Trading Now

Trading Now

Monday, December 7, 2009


*these guys are too much aren't they? This bank bailout crisis has cost US taxpayers well over $12T. Start reading all the fine print. Who do you think has been buying all of the bad toxic debt from bondholders out there? YOU STUPID!
Treasury says TARP to cost $200 billion less than expected
The U.S. Treasury had estimated that the Troubled Asset Relief Program would cost taxpayers about $341 billion, but it is saying the cost will be at least $200 billion less. "That improvement is driven by the fact that Treasury's investments to stabilize the system are delivering higher returns than anticipated and that Treasury does not anticipate having to draw upon the full $700 billion in TARP authority," a Treasury official said. Reuters (07 Dec.)

Dubai World debt restructuring a test of sukuk framework
Dubai World's debt-restructuring request is expected to raise questions among investors and issuers regarding Shariah-compliant bonds. "This will mark the first test of the legal framework underpinning sukuk in general, and it could therefore have implications for Islamic fundraising globally," said Fahd Iqbal, an analyst at EFG Hermes, a Middle Eastern investment bank. Bankers are also speculating that the Dubai World situation will delay revival of the Islamic financing market. (07 Dec.)

*how can this be possible? It can't! When these jokers invested at the height of the crisis still had Citigroup at around $7. Even the preferreds, which is likely what SWF bought into, got hammered. So I guess the real story is, uh, we lost our $3B investment but we made back $1.1B so we must be ok right? Thats like you ijiots in mutual funds saying, well, I was down 50% but I made it back since March. NOT! Even though the market has had a near 50% retracement from its March lows, you need to make back 100% in order to break even. Gotta love the magic of numbers eh?
SWFs are well-paid for investing in troubled U.S. banks
Sovereign-wealth funds that stepped up and put capital into shaky U.S. banks during the financial crisis booked some healthy profit on their investment. The government of Kuwait said it made a $1.1 billion profit on its stake in Citigroup, which works out to a 37% annualized return. Funds in Qatar, Singapore and Abu Dhabi, United Arab Emirates, reported similar gains on their investment in foreign financial institutions. The New York Times (06 Dec.)

CRE loans make it difficult for small banks to escape TARP
Regional banks may not be able to escape the Troubled Asset Relief Program as a result of bad commercial real estate loans. "Community and regional banks basically became real estate banks in the past 25 years, and now real estate is on its back," said Jeff Davis, an analyst at FTN Equity Capital Markets Corp. The problems come as big, national banks exit the TARP. Bloomberg (12/7)

*when the VIX is low YOU GO.......
Analysis: Volatility index suggests investor complacency
Investors have gotten complacent, as evidenced by the stock market's recent return to normal levels of volatility, Mark Gongloff writes in a Wall Street Journal commentary. The Chicago Board Options Exchange's VIX index closed to nearly its lowest level in over a year on Friday. "We're going to have a sustained level of volatility going forward," says Milton Balbuena, co-chief investment strategist at Contango Capital Advisors in San Francisco. "Rallies and meltdowns will be part of the process." The Wall Street Journal (12/7)

*we all knew Goldman was lying through their bonus' and Geithner knew it then too, he's just trying to save his arse.
Geithner: Entire financial system at risk at height of crisis
Goldman Sachs executives, including CEO Lloyd Blankfein, said the company did not need the government's aid to survive the financial crisis. Treasury Secretary Timothy Geithner responded, saying the entire financial system was threatened at the height of the crisis. "The entire U.S. financial system and all the major firms in the country, and even small banks across the country, were at that moment at the middle of a classic run, a classic bank run," Geithner said. Goldman Sachs, JPMorgan Chase, Morgan Stanley and others have since returned the government's funds with interest. Bloomberg (12/5)

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