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Post by jeffolie on Jul 26, 2007 12:36:17 GMT -6
"Fahrenheit 1929: The temperature at which liquidity burns." daBear dow down nasdaq down toll bros. down KKD down Gold down Silver down Dollar down 2cents.dailyreckoning.com/viewtopic.php?t=18330The financial mini panic is entirely justified.
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Post by jeffolie on Jul 26, 2007 12:52:54 GMT -6
“The risk of owning bonds of Wall Street firms surged as concerns escalated that investment banks will be hurt by rising losses from subprime mortgages and a freeze in demand for corporate debt.” “Credit-default swaps on $10 million of Goldman Sachs Group Inc. bonds jumped as much as $18,000 to a record $85,000, according to broker Phoenix Partners Group. Bear Stearns Cos. credit swaps surged as much as $29,000 to $110,000, also a new high. Lehman Brothers Holdings Inc. climbed as much as $24,000 to $104,000.” www.bloomberg.com/apps/news?pid=20601087&sid=aJ9xAxPlikwI&refer=home
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Post by jeffolie on Jul 26, 2007 13:25:24 GMT -6
Rumors are that we have a money-center bank in trouble with over 90 BILLION in bridge loans stuck on its balance sheet. This, along with similar rumors of potential bankruptcies in Europe due to the credit crunch, are what is hitting the futures this morning. There's no good way to spin this one guys. It is very likely that once the market opens you will see the Gates of Hell yawn wide, especially if we get any more color on that rumor - like a name. Be careful today. Rumor-driven major events like this look like juicy opportunities on the short side, but in the past have proven to be huge yawning traps on both ends! Remember guys and gals - don't be a pig! market-ticker.denninger.net/
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Post by jeffolie on Jul 26, 2007 14:25:48 GMT -6
The banking index forecasts a Bear Market. stockcharts.com/h-sc/ui?c=$bkx,uu[w,a]dalaynay[pf][iut] Also Donald Coxe, US Portfolio Strategist within the Research Department of BMO Nesbitt Burns, had this to say in early April 2005: "Virtually all severe stock market setbacks are preceded by underperformance of financial stocks, and the selloff tends to continue until the financials start to outperform. 1987 was a classic example of this phenomenon. The sharp underperformance of the NYSE Financials was the warning of coming horrors. ... Regrettably, the NYSE Financials Index was discontinued some years ago; it had a nearly perfect warning record. Its successor, the Philadelphia Banking Index (in place since Aug 1994), seems to have filled its shoes admirably." www.nowandfutures.com/forecast.html#predict_dow
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Post by jeffolie on Jul 26, 2007 14:29:10 GMT -6
What has changed is Credit: Risk appetite for anything less than AAA -- and that includes the ABX stretched definition of AAA -- has waned considerably. Two of the biggest drivers -- Share Buybacks and LBOs -- are now kaput. What is occurring today is a full blown repricing of the liquidity spigot slowly turning off. bigpicture.typepad.com/
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Post by jeffolie on Jul 26, 2007 14:40:00 GMT -6
"About 20 debt sales have been withdrawn or cancelled this summer as investors have turned risk-adverse in response to subprime lending issues, rising global rates and concerns about economic weakness." Tyco withdraws debt sale, Gazprom postpones offering By Leslie Wines Last Update: 2:56 PM ET Jul 26, 2007 NEW YORK - Tyco International Inc. and Russian oil powerhouse Gazprom Thursday became the latest casualties of this week's credit market rout. Tyco (TYC : tyco international ltd shs News , chart , profile , more Last: 48.39-0.60-1.22% 3:11pm 07/26/2007 Delayed quote dataAdd to portfolio Analyst Create alertInsider Discuss Financials Sponsored by: TYC48.39, -0.60, -1.2%) withdrew a $1.5 billion 3-trache offering, citing "unfavorable conditions in the debt markets," according to Action Economics. Separately, Gazprom decided against pricing a 30-year dollar-denomiated eurobond offering, but will wait to see if it can bring the paper to market at a later point, according to media reports. About 20 debt sales have been withdrawn or cancelled this summer as investors have turned risk-adverse in response to subprime lending issues, rising global rates and concerns about economic weakness. www.marketwatch.com/news/story/tyco-withdraws-debt-sale-gazprom/story.aspx?guid=%7B9F7725D4%2D2B6F%2D492D%2D9C31%2D53D20C899E61%7D&dist=hplatest
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Post by jeffolie on Jul 26, 2007 14:42:26 GMT -6
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Post by unlawflcombatnt on Jul 26, 2007 15:24:11 GMT -6
From my count, there were 31 bond deals either delayed or canceled, 4 were announced today, and 3 were announced yesterday. We can almost say goodbye to leveraged buyouts. If not goodbye, than at least a drastic reduction.
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Post by jeffolie on Jul 26, 2007 17:37:57 GMT -6
97% decline of high-yield issuance..... The market for riskier forms of credit seems to have come to a complete halt. US issuance of high-yield, or low-quality, debt stayed below $1bn for the third successive week, according to Thomson Financial. The last week of June brought $9.7bn of high-yield issuance; by last week that had fallen to $322m. This financing is crucial for private equity deals. The D word: “As a minimum the thing we are in little doubt about now is that having a huge derivative credit market does not give us a new paradigm of permanently tighter spreads, but instead a potentially violent and volatile credit market.” www.ft.com/cms/s/3e9f9006-3ba4-11dc-8002-0000779fd2ac.html
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Post by unlawflcombatnt on Jul 26, 2007 19:32:55 GMT -6
Here's a great graph from that FT article, showing both the Housing Crash and the ABX BBB crash. The previous charts show about the same path as the year-over-year graph of Leading Indicators-- which went from +8% year-over-year in 2004 to 0% year-over-year in 2007. If enough individual sectors of the economy are on the same sharp downward trajectory, it puts the entire economy on the same trajectory.
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