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


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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…
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When will there be a coronavirus vaccine? 5 questions answered

Reminder: We are available to chat with Members, comments are found below each post.

 

When will there be a coronavirus vaccine? 5 questions answered

A security guard wears a mask as she keeps watch at arriving passengers at Manila’s international airport in the Philippines on Jan. 23, 2020, as part of efforts to contain the coronavirus. Aaron Favila/AP Photo

Courtesy of Aubree Gordon, University of Michigan and Florian Krammer, ...



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Biotech

When will there be a coronavirus vaccine? 5 questions answered

Reminder: We are available to chat with Members, comments are found below each post.

 

When will there be a coronavirus vaccine? 5 questions answered

A security guard wears a mask as she keeps watch at arriving passengers at Manila’s international airport in the Philippines on Jan. 23, 2020, as part of efforts to contain the coronavirus. Aaron Favila/AP Photo

Courtesy of Aubree Gordon, University of Michigan and Florian Krammer, ...



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Zero Hedge

Stocks Soar To Best Day In 4 Months As "Devil"-Virus Death-Count Spikes

Courtesy of ZeroHedge View original post here.

The death toll in China has soared past 100 while the number of confirmed cases doubled overnight. Health officials around the world have confirmed more than 4,500 cases, more than triple the number from Friday.

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Insider Scoop

JPMorgan Downgrades Beyond Meat On Valuation

Courtesy of Benzinga

One of Beyond Meat Inc's (NASDAQ: BYND) earliest bull analysts downgraded the stock on Tuesday.

The Analyst

Ken Goldman downgraded the plant-based food maker's stock from Overweight to Neutral with a price target lowered from $138 to $134.

The Thesis

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Chart School

Top Patterns for Retail Investors

Courtesy of Read the Ticker

Retail investors are last in line for market leading research, no matter, the retail investor can profit from these secret sauce patterns..

Well not so secret now, the main point is you do not have to climb Mount Everest to be called a mountain climber, there are many other hills to climb to make your mark. Just like stocks.

You do not have to battle with the high frequency traders to win in the markets, there are long and slow methods to do just as well.  

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The Technical Traders

The Wuhan Wipeout - Could It Happen?

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News is traveling fast about the Corona Virus that originated in Wuhan, China. Two new confirmed cases in the US, one in Europe and hundreds in China. As we learn more about thispotential pandemic outbreak, we are learning that China did very little to contain this problem from the start. Now, quarantining two cities and trying to control the potential
outbreak, may become a futile effort.

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Kimble Charting Solutions

Bad News For Crude Oil Should Come From This Pattern, Says Joe Friday

Courtesy of Chris Kimble

It’s a good idea for investors to be aware of key indicators and inter-market relationships.

Perhaps it’s watching the US Dollar as an indicator for precious metals or emerging markets. Or watching interest rates for the economy. Experience, history, and relationships matter. And it’s good to simply add these to our tool-kit.

Today, we look at another relationship that has signaled numerous stock market tops and bottoms over the years, and especially the past several months, Crude Oil.

When crude oil tops or bottoms, it seems that ...



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Members' Corner

The War on All Fact People

 

David Brin shares an excerpt from his new book on the relentless war against democracy and how we can fight back. You can also read the first, second and final chapters of Polemical Judo at David's blog Contrary Brin.

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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,

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Digital Currencies

Cryptos Have Surged Since Soleimani Death, Bitcoin Tops $8,000

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Source: Bloomberg

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Promotions

Free eBook - "My Top Strategies for 2017"

 

 

Here's a free ebook for you to check out! 

Phil has a chapter in a newly-released eBook that we think you’ll enjoy.

In My Top Strategies for 2017, Phil's chapter is Secret Santa’s Inflation Hedges for 2017.

This chapter isn’t about risk or leverage. Phil present a few smart, practical ideas you can use as a hedge against inflation as well as hedging strategies designed to assist you in staying ahead of the markets.

Some other great content in this free eBook includes:

 

·       How 2017 Will Affect Oil, the US Dollar and the European Union

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