Posts Tagged ‘asset-backed securities’

Congratulations, You Idiots, You Broke the Bond Market

Congratulations, You Idiots, You Broke the Bond Market

Courtesy of Jr. Deputy Accountant

 pic credit: snphillips via Etsy

h/t WC Varones who beat me to it

It smells like Sarbanes-Oxley: a poorly thought-out, bureaucracy-heavy piece of garbage that inconveniences everyone but the legislators who want to get reelected by making it appear as though they are effectively doing their jobs. I’m waiting patiently for someone to say there is a PCAOB of rating agencies buried in this financial reform beast (I still have yet to read the entire thing but hey, I’m probably through more of it than the asshats who voted for it ever got) and not at all surprised to hear that it’s already creating unintended drama.

WSJ:

The nation’s three dominant credit-ratings providers have made an urgent new request of their clients: Please don’t use our credit ratings.

The odd plea is emerging as the first consequence of the financial overhaul that is to be signed into law by President Obama on Wednesday. And it already is creating havoc in the bond markets, parts of which are shutting down in response to the request.

Standard & Poor’s, Moody’s Investors Service and Fitch Ratings are all refusing to allow their ratings to be used in documentation for new bond sales, each said in statements in recent days. Each says it fears being exposed to new legal liability created by the landmark Dodd-Frank financial reform law.

The new law will make ratings firms liable for the quality of their ratings decisions, effective immediately. The companies say that, until they get a better understanding of their legal exposure, they are refusing to let bond issuers use their ratings.

I remind dear reader that Congress may appear absolutely clueless but actually knows more than we give them credit for. I’m fairly certain the jackasses who wrote the thing knew exactly what can of worms they were opening at the time.

WSJ continues:

That is important because some bonds, notably those that are made up of consumer loans, are required by law to include ratings in their official documentation. That means new bond sales in the $1.4 trillion market for mortgages, autos, student loans and credit cards could effectively shut down.

There have been no new asset-backed bonds put on sale this week, in stark contrast to last week, when


continue reading


Tags: , , , , , , , , ,




Obama’s Financial System Overhaul Would Give the Fed Broad Powers Over Wall Street

Obama’s Financial System Overhaul Would Give the Fed Broad Powers Over Wall Street

Courtesy of Don Miller, Associate Editor, Money Morning 

U.S. President Barack Obama took a swipe at Wall Street yesterday (Wednesday) as he unveiled a sweeping 85-page proposal to reinvigorate government regulation of the U.S. financial markets by giving the Federal Reserve new powers to supervise the economy.

The proposal is part of an effort by the Obama administration to restore confidence in the nation’s financial system after last year’s collapses of The Bear Stearns Cos. and Lehman Brothers Holdings Inc. (OTC: LEHMQ). The failures of those two institutions caused a credit-market seizure that froze bank lending and paralyzed consumer spending – resulting in a near collapse of the U.S. economy. Those economic woes subsequently infected other economies throughout the world, forcing central governments from Washington to Beijing to rollout out hundreds of billions of dollars of stimulus packages.

President Obama’s comprehensive plan contains reforms aimed at almost every facet of the financial system, including the asset-backed securities and credit derivatives that are widely blamed for nearly bringing down the banking sector. Prior to releasing the proposals, President Obama singled out Wall Street for overreacting to government intervention in the financial markets. One of the administration’s most-heavily criticized moves was the limits it placed on executive compensation.

"Wall Street seems to maybe have a shorter memory about how close we were to the abyss than I would have expected," President Obama told Bloomberg News in an interview before the plan was released.

"When I hear some of the commentary that’s been creeping up about, ‘You know, it’s time for government to get out of the economy. And what’s the Obama administration doing?’ I have to try to remind them – all we’re doing is cleaning up after the mess that was made [by Wall Street]," Obama said.

Derivatives and Hedge Funds Under the Microscope

Obama pledged to bring more transparency to the murky derivatives market, which he called a system of "enormous risk." The proposal also promises further regulation of mortgage-backed securities, which fueled the housing bubble and ignited last fall’s credit crisis.

"Derivatives are a huge potential risk to the system," President Obama said. "We are going to make sure that they have to register, that they are regulated, that you have clearinghouses." Derivatives are defined as "contracts whose values are tied to assets…
continue reading


Tags: , , , , ,




 
 
 

Phil's Favorites

Here's how scientists are tracking the genetic evolution of COVID-19

 

Here's how scientists are tracking the genetic evolution of COVID-19

Why do scientists care about mutations on the coronavirus? Alexandr Gnezdilov Light Painting

Niema Moshiri, University of California San Diego

When you hear the term “evolutionary tree,” you may think of Charles Darwin and the study of the relationships between different species over the span of millions of years.

While the concept of an “evolutionary tree” originated in Darwin’s “...



more from Ilene

Biotech/COVID-19

Here's how scientists are tracking the genetic evolution of COVID-19

 

Here's how scientists are tracking the genetic evolution of COVID-19

Why do scientists care about mutations on the coronavirus? Alexandr Gnezdilov Light Painting

Niema Moshiri, University of California San Diego

When you hear the term “evolutionary tree,” you may think of Charles Darwin and the study of the relationships between different species over the span of millions of years.

While the concept of an “evolutionary tree” originated in Darwin’s “...



more from Biotech/COVID-19

Zero Hedge

"They've Left Me High And Dry": Here Is The Real Reason Companies Have Drawn Down A Record $293 Billion In Revolvers

Courtesy of ZeroHedge View original post here.

One week ago, we reported that starting exactly one month ago on March 5, an unprecedented wave of corporate revolver draws was unleashed, resulting in what JPMorgan calculated was a record $208BN in revolving credit facilities being fully drawn (for the full list of companies see ...



more from Tyler

ValueWalk

AZO and ORLY: Which one is a better buy?

By Marek Mscichowski. Originally published at ValueWalk.

AutoZone, Inc. (NYSE:AZO) and O’Reilly Automotive Inc (NASDAQ:ORLY): Both auto parts retailers are uncorrelated to S&P 500, but which one is a better buy?

By Price Earnings Ratio Tracker Team

Q4 2019 hedge fund letters, conferences and more

Over recent months I have created valuation models for the two main competitors in the auto parts retail business – AutoZone, the leader on the coasts with a $26 billion market ca...



more from ValueWalk

Kimble Charting Solutions

S&P Repeating 2000 & 2007 Patterns Almost Exactly?

Courtesy of Chris Kimble

Does History Repeat? Is does rhyme sometimes!!!

This chart looks at the S&P 500 on a weekly basis over the past 20-years.

The S&P declined by 50% during the 2000-2003 bear market. On the week of 3/23/2001, it experienced its first counter-trend rally, which lasted 8-weeks, before the bear market resumed.

The S&P declined by 50% during the 2007-2009 bear market. On the week of 3/21/2001, it experienced its first counter-trend rally, which lasted 8-weeks, before the bear ...



more from Kimble C.S.

Insider Scoop

Economic Data Scheduled For Friday

Courtesy of Benzinga

  • Data on nonfarm payrolls and unemployment rate for March will be released at 8:30 a.m. ET.
  • US Services Purchasing Managers' Index for March is scheduled for release at 9:45 a.m. ET.
  • The ISM's non-manufacturing index for March will be released at 10:00 a.m. ET.
  • The Baker Hughes North American rig count report for the latest week is scheduled for release at 1:00 p.m. ET.
...

http://www.insidercow.com/ more from Insider

The Technical Traders

Founder of TradersWorld Magazine Issued Special Report for Free

Courtesy of Technical Traders

Larry Jacobs owner and editor of TradersWorld magazine published a free special report with his top article and market forecast to his readers yesterday.

What is really exciting is that this forecast for all assets has played out exactly as expected from the stock market crash within his time window to the gold rally, and sharp sell-off. These forecasts have just gotten started the recent moves were only the first part of his price forecasts.

There is only one article in this special supplement, click on the image or link below to download and read it today!

...

more from Tech. Traders

Chart School

Big moving Averages and macro investment decisions

Courtesy of Read the Ticker

When price is falling every one wonders where demand will come in.


RTT black screen Tv videos study the simplest measure of price (simple moving average). What has happen before guides us now. 














Changes in the world is the source of all market moves, to catch and ride the change we believe a combination of Gann Angles, ...

more from Chart School

Members' Corner

10 ways to spot online misinformation

 

10 ways to spot online misinformation

When you share information online, do it responsibly. Sitthiphong/Getty Images

Courtesy of H. Colleen Sinclair, Mississippi State University

Propagandists are already working to sow disinformation and social discord in the run-up to the November elections.

Many of their efforts have focused on social media, where people’s limited attention spans push them to ...



more from Our Members

Digital Currencies

While coronavirus rages, bitcoin has made a leap towards the mainstream

 

While coronavirus rages, bitcoin has made a leap towards the mainstream

Get used to it. Anastasiia Bakai

Courtesy of Iwa Salami, University of East London

Anyone holding bitcoin would have watched the market with alarm in recent weeks. The virtual currency, whose price other cryptocurrencies like ethereum and litecoin largely follow, plummeted from more than US$10,000 (£8,206) in mid-February to briefly below US$4,000 on March 13. Despite recovering to the mid-US$6,000s at the time of writin...



more from Bitcoin

Promotions

Free, Live Webinar on Stocks, Options and Trading Strategies

TODAY's LIVE webinar on stocks, options and trading strategy is open to all!

Feb. 26, 1pm EST

Click HERE to join the PSW weekly webinar at 1 pm EST.

Phil will discuss positions, COVID-19, market volatility -- the selloff -- and more! 

This week, we also have a special presentation from Mike Anton of TradeExchange.com. It's a new service that we're excited to be a part of! 

Mike will show off the TradeExchange's new platform which you can try for free.  

...

more from Promotions

Lee's Free Thinking

Why Blaming the Repo Market is Like Blaming the Australian Bush Fires

 

Why Blaming the Repo Market is Like Blaming the Australian Bush Fires

Courtesy of  

The repo market problem isn’t the problem. It’s a sideshow, a diversion, and a joke. It’s a symptom of the problem.

Today, I got a note from Liquidity Trader subscriber David, a professional investor, and it got me to thinking. Here’s what David wrote:

Lee,

The ‘experts’ I hear from keep saying that once 300B more in reserves have ...



more from Lee

Mapping The Market

How IPOs Are Priced

Via Jean Luc 

Funny but probably true:

...

more from M.T.M.





About Phil:

Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

Learn more About Phil >>


As Seen On:




About Ilene:

Ilene is editor and affiliate program coordinator for PSW. Contact Ilene to learn about our affiliate and content sharing programs.