JPM Doesn't Pass the Smell Test...Money Center Downgrades Coming Wed, May 16, 2012
The CDX IG18 Index opened another 1.5bps wider this morning and its bid ask spread remains wide… indicating that index traders are concerned that JPM hedging needs could quickly overwhelm market liquidity. The...
Credit Shorts Beware with Fed Likely Accommodative Until 2016 Wed, May 2, 2012
The New York Times recently published a Krugman opinion piece in which he lambasted Big Ben for basically being incompetent. He used nicer words, but...
In the years leading up to the credit crisis, it was nearly impossible for financial organizations to price credit high enough to cover the risk associated with extending credit and still win business. This was a simply reality…and financial companies knew they were...
The disappointing rebound in the spring residential homebuilding season is once again catching investors flat footed, and it is likely to keep happening until the mortgage finance industry recovers. We have never agreed with...
The Long-Term Negatives Are For the Academics Mon, Mar 5, 2012
The LTRO was the topic of a Financial Times opinion article this weekend. The commentator stressed that although the LTRO was desperately needed to avoid an economic catastrophe; the markets need to identify the negative long-term repercussions that the LTRO could have on the real economy. This is a good exercise to contemplate and study, especially for the current batch of Finance academics and their PHD understudies. However...
The Greek vote does not mean that Greece will avoid defaulting on their debt in the near to intermediate time frame. The Greek vote does not mean that Greek politicians will implement the agreed to austerity measures. The Greek vote does not mean that the Eurozone will remain a viable growing entity or that investors will continue to embrace the EUR as a potential replacement for the USD. What the Greek vote does indicate is that...
This past week the popular press has taken on the topic of comparing “Reagan’s Recovery” to “Obama’s Recovery” and its potential impact on this year’s 2012 election. The common theme seems to be...
Fitch’s research report indicated that a European failure to control the sovereign credit crisis would have a negative impact on US bank credit quality. No Crap Sherlock….have you noticed the...