Archive for August, 2009

Credit Market Overview
August 17, 2009
Just one week after the unemployment rate dropped to 9.4% and the dismal scientists were jacking 2H09 GDP forecasts left, right and center, the University of Michigan Confidence index comes out 5.8pts lower than expected and it’s “look out below!”  All of a sudden everyone is seeing potholes on what just… »

Credit Market Overview
August 14, 2009
Charles Dow, co-founder of Dow Jones and Company, wrote a collection of 225 editorials in the Wall Street Journal between 1851-1902 that, after his death, were collected, organized and represented as the “Dow Theory”.  It is, in essence, a combination of what is now known as technical analysis combined with what… »

Credit Market Overview
August 13, 2009
No sooner had the Fed’s rate announcement come out yesterday than the swarm of pundits, talking heads and ex-Fed officials began parsing each statistic, paragraph, sentence and punctuation mark of what was said in order to discern what might be lurking in the back of good Dr. Bernanke’s and the Fed’s… »

Credit Market Overview
August 12, 2009
The market, it seems, has reached one of those points where, like a ball tossed up, it is suspended for a moment neither rising of falling.  Unlike a ball however, the market can gather itself move higher again or like the ball succumb to gravity and fall from its apex.
These periods… »

Credit Market Overview
August 11, 2009
The negative correlation that exists between, movement in the spread between the risk free rate and the yield on an individual company’s debt vs. its equity price is the product of changes with the balance sheet that eventually effect the income statement.  Or, as they say, when the outflow exceeds the… »

Credit Market Overview
August 10, 2009
Each day the basis for this piece is the cross asset relationship between credit spreads and equity prices.  At times that is accomplished from a slightly higher altitude with a look at macro factors affecting entire economies vs. the CDS/equity relationship of a specific company.
Given an interesting occurrence on Friday I… »

Credit Market Overview
August 7, 2009
With skill and a big enough bankroll, you don’t always need the strongest hand to win the round in poker.  China has the bankroll and is a nation of people legendary for their gaming ability.  Given this it was interesting that the Treasury Department announced that they will increase the amount… »

Credit Market Overview
August 6, 2009
Bull markets, they say, climb a wall of worry.  Bear market rallies . . . I don’t know what they say about them, but if this is the former there most certainly seems as if there is enough to worry about and if it is the latter, my vote would be… »

Credit Market Overview
August 5, 2009
The economic news recently: GDP, car sales, ISM etc. continue to redefine “less bad” and in some cases might have morphed into what might next be called “almost, maybe, possibly, slightly good” although I hesitate to inject too much optimism into the interpretation.
CDS spreads and the stock market have responded with… »

Credit Market Overview
August 4, 2009
Isaac Newton taught us that what goes up must come down.  When that “what” is an airplane we can only hope that the up and down go smoothly.  For the most part it appears the airlines have figured out how to manage the ascent and descent of their planes.  Where they… »