tag:blogger.com,1999:blog-34323687.post2249294982551192603..comments2024-03-29T03:19:56.674+00:00Comments on Macro Man: It's trickyMacro Manhttp://www.blogger.com/profile/12324967552369915949noreply@blogger.comBlogger28125tag:blogger.com,1999:blog-34323687.post-54844529522436115192008-09-11T17:30:00.000+01:002008-09-11T17:30:00.000+01:00There are three important things to know about any...There are three important things to know about any bond before you buy it: the par value, the coupon rate, and the maturity date. Knowing these three items (and a few other odds and ends depending on what kind of bond you are buying) allows you to analyze the bond and compare it to other potential investments.. Therefore <A HREF="http://www.corporate-bonds.info" REL="nofollow">any type of bond</A> not suit you if you want to invest in bonds.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-74494813428322205722008-09-10T00:00:00.000+01:002008-09-10T00:00:00.000+01:00the comments on investment banks losing money on f...the comments on investment banks losing money on fnm and fre due to lost pnl on market making maybe true, but they miss an area which is paying out big for the ibs - structured credit. Most structured credit desks have sold fixed recovery structures including those names, and clients who bought are now on the hook for the fixed recovery value not 0-5% that is on standard cds. The numbers credit structuring desks have made of this are not small...Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-70302707192723905402008-09-09T22:25:00.000+01:002008-09-09T22:25:00.000+01:00It's hard to explain why bond futures were up... ...It's hard to explain why bond futures were up... but here's a stab at it. Just because they "guarantee" agency debt, doesn't mean that they've suddenly taken on a bunch more debt. Earning OAS to agency at very wide levels on the retained portfolio can't hurt too badly. And so far no major capital infusion from the govt yet. Secondly, they've theoretically "stabilized" the entire financial market right? Well guess not looking at today's moves. Certainly everyone who thinks convexity hedging will come through has been wrong so far... Perhaps servicers are hedging to treasuries instead of swaps now? therefore swap spreads are wider??? who knows... ready to throw in the towel.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-48488371643241668222008-09-09T21:06:00.000+01:002008-09-09T21:06:00.000+01:00In fairness, I don't think that you had to be part...In fairness, I don't think that you had to be particularly prescient to see <I>that</I> coming.Macro Manhttps://www.blogger.com/profile/12324967552369915949noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-59712054272601438422008-09-09T20:59:00.000+01:002008-09-09T20:59:00.000+01:00Your prediction of a bull market for lawyers seems...Your prediction of a bull market for lawyers seems to be spot on. Already the former Fannie Mae execs got targeted by a class-action lawsuit.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-90511218985144628802008-09-09T19:06:00.000+01:002008-09-09T19:06:00.000+01:00Anon @ 6.36, well, LEH can only go bust once. Eve...Anon @ 6.36, well, LEH can only go bust once. Even if the property book was worth zero in absolute terms, the firm's creditors would still be left to fight over what tangible assets remain...all the more reason to believe lawyers are among the few who look set to prosper on Wall St, near term. <BR/><BR/>Steve, dunno, but the chap who sits next to me has been banging the drum about the steady rise in the homebuilders over the past several months. Is it short covering? A real bottom in those stocks as some of the macro housing data becomes slightly less awful? Bear fatigue? I really don't know, and am staying away.Macro Manhttps://www.blogger.com/profile/12324967552369915949noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-91249321558831414272008-09-09T18:36:00.000+01:002008-09-09T18:36:00.000+01:00$70bn at zero in the dollar????? Would put SPX wh...$70bn at zero in the dollar????? Would put SPX where?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-33238114281409155642008-09-09T18:29:00.000+01:002008-09-09T18:29:00.000+01:00Here's a puzzle for you: Why is the Dow Jones Rea...Here's a puzzle for you: Why is the Dow Jones Real Estate Index doing so well? It is hanging tough at recent highs...Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-44028171482853817152008-09-09T18:10:00.000+01:002008-09-09T18:10:00.000+01:00Well, if it's marked at par and its true value is ...Well, if it's marked at par and its true value is 90, for example, and they hold $70 bio on their books...there's the remaining market cap wiped out.<BR/><BR/>One for the conspiracy theorists...perhaps Team 1250 stepped in on Fannie and Freddie because they thought that Lehman might come under the cosh this month, perhaps terminally?<BR/><BR/>If so, it would be a shame: most of the LEH people I've come across have been really top drawer, and I quite like a lot of them. I would not like to see them get chucked out on the street, but unfortunately this market isn't taking any prisoners with the fniancials.Macro Manhttps://www.blogger.com/profile/12324967552369915949noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-51250737646525476452008-09-09T17:56:00.000+01:002008-09-09T17:56:00.000+01:00Fear and greed sums this up best. LEH at $9 would...Fear and greed sums this up best. LEH at $9 would be market cap of $6-7Bil, their asset management Co. is worth at least that and so the market is currently valuing their real estate at zero?!?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-39372184958251201622008-09-09T17:48:00.000+01:002008-09-09T17:48:00.000+01:00"an equally erroneous one of US recovery first, wh..."an equally erroneous one of US recovery first, which'll be killed off and sent to Memehalla soon"<BR/><BR/>Beware the beast man...and consensus views put out by investment banks.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-17127102195901173312008-09-09T17:35:00.000+01:002008-09-09T17:35:00.000+01:00Interesting observation by MM that LEH seems to b...Interesting observation by MM that LEH seems to be this week's canary in the coal mine. Some may to be counting on a Neuberger Berman sale to be LEH's salvation, but I fear that liquidity problems can move too quickly to be remedied by asset sales. Lots of talk here about HFs cutting fees dramatically to stave off redemptions. Is this being seen outside of US?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-65606412795929590612008-09-09T17:32:00.000+01:002008-09-09T17:32:00.000+01:00Dear MM,I worked in canary wharf for a long time. ...Dear MM,<BR/><BR/>I worked in canary wharf for a long time. Every time I walk into the tube station from my office (past All Bar One), I envy the LEH building.<BR/><BR/>Little did I know that someday it will be up for sale and I could potentially bid for it.<BR/><BR/>STRANGE BLACK SWAN WORLD THISAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-60550657240602441762008-09-09T17:08:00.000+01:002008-09-09T17:08:00.000+01:00Satan or State finger? The best trading strategy i...Satan or State finger? The best trading strategy is useless if governments and their banks intervene all the time. It really reduces the fun-factor. Like: you’re right but for political reasons, no we can’t let it happen. I’d wait until the smoke clears.<BR/><BR/>Commentators here (CH) are saying how bad all that bailing out is only to add that the US gov has "no choice" and it would give us (foreigners) "a bit time" - for what? Pulling out with grace? Erm... no comment.<BR/><BR/>Let’s quickly put the Rural-AntiObama-NRA-Hat on: the US is bankrupt and creditors are seizing everything they get hold of. The Fed’s dollar intervention* supports foreign dollar assets, not the US economy. Yesterday’s nationalization gives relief to foreign holdings. But all these (and future) interventions cost taxpayer money that could have been spent in the US (=growth).<BR/><BR/>With Mr. US President’s track record of snubbing the international sister- and brotherhood of women, men and others, why not just smash the US credit standing along with its moral standing? After nationalizing half of the credit market, why not just declare all its debt worthless? The Chinese suffer hardest but be sympathetic knowing that the route to state capitalism requires making sacrifices.<BR/><BR/>There’s a choice Mr. President: just let the financial system blow up and click restart – just like Iraq. Think: How can the fin system woes feed into the real economy? Only by making credit more expensive. Now, what’s worse for the real economy: Having problems borrowing NEW money (=reduced growth) or taxpayer bail-outs burning existing money (=eliminating the substance for future growth)?<BR/><BR/>The DOW says it all. Absolutely NO confidence despite interest rate cuts, bail-out, nationalization... Within the existing policy framework, each of these steps is by itself a rational choice – the only plausible response to the problem at hand. But taken together, these steps are a concatenation of atom bombs that eliminate US spending power and thereby the substance for future growth.<BR/><BR/>*<BR/>http://siliconinvestor.advfn.com/readmsg.aspx?msgid=24833658<BR/>http://www.chrismartenson.com/Central-Bank-Interventionmikarskyhttps://www.blogger.com/profile/07451575916097736038noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-30058992267901391182008-09-09T16:45:00.000+01:002008-09-09T16:45:00.000+01:00Sounds an awful lot like the markets are on a Lehm...Sounds an awful lot like the markets are on a Lehman deathwatch if they use that company as a weather vane.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-8544564706147328912008-09-09T16:34:00.000+01:002008-09-09T16:34:00.000+01:00I have sat here for the last two hours watching ju...I have sat here for the last two hours watching just about everything on my screen move tick for tick with the Lehman share price...which has about a 40% range today (and at its lows was down more than 50% from yesterday's open.)<BR/><BR/>I have ALL my risk in options (long, natch)....and i am still finding it difficult to watch!Macro Manhttps://www.blogger.com/profile/12324967552369915949noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-59767001937390273242008-09-09T16:18:00.000+01:002008-09-09T16:18:00.000+01:00My dad traded commodities most of his life. He of...My dad traded commodities most of his life. He often told me some of his best trades came from sitting on his ass watching choppy markets.<BR/><BR/>How can anyone trade these markets?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-4340108602954429462008-09-09T15:43:00.000+01:002008-09-09T15:43:00.000+01:00Anon @ 3.26...the most obvious analogue to "Team 1...Anon @ 3.26...the most obvious analogue to "Team 1250" is in Japan, which in the wake of the Nikkei/property bust engaged in a series of "price-keeping operations" in the early 90's. (Cassandra, do you recall when it started?)<BR/><BR/>Given that the Nikkei didn't bottom until more than a decade later, I think that we can probably conclude that official equity demand can't overcome overwhelmingly negative fundamental and credit conditions.<BR/><BR/>OTOH, the HKMA bought Hong Kong equities will pretty good success in 1997.....I'll leave it to you to judge whether the second largest economy in the world or a city-state is a more apt road map for Team 1250.Macro Manhttps://www.blogger.com/profile/12324967552369915949noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-10882982563184024062008-09-09T15:27:00.000+01:002008-09-09T15:27:00.000+01:00It's tricky to make a bunchTo make a bunch wit...It's tricky to make a bunch<BR/>To make a bunch with the credit crunch<BR/>It's tricky tricky tricky<BR/><BR/>Just trying to hold onto my positioning until the market makes its mind up. Thanks for the cds colour, didn't know about the 100% recovery. Wonder if the cash traders who are booking p&l with the spread tightening were talking to their deriv counterparts about scenario playouts and basis plays. One thing's for sure, it's a fascinating time to be trading! Cheers, JLAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-63998196330105571112008-09-09T15:26:00.000+01:002008-09-09T15:26:00.000+01:00Thought- provoking post and comments. Intrigued b...Thought- provoking post and comments. Intrigued by the many references to market behavior not adding up and implicit references to the unseeen hand. (Some may recall the Dead Science lyric--" I see the plan of the unseen hand...") Assuming that the unseen hand is at work in these markets, creating world a la Lewis Carroll, where nothing is what it seems to be, what is the indicated trading strategy?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-20939927286820703442008-09-09T14:59:00.000+01:002008-09-09T14:59:00.000+01:00"Satan's Finger" !!I like it, I really like it..."Satan's Finger" !!<BR/><BR/>I like it, I really like it...Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-87677044887230004402008-09-09T14:20:00.000+01:002008-09-09T14:20:00.000+01:00To be honest, I turned to my partners and said &qu...To be honest, I turned to my partners and said "I wonder if we will see ‘them’ come in and defend the market again" as has become so commonplace of late. It seems that the worse the economic data, the more powerful a futures-led rally materializes, one that we actually partially hedged our short positions in front of. <BR/><BR/>And lo and behold! The magical rally materialized, led by none other than the large banks such as Wells Fargo. I must admit that the market has a way of squashing one’s ego, but the "I don’t care what I pay for futures in the face of incredibly lousy economic statistics" has become a bit insulting of late. I could go on and on and tell you who I think it is buying these futures without a fear of loss, but I shall leave it up to your imagination who I feel it might be (Hint: Who is spending other people’s money and doesn’t have to answer to anyone or have a ‘P & L'?).<BR/>http://www.minyanville.com/articles/C-citigroup-bank-jpm-fre-fnm/index/a/18846<BR/><BR/>I found this interesting and at the same time it is what I see as well, seems that more then a few traders acknowledge this also. Sure one can make money I guess but it's a game I don't care to play.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-73191406542364170622008-09-09T14:15:00.000+01:002008-09-09T14:15:00.000+01:00You had me when you used Run-DMC.You had me when you used Run-DMC.Damianhttps://www.blogger.com/profile/16016686632386396090noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-45799349901742574132008-09-09T13:49:00.000+01:002008-09-09T13:49:00.000+01:00ill try to rhyme the rockhenry dropped the dime on...ill try to rhyme the rock<BR/><BR/>henry dropped the dime on fred-fanie<BR/>it was their time<BR/><BR/>but now cds is causing some burn<BR/>it a credit event ISDA says fur certain<BR/><BR/>amount of CDS outstanding is 1.5 trillion <BR/>gretichen can't count<BR/>she was illin in accounting<BR/><BR/>looks like cash settle about 70 billion<BR/><BR/>thats a lot of bling to be swinging, if you already in the poor house with the debt man screeming<BR/><BR/>ok that was bad but point is--some more stink bombs going to go off as cds settles over next 2 weeks<BR/><BR/>hope the number help most big legal temas have copies of the isda discussions and determinations from yesterdayAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-61171662638572840342008-09-09T13:19:00.000+01:002008-09-09T13:19:00.000+01:00from john mauldin (highly recommended you read his...from john mauldin (highly recommended you read his newsletter if you don't already). <BR/>"Gretchen Morgenstern reported last week that there are - drum roll - $62 trillion (with a "T") in credit default swaps written against Fannie and Freddie debt, or somewhere near 12 times the actual debt."<BR/>I believe that most of that is written against the 19 billion dollars of subordinated debt. I was under the impression that the bailout of the subordinated debt would not trigger a default.Kevin Shttps://www.blogger.com/profile/03799209699161609412noreply@blogger.com