Archive for December, 2015

The Only Perfect Hedge is in a Japanese Garden

Saturday, December 12th, 2015

Via Bloomberg: Tracy Alloway December 11, 2015 — 7:49 AM EST Credit investors hoping that the revamp of a popular derivatives index would make it a better hedge for their portfolios of corporate bonds say they've been left disappointed. Markit, the owner of the CDX High-Yield, unveiled an overhaul of the derivatives index in ...

Hilsenrath on Fed and Commercial Real Estate Bubble

Saturday, December 12th, 2015

Via the WSJ: By Jon Hilsenrath and David Harrison Updated Dec. 11, 2015 8:56 p.m. ET Federal Reserve officials participating in a “war game” exercise this year came to a disturbing conclusion: Six years after the financial crisis ended, the central bank remained ill-equipped to quell the kind of dangerous asset bubbles that destabilized ...

Prescient Comment

Friday, December 11th, 2015

I was looking back at some ancient posts on this blog from back in 2009 and came across this one from one reader:   By David on Feb 28, 2009 | Reply | Edit I would be interested in knowing what you think about Puerto Rican general obligation bonds. They are on the ...

Loosening the Peg

Friday, December 11th, 2015

I published this earlier today on this topic. Via the WSJ: By Lingling Wei Updated Dec. 11, 2015 7:40 p.m. ET 15 COMMENTS BEIJING—China’s central bank signaled its intention to change the way it manages the yuan’s value by potentially easing its loose peg to the U.S. dollar and instead letting it track the currencies ...

Credit Market Update

Friday, December 11th, 2015

I just talked some corporate bond market participants and it is very ugly in some sectors of that market with parts of the energy market doing an excellent imitation of 2008. Devon Energy is a Baa1 credit at Moody's and that firm sold $800 million 10 year bonds yesterday. Timing ...

Weekend Data Preview

Friday, December 11th, 2015

Via Robert Sinche at Amherst Pierpont Securities: CHINA: Major economic releases over the weekend, most likely on Saturday night EST. The BBerg consensus expects the recent trends in China – and globally – will continue with relative strength in retail spending but softness in production growth. The consensus expects Retail Sales ...

Yuan

Friday, December 11th, 2015

Via Robert Sinche at Amherst Pierpont Securities: The Wall Street Journal is reporting that China is planning (again) to link its currency to a basket of currencies rather than what has generally been a peg to the USD. China discussed this approach a number of years ago, but then the USD ...

Consumer Confidence

Friday, December 11th, 2015

Via Millan Mulraine at TDSecurities:   TD SECURITIES DATAFLASH US:  Consumer Confidence Shows Modest Improvement *        Consumer confidence continues to inch gradually higher, with the Michigan index rising modestly in December. *        The gain marks the third consecutive monthly rise in this indicator, though it remains well below recent ...

PPI

Friday, December 11th, 2015

Via Stephen Stanley at Amherst Pierpont Securities: The November PPI was considerably firmer than anticipated.  Both the headline and core indices increased by 0.3%, vs. consensus estimates of flat and up 0.1% respectively.  Relative to my forecast, energy prices were actually softer than projected, as wholesale gasoline prices fell yet again ...

What to Watch Today (Lots)

Friday, December 11th, 2015

Via Bloomberg: WHAT TO WATCH: * (All times New York) * Economic Data * 8:30am: Retail Sales Advance m/m, Nov., est. 0.3% (prior 0.1%) * NOTE: U.S. Retail Sales Seen Having Edged Higher in Nov. * Retail Sales Ex Auto m/m, Nov., est. 0.3% (prior 0.2%) * Retail Sales Ex Auto and Gas, Nov., est. 0.4% (prior 0.3%) * Retail Sales ...