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This CDS report was written by Markit’s Gavan Nolan
The Markit iTraxx Crossover index tightened below 1,000bp for the first time since the beginning of December in a broad-based rally. Investment grade names also performed strongly,
An investment operation is one which, upon through analysis, promises safety of principal and a satisfactory return. Operations not meeting these requirements are speculative.
That’s a quote from legendary value investor Benjamin Graham and it features prominently in James Montier’s first piece of 2009.
Fuel costs may finally be down, but it’s now a revenue game for the airlines.
To wit, British Airways has just announced a 12.1 per cent fall in premium traffic last month — its biggest decline since April 2003 (the 26.4 per cent drop in that month impacted by the timing of Easter).
From the New York Fed:
January 5, 2009
The Federal Reserve Bank of New York today began purchasing fixed-rate mortgage-backed securities guaranteed by Fannie Mae, Freddie Mac and Ginnie Mae. Selected private investment managers are acting as agents of the New York Fed in these purchases.
Natural gas flows from Russia to Europe are down sharply on the back of the Russian Ukrainian pricing dispute.
Should we be concerned? For the time being, analysts say no. European nat gas and power prices yesterday staged a small rally,
A general New Year “feelgood factor” helped giddyup the credit markets, following a positive trail set by equities in Europe.
The iTraxx main European index of leading investment grade borrowers CDS was slightly tighter this morning quoted at 172.19bp,
On FT Alphaville this morning,
- UK house prices are nearly where they should be.
- Highstreet sales numbers coming through.
- Coming up short.
- Richard Bove has a Fed problem.
- Alternative folly.
After the “flight to safety” panic of last year which saw investors flocking to government bonds among a dwindling choice of “save haven” investments, the mood appears to be turning nearly 180 degrees against government debt – as seen in the FT’s latest survey of leading asset managers and strategists,
Maurice (”Hank”) Greenberg has more to say about AIG. He doesn’t like the fact that AIG has sold its division HSB to Munich Re. Perhaps ‘cos he wanted it. Or perhaps also ‘cos the board of AIG can do no right.
OK, OK. Time to ‘fess up to my bad Glencore CDS call. Think I said below 1,000 basis points by Christmas. Well, after the first full day of the first proper week of the new year, it’s hovering at just above the 2,000bp mark.
Markets live chat transcript for the chat ending at 12:12 on 6 Jan 2009. Participants in this chat were: Paul Murphy, FT (PM) Neil Hume, FT (NH) PM:Hello! PM:Sorry we’re a minute late this morning
It might be imperceptable to the naked eye, but the nature of credit is changing.
The seismic changes on the Fed’s balance sheet are going to be felt in a myriad of ways: most obviously as the yield curve flattens out and effective rates begin to zero.
The very suggestion that an entity like Fortress Investments, preaching the benefits of private ownership, was suitable for listing on the public markets always struck us as clownish idea.
The stock floated two years ago and promptly popped to a 68 per cent premium above the $18.50 IPO price,
Poor Richard Bove. The veteran Landenburg Thalmann banking analyst has just discovered quantitative easing — though he doesn’t yet know the name for it.
From his Jan. 5th note, simply entitled: “I’ve got a problem.”
Interesting Chart of the Day here from Bloomberg. The blue line is a basket of the 32 financial stocks that the FSA banned from short-selling in September. Together they declined 28 per cent since the restriction came into effect.
The all-important Christmas sales figures are starting to come through for the UK retailers with both Debenhams and Next reporting on Tuesday morning.
Debt-laden Debenhams posted a 3.5 per cent drop in underlying sales for the 18 weeks to Jan 3,
… where they should be if you’re a fan of mean reversion anyway. But still nowhere near as low as they will be if previous downward trends are to be believed (more like nearly halfway there).
To wit,
Elsewhere on Tuesday,
- Doing down Dimon – and how.
- Eating crow at a dinner for Wall Street.
- Why governments should not be running banks.
- The limits of withdrawal limits – or how hedge funds are ruining themselves.
Comment and analysis from the FT on Tuesday,
Jim O’Neill - Why it would be wrong to write off the Brics
By the end of the decade they may be close to representing 20 per cent of global GDP. This is dramatically higher than any of the four scenarios we considered in 2001 when I first wrote about the likely emergence of the Bric economies.
Breaking pre-market news on Tuesday morning,
- Nationwide says house prices fell 2.5% in December - statement
- Ryanair fails to woo Aer Lingus investors: initial offer draws just 22,314 shares
- Corporate results:
The UK’s ban on short selling of 32 financial stocks will be lifted on Jan 16 but investors will continue to be required to disclose their short positions until at least June 30, the FSA watchdog body said Monday.
General Electric’s finance arm on Monday launched a $10bn sale of FDIC-backed debt, the largest sale under the US government’s Temporary Liquidity Guarantee Program since its inception last November,
Talks to salvage Waterford Wedgwood were underway with at least three US parties on Monday night after the owner of the historic crystal and porcelain brands was forced into receivership. The company’s lenders,
Hedge funds are suffering a New Year hangover of record proportions after a year-end rush to suspend or restrict withdrawals of money and the first of a looming wave of closures. Funds from London managers GLG,
High-grade corporate bonds are set to outperform other asset classes in 2009, fund managers and market strategists surveyed by the FT have forecast. More than half the 30 top asset managers and strategists surveyed said high-quality corporate credit was trading at cheap levels and was most likely to see a rally in 2009.
LyondellBasell’s bondholders were Monday braced for large losses after it emerged the world’s third largest petrochemicals company was on the brink of bankruptcy. The price at which the company’s bonds on Monday traded indicated that LyondellBasell’s bonds are worth not much more than 10% of face value.
Shares in Fortress Investment Group, the US first private equity and hedge fund firm to list nearly two years ago, rose Monday amid speculation that the group may opt to go private once more. Shares in Fortress,
The Federal Reserve on Monday kick-started its latest unconventional programme to boost the US economy, this time targeting mortgage-backed securities to help the slumping housing market, reports Reuters.
US prosecutors on Monday asked a federal judge to jail Bernard Madoff pending his trial, saying he violated a court order by transferring more than $1m of valuables from his Manhattan apartment to third parties including his brother and son.
Britain risks a repeat of the current financial crisis unless it establishes a body that is independent enough to stand up to powerful vested interests, a prominent former regulator has warned. Sir Andrew Large,
