Morning lew. Just needed to get away from the circle jerk for a bit :-) On Oct 17, 6:13 am, "[EMAIL PROTECTED]" <[EMAIL PROTECTED]> wrote: > NavyBrat: > > Good morning. > > Didn't expect to see you here. > > On Oct 17, 7:11 am, "[EMAIL PROTECTED]" <[EMAIL PROTECTED]> wrote: > > > > > LoneWolf: > > > Perhaps we should bring to trial both Barney Frank and Chris Dood, > > chairmen of both Congresional banking committees who did nothing in > > regard to their oversite responsibilities of our banking system. > > > No warnings of the impending doom or anything - as they received > > payola from the very banks they were over-seeing. > > > Barney Frank told us in July Fanny Mae and Freeie Mac were in "sound" > > condition. > > > 30 years in jailt would be appropriate. > > > How many thousands of dollars did you lose because of these phonies? > > > On Oct 17, 6:38 am, "\"Lone Wolf\"" <[EMAIL PROTECTED]> wrote: > > > > Armageddon' Loan, Bond Prices Keep Debt Investors on Sidelines > > > > By Pierre Paulden and Caroline Salas > > > > Oct. 17 (Bloomberg) -- Credit markets have fallen so far that they are > > > providing a ``once in a lifetime opportunity,'' and investors are > > > still selling. > > > > Prices of loans rated below investment grade declined to a record low > > > 66.1 cents on the dollar, virtually guaranteeing investors get their > > > money back, based on historical recovery rates, according to data > > > compiled by Standard & Poor's. Yields on corporate bonds show > > > investors expect 5.6 percent of the market will go bust, the highest > > > default rate since the Great Depression, according to Christopher > > > Garman, chief executive officer of debt research firm Garman Research > > > LLC in Orinda, California. > > > > While central banks injected $3 trillion into the global economy, > > > credit markets are tumbling because banks are clamping down on > > > lending, forcing investors to unload assets they bought with borrowed > > > money. The Federal Reserve said Aug. 11 that its quarterly survey > > > shows most ``domestic institutions reported having tightened their > > > lending standards and terms.'' > > > > ``There has been widespread liquidation of assets that has nothing to > > > do with fundamentals,'' said Scott D'Orsi, a partner at Boston-based > > > Feingold O'Keeffe Capital, a hedge fund which has $1.3 billion in > > > assets. ``Investors in bank debt are being presented with a vast > > > number of extraordinary opportunities; opportunities that I would > > > characterize as once in a lifetime.'' > > > > The selling is being compounded by hedge funds and mutual funds > > > dumping holdings to meet redemptions, which may push prices even > > > lower, according to analysts at UBS AG. > > > > Assets Seized > > > > Barclays Plc, the U.K.'s second-biggest bank, is auctioning $642 > > > million of loans seized this week from Dallas-based Highland Capital > > > Management LP, according to people with knowledge of the sale who > > > declined to be identified because the sale hasn't been announced. > > > Hedge funds Tudor Investment Corp., run by Paul Tudor Jones, and SAC > > > Capital Advisors LLC, managed by Steven Cohen, sold assets this month > > > to raise cash as stock prices dropped, according to people with > > > knowledge of the sales. > > > > Barclays spokesman Brandon Ashcraft, and Jack Yang, a partner at > > > Highland, declined to comment. > > > > Prices of high-yield, or leveraged, loans tumbled 22.2 cents since > > > Sept. 9, and are down from 95 cents on the dollar since the start of > > > the year, according to New York-based S&P's LCD unit. Because bank > > > debt holders typically recover about 70 cents on the dollar in > > > bankruptcy, almost every loan in the market would need to default > > > before investors would lose money, LCD said. > > > > `Priced in Armageddon' > > > > Corporate bond prices plunged to 79.9 cents on the dollar on average > > > from 94 cents at the end of August and 99 cents at the end of 2007, > > > according to index data compiled by New York-based Merrill Lynch & > > > Co. > > > > About 90 percent of the market trades like high-yield, high- risk, or > > > junk, debt, Garman said in an Oct. 3 report to clients. Prices imply a > > > 5.6 percent default rate, the most since the record 8.4 percent in > > > 1933, he said. Junk bonds are rated below BBB- by S&P and Baa3 at > > > Moody's Investors Service. > > > > ``It's quite possible that we had priced in Armageddon,'' said Robert > > > Gahagan, head of taxable fixed-income in Mountain View, California at > > > American Century Investment Management, which oversees $23 billion in > > > fixed-income assets. > > > > Wall Street firms have curbed lending after taking $661 billion of > > > credit losses and writedowns since the beginning of last year, > > > according to data compiled by Bloomberg. The collapse last month of > > > Lehman Brothers Holdings Inc., the fourth-largest securities firm, > > > sparked a new round of selling as investors became concerned that more > > > banks may fail. > > > > `The Big Picture' > > > > The sales may hamper efforts by Treasury Secretary Henry Paulson to > > > unlock the credit markets and challenge the next president as a > > > slowing economy drives prices even lower. Industrial output fell 6 > > > percent in the third quarter, the most since 1991, and a factory index > > > for the Philadelphia region hit an 18-year low this month, Federal > > > Reserve figures showed yesterday. > > > > ``The big picture is the economy is just starting to deteriorate,'' > > > said Mark Kiesel, executive vice president at Pacific Investment > > > Management Co., the manager of the world's biggest bond fund. Kiesel > > > runs $180 billion in corporate bonds from Newport Beach, California. > > > ``We still think there are a lot of redemptions and hedge fund > > > liquidations coming.'' > > > > Hedge funds may be forced to dispose of half their $135 billion in > > > high-yield loans to fund redemptions, Stephen Antczak, a UBS credit > > > analyst in Stamford, Connecticut, wrote in an Oct. 10 report to > > > clients. That may send loan prices as low as 60 cents, he said. > > > > No `Turnaround' > > > > ``The de-leveraging that we're witnessing will probably continue,'' > > > said Paul Scanlon, team leader for U.S. high yield and bank loans at > > > Boston-based Putnam Investments LLC, which manages $55 billion in > > > fixed income. ``My sense is that's not turning around in the very near > > > term.'' > > > > The biggest hedge fund run by Citadel Investment Group, which manages > > > $18 billion, fell as much as 30 percent this year because of losses on > > > convertible bonds, stocks and corporate debt, people with knowledge of > > > the returns said. Citadel founder Kenneth Griffin blamed ``reduced > > > availability of credit'' for the declines. > > > > Investors withdrew a record $43 billion from hedge funds in September, > > > according to TrimTabs Investment Research, which has been tracking the > > > data since 2000. The industry had declines of 9.4 percent this year > > > through the end of September, according to Chicago-based Hedge Fund > > > Research Inc., the worst year in two decades. > > > > Commercial Mortgages > > > > For buyers to lose money on some top-rated bonds backed by mortgages > > > on offices, hotels, apartment buildings and other commercial > > > properties, the circumstances would have to surpass the worst > > > conditions on record, according to Darrell Wheeler, global head of > > > securitized strategy at Citigroup Inc. > > > > Commercial-mortgage securities rated AAA that require an unprecedented > > > three-quarters of the underlying loans to default for any loss of > > > principal are trading at about 70 cents, according to New York-based > > > Citigroup. > > > > ``We're not at these prices because of the fundamentals: We threw > > > those out the window a year ago,'' he said. ``This is strictly people > > > want to sell something to raise cash, and it's easy to sell these CMBS > > > because it's a liquid market.'' > > > > Yields on AAA commercial mortgage bonds were at a record 620.7 basis > > > points over benchmark swap rates on Oct. 15, up from 47.8 basis points > > > a year ago, according to Bank of America Corp. A basis point is 0.01 > > > percentage point. > > > > To contact the reporter on this story: Pierre Paulden in New York at > > > [EMAIL PROTECTED]; Caroline Salas in New York at > > > [EMAIL PROTECTED] Hide quoted text - > > > - Show quoted text -- Hide quoted text - > > - Show quoted text - --~--~---------~--~----~------------~-------~--~----~ Thanks for being part of "PoliticalForum" at Google Groups. For options & help see http://groups.google.com/group/PoliticalForum
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