Brent Nyitray
Fairlington Blade
Let the mutherfuker burn!
jnc4p
Kevin S. Willis
Michigoose
lmsinca
markinaustin
Arcanaut
novahockey
quarterback
ScottC
yellojktVital Statistics:
| Last | Change | Percent | |
| S&P Futures | 1347.8 | 0.8 | 0.06% |
| Eurostoxx Index | 2535.2 | 22.2 | 0.88% |
| Oil (WTI) | 99.73 | 1.0 | 1.03% |
| LIBOR | 0.51 | -0.003 | -0.63% |
| US Dollar Index (DXY) | 78.556 | -0.182 | -0.23% |
| 10 Year Govt Bond Yield | 2.04% | 0.06% |
Markets are up slightly on a better than expected initial jobless report. Initial Jobless claims were 358k last week versus 370k expected. The ECB maintained rates and Draghi sounded bearish tones regarding the European economy. Headlines are coming across right now that claim Greek leaders have agreed on an austerity package.
Bloomberg is reporting (on the pay site, not the free site) that the price of Bakken shale oil has fallen out of bed (down 25%) in the last week. There are no futures contracts on Bakken so it can’t be traded, but it demonstrates how volatile oil can be. The reason seems to be a lack of demand from the refineries, so the oil is backing up with nowhere to put it. Refineries are probably changing over from heating oil production to gasoline production right about now. I plotted the prices of Brent, WTI, and Bakken oil over the past year so you can see the volatility.
It looks like we have a settlement with the banks and the state AG’s over foreclosures. $26 billion from 5 banks. $20 billion is to be used to cut principal balances and to refi current, but underwater, homeowners. So, of the AGs and the banks, who won? Both. The AGs get their scalp, and the banks will be able to count losses already taken towards the settlement. (You owe $100 on your $70 home. I’ll be a nice guy and cut your principal to $90. Of course, I probably am already carrying the loan at 90 on my books anyway). On the refis, the banks will be simply cutting the interest rate on a $100 loan, which stays marked at $100. So no write downs there either. My guess is this will be earnings-neutral near term and may cause analysts to take down next year’s numbers a little. But that’s it. So you might want to resist the urge to take some SKFs (Proshares Ultrashort Financial ETF) on the open.
Will it help support the housing market? Maybe at the margin. It is no silver bullet – consider my example above – will the homeowner who now owes $90 instead of $100 go out and spend more money? Probably not. Plus a chunk of this is simply a direct transfer from the government to borrowers since Ally Bank (the old GMAC) is owned by the government.
Filed under: Economic data, Foreclosure, housing, Shale Oil |
All Things in Moderation 
“The European Central Bank left its key interest rate unchanged at 1 percent on Thursday but President Mario Draghi hinted at relaxed rules for banks taking part in a long-term refinancing operation at the end of the month, boosting hopes that additional liquidity will be injected in the system.”
“The Bank of England voted to inject another 50 billion pounds ($79.3 billion) into the financial system as part of its efforts to shore up a fragile recovery in the economy, which remains at risk of slipping back into recession.”
Money priinting is in vogue ladies and gentlemen!
“At our request, William Bernstein, an investment manager at Efficient Portfolio Advisors in Eastford, Conn., reviewed Rep. Paul’s portfolio as set out in the annual disclosure statement. Mr. Bernstein says he has never seen such an extreme bet on economic catastrophe. ”This portfolio is a half-step away from a cellar-full of canned goods and nine-millimeter rounds,” he says.
There are many possible doomsday scenarios for the U.S. economy and financial markets, explains Mr. Bernstein, and Rep. Paul’s portfolio protects against only one of them: unexpected inflation accompanied by a collapse in the value of the dollar. If deflation (to name one other possibility) occurs instead, “this portfolio is at great risk” because of its lack of bonds and high exposure to gold.”
So do you think the idiot quoted has enough sense to be chagrined? LOL
LikeLike
I thought I heard on NPR that greece agreed yo austerity, enabling a bailout deal; DAX up as a result. What’s the impact to the US?
LikeLike
I don’t think it matters one way or the other. I wouldn’t trade it, if that is what you’re asking.
LikeLike
” . I wouldn’t trade it, if that is what you’re asking.”
Not me. I’m a buy & hold kind of guy. I don’t have the time, inclination or knowledge to be a market timer.
LikeLike
Is there a deal in the works or rumored for a sale of Ally to a private bank or investment group?
LikeLike
I think the government wants to IPO Ally, but realizes that they won’t get a great price for it in this environment
LikeLike
Chyrsler will test the waters this year for sure also.
LikeLike
I would mention JIm Cramer here at the risk of general derision. He was right as rain the other night though about the “sliver” IPOs that are coming out, and that SEC should step in. They’re functionally equivalent to the famous “tracking stocks” of the dot com era. Caesars picked up a boatload of fools this week like that.
LikeLike
A Fiat / Chrysler stub trade will give the arbs something to do.
LikeLike
“Tracking stocks” – if that isn’t a “top of the bubble” issue, I don’t know what is. Sort of like “toggle notes” were the top of the credit bubble.
LikeLike
brent:
Does Fiat issue bonds in this market?
LikeLike
Chrysler is trying to issue 1.8 billion in senior secured debt. Don’t know about Fiat.
LikeLike