18 years in Wall Street, left after finding out it was all horseshit. Founder/ Master and Commander: iBankCoin, finance news and commentary from the future.
This is officially a credit crisis of interbank lending between China mainland and Hong Kong.
HIBOR was already absurdly priced last night at 13.4%; tonight it went full retard and blew out to 67%.
Separately, but related, Chinese citizens are scrambling to get out of their yuan in exchange for dollars. People on the ground say, over the past two weeks, they’ve seen a 40% spike in money changer services. The average flight out of China is 200,000 dollars.
The Shanghai is ignoring the news, flat for the session–so far.
Junk fund manager Marc Lasry no longer finds it necessary to report his asset levels to Lipper or Morningstar. His performance has been so dreadful, so cataclysmic, losing 40% of its assets since October on a -13.5% 2015 return or worse than 98% of his peer group, I am sure he’s closing the whole kit and kaboodle up, in order to go spend his billion dollar personal fortune in peace, without the distraction of having to lose the retirement funds of overzealous old folk in search of yield.
The Avenue Credit Strategies Fund has lost about 40 percent of its $1.2 billion in assets since the end of October. The fund currently has about $650 million to $700 million in assets, with about 15 percent in cash holdings and less than 5 percent in illiquid investments, according to people familiar with the situation. Avenue Capital was not immediately available to comment.
Research chiefs for Morningstar and Lipper said on Monday they had not received daily asset under management figures from the Avenue Credit Strategies Fund (ACSBX.O) since about mid-December. The fund is not required to report the figures, but not doing so is “very unusual,” said Jeff Tjornehoj, head of Americas research for Lipper, a Thomson Reuters unit.
People familiar with the situation said outflows from the Avenue Capital fund had become a distraction after an unrelated junk bond fund in early December imploded. Junk bond investors already were on edge, pulling $3.6 billion from high-yield funds in November, according to Morningstar data.
Like the Third Avenue fuckery, the market might view this as somewhat worrisome. Where there’s smoke, there’s a whole fucking village burning down.
It is time. I haven’t pulled Peter Schiff out from the woodworks since the world ended in 2009. Lo and behold, he is back, bringing forth his brand of excessive gloom, suggesting “we’re going MUCH, MUCH LOWER” and how this bubble is twice the bubble of the previous two combined (lolz).
Also, he lays waste to the token bull he was debating. It was like watching Macho Man Randy Savage defend the Intercontinental title against some random throw in named Tom Stone.
I especially like when Schiff laughed at the fat guy for wanting to buy dips, dismissing him completely by not even acknowledging his existence.
Some highlights.
We’re in denial.
QE4 is coming.
The Great Recession is about to resume.
We’re going to die of the Fed’s cure.
The economy is in lousy shape.
This is as contained as the mortgage crisis in 2007.
The man from Virginia Beach toils away, day in and day out, to provide you with actionable, and very sagely posts, regarding the price of crude oil and oil, denominated in over 50 currencies, and all you do it throw your teevee dinners at him, whenever he comes on the tube.
Today he declared oil to be completely screwed, with producers in the streets. He cited small pockets of oil dubbed “Western Canadian Select” for whoring their oil for a pittance of just $14 (lolz), and how it’s literally fucking WTI. I truly don’t think Western Canadian Select is having all that big an impact. Then again, I’m not Dennis “In Winning Terms” Gartman, am I?
Dennis posits oil will crater, the fuck, down to ‘egregious levels’–$15 to $18, at which point it will then become a buy. Also, Dennis says China is no longer filling up their reserves and how the Saudis and Iraqis are retarded, leaving the onus on U.S. frackers to act responsibly and cut production.
Pressure remains on crude and we’re now entering margin call panic trading.
There’s an old urban legend that says the Dutch bought the island of Manhattan from the Lanapes for some beads and $24. Over the centuries, that $24 has remained constant, untouched by inflation and the possibility that the Lenapes could’ve taken that small sum of money and invested it wisely. As a point in fact, had the savage Lenape set up trust accounts and invested the $24 over 350 years, it’d be worth $64 billion–a decent sum of coin for the crime infested rat hole called Manhattan.
Fast forward to today and everyone is talking about how the level of share buybacks are indicative of a market top. I think there are lots of reasons why the market topped, none of which have anything to do with buybacks. Also, these morons aren’t factoring in massive earnings and revenues gains from the previous cycles.
Revenues and earnings are up huge since the last cycle top. The buybacks we’re seeing today are wasteful, idiotic, and completely devoid of rational thinking; but they’re nothing special when compared to previous cycles.
I bought more spy, delving into leverage–following the mandates dictated by Exodus.
It’s a dark world out there, as Brent crude breaks the backs of our friends in the Saudi fields, in real time. Everything is crashing, but stocks.
LISTEN TO ME: THERE ARE 10,000 REASONS TO CRASH THIS FUCKER INTO THE ROCKS; but we’re rallying instead. A tradeable bottom is in.
I still have a a full position in TLT, which is 25% of my assets. My only other position is SPY, as I prefer to eliminate stock specific risk for the entirety of 2016.
This is my 4th SPY purchase. My basis is a touch over $196.
Don’t you love when analysts wait until a stock is down 80% to downgrade them to neutral? That’s exactly what the Australian investment bank did today with FCX. Being that Australia is a kangaroo and a copper mine, when analysts talk metals over there, the world tends to listen.
The research note did nothing but sing praises for Freeport’s “world class” mines and unique blend of awesomeness. If the company could get a better handle on its debt, well, they’d be inclined to be measurably more optimistic.
Tough day in the markets? Fed’s Lockhart doesn’t give a shit. He’s only interested in higher rates, to push back against that tidal wave of inflation that’s beating against our doors.
Federal Reserve Bank of Atlanta President Dennis Lockhart said he favors continued tightening of monetary policy this year, and a global selloff in stock markets is unlikely to affect the U.S. economy.
“When such volatility develops, I think it’s helpful to look at the real economy of the United States as opposed to the financial economy and ask if something is fundamentally wrong,” Lockhart said in prepared remarks in Atlanta. “Are there serious imbalances that make the broad economy vulnerable to foreign shocks? I don’t see that kind of connection in current circumstances. ”
After talking all of that nonsense, he then threw out the boiler plate “we’re soooo data dependent, like OMG.”
“I’d like to be more definitive in predicting future rates, but the degree of uncertainty – particularly as regards global influences on our economy — affirms the wisdom, in my opinion, of letting the economic data do the talking,” Lockhart said.
Markets are soft again, led lower an insane drop in oil of 6%. Biotech is also cremated into skeleton dust, off by 5%.
If you’re looking for a god damned reason why FCX is down 20%, this is probably it.
The mining giant is in trouble again, prompting bond holders to take out insurance, which is causing all sorts of fuckery. It’s almost like a self fulfilling prophecy.
The cost of insuring Glencore Plc’s debt against default rose to a more than six-year high as the price of raw materials such as copper continued to tumble.
The trader and miner’s credit default swaps increased to as much as 946 basis points, the highest since April 2009 on a closing basis, according to data from S&P Capital IQ’s CMA.
Slumping commodity prices have battered Glencore, prompting it to scrap a dividend payment, sell new shares and outline asset sales as it seeks to curb debt to maintain its investment-grade rating. Copper dropped to a six-year low amid a rout in metals as muted Chinese inflation increased concern that demand from the world’s largest buyer of raw materials will slow.
“CDS levels are driven by commodity prices and in the case of Glencore, especially copper,” said Max Mihm, a Frankfurt-based portfolio manager at Union Investment, which holds Glencore bonds among assets totaling about $271 billion. “If prices fall further and stay low Glencore will need to do more to protect its IG ratings.”
No one actually knows how much debt Glencore has, believe it or not. Some say $45 billion, others say $100 billion. Either way, the whole thing is fucked and is spooking stocks.
Equities gave up the rally and have now plunged to extend the nightmare called 2016.
You’re gonna have to make a long list. Lots of filings are coming, most of which are in that darn pesky commodity space that we all loved 5 years ago and went ahead and lent all of that money.
Here is a simple search inside Exodus of companies that Wall Street have declared dead. As you can see, ACI was in there.
By the way, ACI just fucked its bond holders, wiping away $4.5bill in debt.
Arch Coal, Inc. (NYSE: ACI) announced that it has reached an agreement with a majority of the lenders under its $1.9 billion first lien financing facility to significantly restructure the company’s debt load. Arch has entered into a restructuring support agreement with the members of an ad hoc group of lenders that hold more than 50% of the company’s first lien debt. Under the terms of the agreement, the lenders have agreed to support a restructuring transaction that will eliminate more than $4.5 billion in debt from Arch’s balance sheet and position the company for long-term success.
I love how these jackasses are always looking for ‘long term success’, after they lose everyone’s money. Why weren’t they positioning the company for long term success 2,4,6 years ago?
Back to my point. Here’s the list. I always keep a list. The amount of debt to get washed away is on the far right.
It’s the end of an era. Personally, I’m looking forward to PBR’s receivership. It should plunge Brazil into a headlong crisis, reminiscent of the dark ages.
