Posts Tagged ‘Corporate Bankruptcies’

Preserve and Protect: Mapping The Tipping Points

Preserve and Protect: Mapping The Tipping Points

Courtesy of Gordon T Long of Tipping Points

The economic news has turned decidedly negative globally and a sense of ‘quiet before the storm’ permeates the financial headlines. Arcane subjects such as a Hindenburg Omen now make mainline news. The retail investor continues to flee the equity markets and in concert with the institutional players relentlessly pile into the perceived safety of yield instruments, though they are outrageously expensive by any proven measure. Like trying to buy a pump during a storm flood, people are apparently willing to pay any price.  As a sailor, it feels like the ominous period where the crew is fastening down the hatches and preparing for the squall that is clearly on the horizon. Few crew mates are talgking as everyone is checking preparations for any eventuality. Are you prepared?

What if this is not a squall but a tropical storm, or even a hurricane? Unlike sailors, the financial markets do not have the forecasting technology for protection against such a possibility. Good sailors before today’s technology advancements avoided this possibility through the use of almanacs, shrewd observation of the climate and common sense. It appears to this old salt that all three are missing in today’s financial community.

Looking through the misty haze though, I can see the following clearly looming on the horizon.

Since President Nixon took the US off the Gold standard in 1971, the increase in global fiat currency has been nothing short of breath taking. It has grown unchecked and inevitably has become unhinged from world industrial production and the historical creators of real tangible wealth.

Do you believe trees grow to the sky?
Or, is it you believe you are smart enough to get out before this graph crashes?

Apparent synthetic wealth has artificially and temporarily been created through the production of paper. Whether Federal Reserve IOU notes (the dollar) or guaranteed certificates of confiscation (treasury notes & bonds), it needs to never be forgotten that these are paper. It is not wealth. It is someone else’s obligation to deliver that wealth to the holder of the paper based on what that paper is felt to be worth when the obligation is required to be surrendered. It must never be forgotten that fiat paper is only a counter party obligation to deliver. Will they?…
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Corporate Bankruptcies Slow With Thaw In Lending

Corporate Bankruptcies Slow With Thaw In Lending

Courtesy of Mish

Businessman Climbing Out of Swimming Pool

Corporations have managed to forestall bankruptcy with new waves of refinancing. Please consider Bankruptcy Rise Slows With Thaw In Lending.

Corporate failures have slowed, as companies once on the verge of default have found a new life. These companies are now refinancing their balance sheets with new debt, pushing out maturities on existing loans or using distressed-debt exchanges to avoid a bankruptcy filing.

Speculative-grade companies — or those with "junk" credit ratings — have issued about $123 billion in new bonds this year, compared with roughly $48 billion in all of last year, according to data provider Dealogic. That’s on pace to challenge 2006′s record issuance of more than $143 billion, Barclays Capital analysts said late last week.

Many analysts worry the refinancing wave is just "kicking the can" down the road, without fundamentally fixing companies’ deeper problems. Among weaker companies, about $1.4 trillion in bonds and loans will still come due in the next five years, said Dominic DiNapoli of FTI Consulting, a business advisory firm.

Despite the lull in corporate failures, there have been signs in recent weeks that bankruptcies could tick upward again. There have been several high-profile filings, including Capmark Financial and CIT. Already, five big companies have filed in November.

It remains unclear "how long the window will stay open" for weaker companies to borrow, said Barclays Capital restructuring chief Mark Shapiro. "Six months ago, no one thought that many of these companies could access the high-yield market." For the time being, he said, it’s helping a lot of companies avoid "bankruptcies that would have otherwise occurred in the next year."

Distressed companies were shut out of credit markets in the winter as investors demanded yields on junk bonds that typically exceeded 20%. Now, average yields are closer to 10%, according to the Merrill Lynch U.S. High-Yield Master II Index.

According to the article, casino operators Harrah’s and MGM Mirage, homebuilder Beazer Homes, Michaels Stores, and Ford were all able to roll over their debt.

Given rampant overcapacity everywhere, all this does is postpone the problems. Thus, bankruptcies will come later rather than sooner. However, as I have said before, as long as the corporate bond market remains healthy, equities are likely to fetch a bid.

Still, most of those companies


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Phil's Favorites

LNG Shipper Flex LNG

 

Transformity's Tobin Smith is highlighting LNG Shipper Flex LNG (FLNG) today for his subscribers and us. The company goes ex-dividend tomorrow, so he's also suggesting reading this article and, if you're interested, buying shares today under $25. 

LNG Shipper Flex LNG

Courtesy of Tobin Smith, Editor-in-Chief, Transformity Investor PRO

Investment Idea: Buy $FLNG under $25 with $30-$34 target (buy today, shares go ex-dividend tomorrow) 

We have been waiting patiently for Flex LNG (too patiently, actually) to increase their nearly 3% dividend to what made sense given the huge demand for LNG imports into Europe and Asia (especially China) and our cash flow estimates.  Well...in the last few days, FLNG raised their dividend by 80%. If we act quickly, we can lock about a $3/...



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Zero Hedge

Risk Assets Don't Have A Central Bank Superhero This Time

Courtesy of ZeroHedge View original post here.

By Michael Read, Bloomberg Markets Live commentator and reporter

Why hasn’t risk bounced?

Why hasn’t there been a large troupe of dip buyers at the ready after Friday’s rout? 

There are three main factors behind the underwhelming price action so far this week:

  1. The emergence of previous variants has come as central bankers were roughly midway through an easing program: there was a backdrop of asset purchases and dovish forward guidance to placate an angsty market. This time not so much, and while policy makers may twe...



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Biotech/COVID-19

Omicron: why the WHO designated it a variant of concern

 

Omicron: why the WHO designated it a variant of concern

Courtesy of Ed Feil, University of Bath

The World Health Organization (WHO) has announced that the B.1.1.529 lineage of Sars-CoV-2, thought to have emerged in southern Africa, is to be designated as a variant of concern (VoC) named omicron. This decision has already precipitated a broad shift in priorities in pandemic management on a global scale.

The WHO has recommended, among other things, increased surveillance, particularly virus genome sequencing; focused research to understand the dangers posed by this...



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Politics

The first Thanksgiving is a key chapter in America's origin story - but what happened in Virginia four months later mattered much more

 

The first Thanksgiving is a key chapter in America’s origin story – but what happened in Virginia four months later mattered much more

In the 19th century, there was a campaign to link the Thanksgiving holiday to the Pilgrims. Bettman/Getty Images

Courtesy of Peter C. Mancall, USC Dornsife College of Letters, Arts and Sciences

This year marks the 400th anniversary of the first Thanksgiving in New England. Remembered and retold as an allegory for perseverance and cooper...



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Chart School

Gold and Silver still working higher

Courtesy of Read the Ticker

Using Gann Angles from zero we can time the next run up, and it is near.

The last two days gold and silver are down on the back of central bankers talking the US Dollar higher in a attempt to off set inflation. A rising dollar is a form of tightening. Also the talk of a faster 'taper' has sent interest rates higher. But Luke Gromen knows this cant not last.

@LukeGromen Externally-financed twin deficit nations with insufficient external financing (ie the US, not Japan) cannot abide rising real rates for long.


RTT Comments: What this means a higher US Dollar makes it harder for those outside the US to buy the vast quantity of US Treasuries. 


U...

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Digital Currencies

Stablecoins: these cryptocurrencies threaten the financial system, but no one is getting to grips with them

 

Stablecoins: these cryptocurrencies threaten the financial system, but no one is getting to grips with them

Safe as houses? iQoncept

Courtesy of Jean-Philippe Serbera, Sheffield Hallam University

Cryptocurrencies have had an exceptional year, reaching a combined value of more than US$3 trillion (£2.2 trillion) for the first time in November. The market seems to have benefited from the public having tim...



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Promotions

Phil's Interview on Options Trading with TD Bank

TD Bank's host Bryan Rogers interviewed Phil on June 10 as part of TD's Options Education Month. If you missed the program, be sure to watch the video below. It should be required viewing for anyone trading or thinking about trading using options. 

Watch here:

TD's webinar with Phil (link) or right here at PSW

Screenshots of TD's slides illustrating Phil's examples:

 

 

&n...



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Kimble Charting Solutions

Crude Oil Cleared For Blast Off On This Dual Breakout?

Courtesy of Chris Kimble

Is Crude Oil about to blast off and hit much higher prices? It might be worth being aware of what could be taking place this month in this important commodity!

Crude Oil has created lower highs over the past 13-years, since peaking back in 2008, along line (1).

It created a “Double Top at (2), then it proceeded to decline more than 60% in four months.

The countertrend rally in Crude Oil has it attempting to break above its 13-year falling resistance as well as its double top at (3).

A successful breakout at (3) would suggest Crude Oil is about to mo...



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ValueWalk

Managing Investments As A Charity Or Nonprofit

By Anna Peel. Originally published at ValueWalk.

Maintaining financial viability is a constant challenge for charities and nonprofit organizations.

Q4 2020 hedge fund letters, conferences and more

The past year has underscored that challenge. The pandemic has not just affected investment returns – it’s also had serious implications for charitable activities and the ability to fundraise. For some organizations, it’s even raised doubts about whether they can continue to operate.

Finding ways to generate long-term, sustainable returns for ...



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Mapping The Market

Suez Canal: Critical Waterway Comes to a Halt

 

Suez Canal: Critical Waterway Comes to a Halt

Courtesy of Marcus Lu, Visual Capitalist

The Suez Canal: A Critical Waterway Comes to a Halt

On March 23, 2021, a massive ship named Ever Given became lodged in the Suez Canal, completely blocking traffic in both directions. According to the Suez Canal Authority, the 1,312 foot long (400 m) container ship ran aground during a sandstorm that caused low visibility, impacting the ship’s navigation. The vessel is owned by Taiwanese shipping firm, Evergreen Marine.

With over 2...



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The Technical Traders

Adaptive Fibonacci Price Modeling System Suggests Market Peak May Be Near

Courtesy of Technical Traders

Our Adaptive Fibonacci Price Modeling system is suggesting a moderate price peak may be already setting up in the NASDAQ while the Dow Jones, S&P500, and Transportation Index continue to rally beyond the projected Fibonacci Price Expansion Levels.  This indicates that capital may be shifting away from the already lofty Technology sector and into Basic Materials, Financials, Energy, Consumer Staples, Utilities, as well as other sectors.

This type of a structural market shift indicates a move away from speculation and towards Blue Chip returns. It suggests traders and investors are expecting the US consumer to come back strong (or at least hold up the market at...



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Lee's Free Thinking

Texas, Florida, Arizona, Georgia - The Branch COVIDIANS Are Still Burning Down the House

 

Texas, Florida, Arizona, Georgia – The Branch COVIDIANS Are Still Burning Down the House

Courtesy of Lee Adler, WallStreetExaminer 

The numbers of new cases in some of the hardest hit COVID19 states have started to plateau, or even decline, over the past few days. A few pundits have noted it and concluded that it was a hopeful sign. 

Is it real or is something else going on? Like a restriction in the numbers of tests, or simply the inability to test enough, or are some people simply giving up on getting tested? Because as we all know from our dear leader, the less testing, the less...



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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.
...

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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...

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