CCLA: The ECB’s Moves Were ‘Insufficient’

There are two ways to judge the ECBs moves.

1. How will they affect markets?

2. How will they affect the economy?

While Kiesel Soze says it’s the hugest shit ever, the distinguished and eloquent James Bevan, from CCLA, says it’s complete horseshit and that it will have no material impact on the ECBs economic woes.

To that end, Bevan believes the ECB will regret these moves, and rue them in a mournful manner.

This guy looks like he has a few bodies buried in his basement. But I’m certain he’s a great investor. Who’s that annoying BBG female host? What’s going on over there, cocaine?

The new ECB plan is going to serve as a giant vacuum, depleting the world of income generating corporate bonds. This, inexorably, is going to cause investors to lower the bar, disgrace themselves by settling for high yield crap, according to Mr. Kiesel.

Should credit spreads tighten, as Kiesel is predicting, both JNK and HYG are screaming buys.

Who the hell are these people?

Who knows what these people are up to? Some of you actually believe the analysts say the opposite on purpose, just to gain an edge on an unsuspecting public. Fucking conspiracy theorists.

At any rate, with the recent rebound in crude, analysts have become much more sanguine about the oil sector. This morning, Goldman upgraded a slew of companies, suggesting the worst is behind us and there are nothing but cotton candy clouds ahead.

They upgraded OII, FTI, WFT, OAS, CRZO, RSPP and APC. They did, however, downgrade HP.

HP likely told them to fuck off, when asked about doing a secondary for them.

Gains are bountiful in Europe. U.S. futures are following their lead, as people digest yesterday’s ECB actions, coupled with the yuan strength, and decided it was good news after all.

Crude is higher again, despite a sharply stronger dollar.

The DAX is ripping tits to the upside.

And of course, NASDAQ futures are through the roof.

There is a massive move in European banks taking place in Europe today, thanks to incentives offered to them by the ECB for lending money. The whole thing is sort of a mess. But in the interim, European stocks are spiraling higher, led by Unicredit, Axa and Deutsche Bank.

The euro is selling off v the dollar, a net positive for European exporters.

Look at those banks run.

These RNC hacks are incorrigible with their brazen, immoral, behavior, openly talking about ‘brokering’ the RNC convention in order to steal it from D. Trump. In other words, the time invested by the millions of republican voters are absolutely meaningless to the miscreants in the empty suits.

In the past, they’d at least try to be subtle about their corruption, hiding behind scandal and perfidy, using a controlled media to frame the narrative. Now they just come out and say it: ‘fuck this guy. He’s not one of us. We are going to take the election from him. Isn’t that a great idea, folks?”

You didn’t build your business.

You can keep your own Doctor.

We’ve won the war.

The upwards move in the Yuan is going to give the impression that the Chinese economy is strong. This is imperially important to the continuation of the commodity rally, which by extension, is key to the overall strength of the market.

They’ve figured out how to jimmy the markets. At the centre of the early 2016 collapse was forex dislocations in China, which cast a wide cloud of doom over the global growth narrative, which then caused commodities and plunge and the rest is history.

The yuan climbed 0.20 percent to 6.4948 a dollar as of 10:46 a.m. in Shanghai, according to China Foreign Exchange Trade System prices. The offshore rate in Hong Kong climbed 0.13 percent to 6.4966. The People’s Bank of China raised its fixing, which restricts onshore moves to 2 percent on either side, by 0.34 percent to 6.4905.

“The fixing and yuan moves reflect euro strength and dollar weakness overnight, as well as Chinese officials’ anticipation for further strength in non-dollar major currencies,” said Christy Tan, head of markets strategy at National Australia Bank Ltd. in Hong Kong. “The new yuan index continued its downward drift after falling below 99 in early February, and this is in line with the authorities’ aim of keeping the currency stable but allow gradual weakness against the basket.”

Nasdaq futures are higher by 0.9% and German DAX futures are higher by 1%.

This is the funniest story I’ve read in 2016. I could see it now, the average savage going about his day in the stock market and an elusive Gekko type character steps into the fray to completely fuck all participants. Apparently, this “dude” is so big, he bends the market to his will. Participants are going apeshit trying to find him, but cannot.

“Nobody knows anything for sure,” Ozaner said in his office in a picturesque neighborhood on the shores of the Bosporus. “And this is Turkey, where usually we all know what’s going on.”

“Herif,” or “the dude,” has helped lift the average daily trading volume on the Borsa Istanbul almost 8 percent this year, compared with a 15 percent decline on the main exchange in Warsaw and a 27 percent plunge in Moscow, data compiled by Bloomberg show. The Borsa Istanbul 100 Index has advanced 13 percent in the period, outpacing Russia’s Micex and Poland’s WIG20.

Closely held Yatirim Finansman, which handled less than 2 percent of all trades two years ago, now accounts for the majority on some days.

On Feb. 22, for example, the brokerage placed buy orders for 486 million liras ($167 million) of shares, about 15 times more than Merrill Lynch, the second-biggest dealer that day, according to official data. And in the 16 trading days to March 8, it registered almost 1 billion liras of buy orders for Turkey’s six largest banks and Turkish Airlines — helping push the Borsa index to consecutive three-month highs.

In all of January and February, Yatirim Finansman bought a net 1.23 billion liras of stock, almost 70 percent more than the next largest buyer, UBS Menkul Degerler AS. This is why Istanbul Portfolio’s Ozaner said the secretive buyer is now “making the market.”

“There’s a giant bull in the china shop,” said Kerem Baykal, a fund manager who oversees about $610 million at Ak Portfoy. “He’s got deeper pockets than anyone else in the game and can move the market in any direction.”

“The Dude” is straight up fucking with Turkey, a menace of the first magnitude. I hope he fucking destroys the exchange and makes it crumble into pieces.

Stone Energy has drawn down the entirety of its credit facility, amounting to $500 million total, which will now summarily burn in a giant flaming barrel of garbage.

Stone Energy Corporation (NYSE: SGY) today announced that it has borrowed $385 million under Stone’s Bank Credit Facility, which represents substantially all of the remaining undrawn amount that was available under the Credit Facility. These funds are intended to be used for general corporate purposes. As of March 10, 2016, following the funding of this borrowing, the aggregate principal amount of borrowings under the Credit Facility was $477 million. This is in addition to approximately $19 million of outstanding letters of credit. The bank borrowings will initially bear an interest rate of approximately 5 percent. On March 10, 2016, the banks provided notice to Stone under the Credit Facility of a request for a borrowing base redetermination. Stone expects that the borrowing base will be reduced to an amount below the current borrowings.

Chairman, President and Chief Executive Officer David Welch stated, “We felt it important to increase our liquidity in the current low price commodity environment to ensure we have adequate financial flexibility. We will continue to explore various options to strengthen our balance sheet, including alternatives to address our debt position.”

This, undoubtedly, is going to tighten credit at the banks, as oil and gas companies draw down on their credit facilities in record fashion. It’s like a giant run on the banks, all at once.

The bank group includes Bank of America, N.A. as administrative agent; BNP Paribas, Natixis, and the Bank of Nova Scotia as syndication agents; Capital One, N.A. and Toronto Dominion LLC as documentation agents; and Allied Irish Banks p.l.c., Barclays Bank PLC, Regions Bank, U.S. Bank, Whitney National Bank, JPMorgan Chase Bank, N.A. and Sumitomo Mitsui Banking Corporation as participating banks.

Fucked.

Aside from secondaries, expect to see a lot of this. These oil companies set up rich and cheap credit facilities with banks when times were good. Now that they’re all out of money and bleeding out, banks are ruing the day when they decide to tap them.

That day was just thrusted upon BNP Paribas today, by Bonanza Creek.

Co elected to draw down $209 million on its credit facility, and currently has an aggregate of $300 million of borrowings, including a $12 million letter of credit, under the facility. As of March 9, 2016, the Company had $235 million of cash on its balance sheet after taking the recent draw into account.
‘Our recent election to draw down $209 million on our revolver was a risk management decision structured to mitigate exposure to capital market externalities in 2016.’

This is the part of the story when the risk to the balance sheets of the banks expands, exponentially.