Chirac being tried in default
Xinhua
5 (Xinhua) -- Former French President Jacques Chirac would be tried in default due to his deteriorating health situation, a Paris court ruled on Monday, letting the trial move on with the 78-year-old represented by his lawyers. ...
Dollar Traders Take in Global Financial Cues as QE3 Fodder
DailyFX
The European financial crisis is growing more prominent and each day. Now thecontagion seems to have passed the sovereign space and enter the banking level, virtually guaranteeing a full crisis. And yet, EURCHF is holding back from declining. ...
Reluctantly, Europe Inches Closer to a Fiscal Union
New York Times
By LOUISE STORYand MATTHEW SALTMARSH As leaders in Europe try to contain a deepening financial crisis, they are also increasingly talking about making fundamental changes to the way their 17-nation economic union works. Angela Merkel of Germany and ...
European Credit Is Wider And Entering A New Phase Of Risk Aversion
Seeking Alpha
This may take some time, but if I'm correct and we are entering the first real quarter end where every bank is going to want to show minimal notional or "jump to default" risk onPIIGS and Banks, this can happen. It also means that we are less likely ...
Analysis - Pension funds in new crisis as deficit hole grows
Reuters
At the heart of their problems is a steady move by pension plans in the United States, euro zone, Japan and the UK to cut exposure to risk after the financial crisis. But this "de-risking" may end up depressing their long-term returns from stock market ...
Darling: EU Must Get A Grip On Greek Debt
Sky News
He was speaking in advance of the publication of Back From The Brink, a memoir of his time as chancellor during the financial crisis. Mr Darling said he had to elaborate on his fraught relationships within the government in order to tell the story of ...
No end in sight for crisis of Western capitalism
People's Daily Online
All kinds of plights and turmoil show that the Western countries are experiencing a profound institutional crisis after being hit hard by the international financial crisis. After the financial crisis, the financial deficits and sovereign debt in the ...
PSO seeks Rs17 billion immediately to avoid default
PakistanToday.com.pk
ISLAMABAD - The cash strapped public sector entity Pakistan State Oil (PSO) has sent a SOS to the government seeking immediate release of Rs 17 billion to clear its overdue letters of credit (LC) in next 24 hours otherwise it could default...
Time to stand up to the crisis junkies
Financial Times
It served them well during the depths of the financial crisis, forcing governments into bail-outs that, on deeper reflection, might have been handled differently. But standing up to crisis junkies and distinguishing between the various phases of a ...
Euro-zone default insurance costs rise
MarketWatch
The spread on five-year Italian government credit default swaps, or CDS, widened to 422 basis points from 400 basis points on Friday, according to data provider Markit. That means it would now cost $422000 annually to insure $10 million of Italian debt ...
Asian Stocks Slide on Europe Debt Concern
Bloomberg
By Anna Kitanaka and Lynn Thomasson - Mon Sep 05 10:43:22 GMT 2011 Mitsubishi UFJ Financial Group Inc., Japan's biggest lender by market value, declined 2.1 percent after the cost of insuring against default on European sovereign and financial debt ...
TEXT-Fitch affirms Abengoa at 'BB'; outlook stable
Reuters
Sept 05- Fitch Ratings has affirmed Abengoa, SA's (Abengoa) Long-term Issuer DefaultRating (IDR) and senior unsecured rating at 'BB'. The Outlook for the Long-term IDR is Stable. Abengoa's diversification in terms of geography, industry and ...
Stocks, Italian Bonds Drop on Debt Concern
Bloomberg
Deutsche Bank AG Chief Executive Officer Josef Ackermann said conditions in the stock and bond markets are reminiscent of the financial crisis of late 2008. “The 'new normal' is characterized by volatility and uncertainty -- not only in respect to ...
Govt offices default on rents
DAWN.com
By Syed Irfan Raza | From the Newspaper ISLAMABAD, Sept 4: The local administration, police and judiciary have defaulted on rents of private buildings where they have set up their offices; documents available with Dawn showed. These departments have to ...
Global banks in turmoil as US sues over toxic mortgage loans
MindfulMoney
Royal Bank of Scotland, HSBC and Barclays are among 17 global banks being sued by the US authorities over the sale of toxic loans to two US Federal housing finance organizations in the run up to the financial crisis. Royal Bank of Scotland, ...
No soft landing for Greece default: IMF economist
American Thinker (blog)
This is why an IMF economist believes the default of Greece will be messy - and could very well kick off an unprecedented series of bank failures. The Greek government says any more steps will only deepen the recession and make things even worse. ...
DC default funds should consider human capital and financial wealth – Pensions ...
Professional Pensions
By Sebastian Cheek An age-dependent approach to DC default funds, which takes into account a member's human capital and financial wealth, is better than traditional lifestyling, research shows. Two studies by the Pensions Institute at Cass Business ...
Poor Start to Important Week
Business Insider
First, France is less able to cope with the financial crisis than is Germany. As in a poker game, it is the second best hand that loses the most. Well, France has that hand. Its economy is not as competitive as Germany's and its ability to shoulder ...
Answer to a HECM Financial Assessment in the Data?
Reverse Mortgage Daily
When it comes to the some of the characteristics of borrowers who may be predisposed to tax and insurance default, there are a few knowns, Lunde says. “When folks draw all the cash upfront, they're significantly more likely to go into default later,” ...
Spanish Parliament approved the limitation of budget deficit, which will help ...
Caspionet
... which should save Spain from the possibility of probable default. The ruling Spanish Socialist Workers' Party and the opposition Popular Party that support the bill are trying to soothe the financial markets and overcome the financial crisis in the ...
Brazil Currency Market Ends Weaker Amid Gloomy Global Outlook
Wall Street Journal
External factors continue to be the biggest drag on Brazil, which had remained surprisingly resilient amid the fallout from the 2008 financial crisis. Greece's sovereign debt troubles have re-emerged as a weak spot in recent days, while German ...
Japanese Stocks Fall for Third Day on Europe's Debt Crisis
BusinessWeek
Mitsubishi UFJ Financial Group Inc., Japan's biggest lender, fell 1.8 percent after the cost of insuring against default on European sovereign and financial debt surged to records. Inpex Corp., the country's No. 1 energy explorer, dropped 2 percent ...
CMA CGM bonds flag default risks
Business Times (subscription)
Covenants on most of its borrowings were breached in 2009 after a slump in world trade amid the deepest financial crisis since the 1930s. CMA CGM received US$500 million from Turkish family-owned company Yildirim in November in return for a 20 per cent ...
Political Deadlock Maps a New Euro Crisis
TheStreet.com
If until now the markets had been trading euro solvency risks as a function of bankdefault insurance, political brinkmanship has placed the risks of a disorderly sovereign crisis and a euro break-up back on the horizon of tradeable risks. ...
Safe Havens In A Storm
Seeking Alpha
"I expect a hard default definitely before March, maybe this year, and it could come with this program review," said a senior IMF economist who is keeping close tabs on the situation. "The chances for a second program are slim. ...
Roubini Slams Trichet For Making The Biggest Mistake In ECB History
Business Insider
What these guys of the ECB do not seem to understand is that if they keep playing with fire, one of the high indebted countries could finally default, leaving thus the french and german banks heavily exposed. The ECB is governed by Germany and France, ...
Crude Oil: Despite US weakness, Global Demand continues to Support
Inside Futures
With labor statistics showing zero jobs added in August, consumer confidence at its lowest levels since the credit crisis of 2008, and many economist now mentioning the "R" word with disturbing regularity, one would think that energy prices would be ...
Debt ceiling blues
Observer Online
If the Treasury does not make full and timely payments to these groups, America would be considered "in default" on its obligations. A default would lead to a sudden contraction of government spending (roughly 40%), a loss of confidence in the American...
Fannie Mae's Defaults Sink to 2 Year Low
RisMedia.com (press release)
The percentage of mortgages in default more than 60 days in Fannie Mae's portfolio have fallen to the lowest level in two years, another sign that defaults are slowly but steadily declining as more homeowners pay their mortgages on time. ...

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