Credit Writedowns » derivatives

Jeffrey Gundlach’s Bond Outlook

Edward Harrison — Thu, 05 Jan 2012 01:00:27 +0000

Here's the skinny on how Jeffrey Gundlach sees the best tactical bond market approach for US-based investors

Credit Writedowns Pro is live. Sign up today for premium content.
Jeffrey Gundlach’s Bond Outlook originally appeared on Credit Writedowns

Links: RSS - Daily - Weekly - Twitter - Facebook - Contact
Credit Writedowns Feed # abf0d081857b85fe6be494728740a4f1

Related Posts

Gundlach: “It’s very difficult to move forward with a debt-based economic scheme” 10 Jun 2011
Gundlach on another crisis: “How much currency do you have?” 31 May 2011
Jeffrey Gundlach: Now What? 13 Jul 2011

Video: Warren Buffett on ‘Too Big to Fail’

Edward Harrison — Mon, 14 Nov 2011 16:15:08 +0000

Here’s more from Warren Buffett on CNBC this morning. This time he talks to Becky Quick about ‘Too Big To Fail’. CNBC host Joe Kernen takes sides with the Occupy Wall Street protesters and asks Buffett whether we can regulate them to “keep them honest” or whether we need to “break them up”. Buffett responds in the video below

Credit Writedowns Pro is live. Sign up today for premium content.
Video: Warren Buffett on ‘Too Big to Fail’ originally appeared on Credit Writedowns

Links: RSS - Daily - Weekly - Twitter - Facebook - Contact
Credit Writedowns Feed # abf0d081857b85fe6be494728740a4f1

Related Posts

Quote of the day: Warren Buffett 14 Jul 2008
Video: Warren Buffet says euro zone has “fundamental flaw” 14 Nov 2011
Chanos and Gross versus Paulson and Bloomberg 13 Oct 2011

Bill Black on potential Bank of America derivatives losses

Edward Harrison — Mon, 31 Oct 2011 20:46:40 +0000

In the video below, Bill Black discusses the issues he raised in a recent post about Bank of America’s accounting activities. At issue is the effect of its shift of assets from the holding company to its FDIC-insured subsidiary. In total, Bank of America owns derivatives with a notional value of $75 trillion. The Federal Reserve authorised this accounting manoeuvre despite FDIC objections

Credit Writedowns Pro is live. Sign up today for premium content.
Bill Black on potential Bank of America derivatives losses originally appeared on Credit Writedowns

Links: RSS - Daily - Weekly - Twitter - Facebook - Contact
Credit Writedowns Feed # abf0d081857b85fe6be494728740a4f1

Related Posts

Last bankruptcy tonight: America West Bank 1 May 2009
Seven more bank failures brings total to 64 24 Jul 2009
Countrywide is the real problem at Bank of America 16 Jan 2009

What They Are Doing?

Frederick Sheehan — Mon, 24 Oct 2011 12:30:00 +0000

The quantity of debt grows as the quality recedes. The problem of bad loans is no longer just the pre-2008 mortgages, CDOs, and LBOs. Debt issued after the bust is defaulting, such as Greek sovereign bonds, issued in June 2010. Some securities are born to part investors from their money, but it's remarkable the extent and variety of such instruments issued in 2011. The world choked on similar bonds and derivatives only three years ago, many of which are still held at false prices on financial institutions' books

Credit Writedowns Pro is live. Sign up today for premium content.
What They Are Doing? originally appeared on Credit Writedowns

Links: RSS - Daily - Weekly - Twitter - Facebook - Contact
Credit Writedowns Feed # abf0d081857b85fe6be494728740a4f1

Related Posts

Why does everyone think the Fed will ride to the rescue? 14 Jul 2011
Bernanke outlines Fed’s easy money exit strategy 21 Jul 2009
Chart of the Day: Excess Reserves 6 Apr 2011

Bank of America’s Death Rattle: Not with a Bang, but a Whimper

William Black — Wed, 19 Oct 2011 17:45:51 +0000

Bob Ivry, Hugh Son and Christine Harper have written an article that needs to be read by everyone interested in the financial crisis. The article (available here) is entitled: BofA Said to Split Regulators Over Moving Merrill Derivatives to Bank Unit. The thrust of their story is that Bank of America’s holding company, BAC, has directed the transfer of a large number of troubled financial derivatives from its Merrill Lynch subsidiary to the federally insured bank Bank of America (BofA). The story reports that the Federal Reserve supported the transfer and the Federal Deposit Insurance Corporation (FDIC) opposed it. Yves Smith of Naked Capitalism has written an appropriately blistering attack on this outrageous action, which puts the public at substantially increased risk of loss. I write to add some context, point out additional areas of inappropriate actions, and add a regulatory perspective gained from dealing with analogous efforts by holding companies to foist dangerous affiliate transactions on insured depositories. I’ll begin by adding some historical context to explain how B of A got into this maze of affiliate conflicts

Credit Writedowns Pro is live. Sign up today for premium content.
Bank of America’s Death Rattle: Not with a Bang, but a Whimper originally appeared on Credit Writedowns

Links: RSS - Daily - Weekly - Twitter - Facebook - Contact
Credit Writedowns Feed # abf0d081857b85fe6be494728740a4f1

Related Posts

BofA is nuts: still going to acquire Countrywide 11 Jun 2008
Countrywide is the real problem at Bank of America 16 Jan 2009
More reason BofA is crazy to take on Countrywide 25 Jun 2008

Can Greece CDS Trigger A European Lehman?

Edward Harrison — Tue, 14 Jun 2011 01:51:04 +0000

In my view, a CDS trigger could be a Lehman-style event, yes. Moreover, only a hard restructuring – meaning principal reduction would actually have any meaningful impact on peripheral CDS or interest rates. So, I expect the euro zone periphery to continue to remain under stress until we reach that point

Credit Writedowns Pro is live. Sign up today for premium content.
Can Greece CDS Trigger A European Lehman? originally appeared on Credit Writedowns

Links: RSS - Daily - Weekly - Twitter - Facebook - Contact
Credit Writedowns Feed # abf0d081857b85fe6be494728740a4f1

Related Posts

Greece will eventually restructure 24 May 2011

Gundlach on another crisis: “How much currency do you have?”

Edward Harrison — Tue, 31 May 2011 18:24:34 +0000

Forget about gold for the time being. Investors need to own cash - currency, simply as a hedge against the risk of another derivatives mess down the line

Credit Writedowns Pro is live. Sign up today for premium content.
Gundlach on another crisis: “How much currency do you have?” originally appeared on Credit Writedowns

Links: RSS - Daily - Weekly - Twitter - Facebook - Contact
Credit Writedowns Feed # abf0d081857b85fe6be494728740a4f1

Related Posts

Jeffrey Gundlach cautious on High Yield, also sees Munis 15-20% lower 9 Mar 2011

Sidelights to 1994

Frederick Sheehan — Mon, 02 May 2011 17:30:49 +0000

LURING THE UNSOPHISTICATED into the stock market was considered a risk by Federal Reserve Chairman Alan Greenspan in 1994. So much so, that protecting the individual investor was a mandate of the Fed. (The Fed advertises and then omits new mandates faster than spring fashions. My favorite is the brainstorm of former Fed governor Frederic Mishkin in 2007: "The modern science of monetary policy proceeds under the assumption that the central bank's purpose is to maximize the well-being of households in the economy; the objective function specifies exactly what should be maximized.") On May 27, 1994, Greenspan told the Senate Banking Committee it was for this very reason that he - his FOMC - had started raising rates in February, 1994: "Lured by consistently high returns in capital markets, people exhibited increasingly a willingness to take on market risk by extending the maturity of their investments." The People had shifted assets out of bank deposits and the like. The avuncular Fed chairman, by raising rates, was shepherding his sheep: "[S]ome of those buying the funds perhaps did not fully appreciate the exposure of their new investments to the usual fluctuations in bond and stock prices." Given this acknowledgement, the Fed later violated its Investor Protection Mandate when it did not raise margin requirements: a means to reduce credit to the stock market, but, as much so, a warning of forbearance to those who do "not fully appreciate the exposure of their new investments." The Federal Reserve has absolute authority to raise margin requirements at any time. The Dow rose from 3,757 on May 27, 1994 to over 11,000 in early 2000; the Nasdaq from 733 to over 5,000. During these manic years, households served as sacrificial lambs to finance an economy that was funded by rising stock and bond prices

Credit Writedowns Pro is live. Sign up today for premium content.
Sidelights to 1994 originally appeared on Credit Writedowns

Links: RSS - Daily - Weekly - Twitter - Facebook - Contact
Credit Writedowns Feed # abf0d081857b85fe6be494728740a4f1

Related Posts

Is It 1994 Again? 25 Apr 2011
Federal Reserve’s Fisher says tightening will be aggressive 29 Sep 2009

Is Your Portfolio Insured?

Casey Research — Thu, 14 Apr 2011 14:00:14 +0000

If you, like many investors, keep the majority of your holdings in relatively liquid stocks on the U.S. exchanges, one of the first places to look is options. Say you are one of the investors who has been along for the ride on Netflix, and your position is up 700% in five years, with the stock trading at about $230/share. Maybe you are willing to live with a 10% haircut, but no more. In that case, you could purchase puts to cover your holdings on the stock out to September, with a strike price of $205. The current premium on such puts is about $20, or less than 10% of the share price. That might sound like a lot to pay for insurance. But the nice thing about options is, you can always let someone else pay for your policy. Calls for Netflix at $250 with the same expiration are also trading right around $20. Sell an equal number of covered calls, and your insurance is basically free. If the stock rises, you'll still get the strike price, sharing in some of the gains (albeit now capped). And if it crashes, you'll be able to dump your shares onto someone else at the prearranged price

Credit Writedowns Pro is live. Sign up today for premium content.
Is Your Portfolio Insured? originally appeared on Credit Writedowns

Links: RSS - Daily - Weekly - Twitter - Facebook - Contact
Credit Writedowns Feed # abf0d081857b85fe6be494728740a4f1

Related Posts

The short-selling rule and unintended consequences 16 Jul 2008
Taleb and his Black Swan funds have stellar performance 6 Nov 2008

A Kind Word for Homeowners

Annaly Salvos — Fri, 07 Jan 2011 21:50:52 +0000

By Annaly Capital Management The next voice to be heard in the debate on the future of housing finance in the United States will be that of the Treasury Department, which is slated to release its report on the subject sometime this month. Given the sensitive political and economic nature of the topic, the complexity

Credit Writedowns Pro is live. Sign up today for premium content.
A Kind Word for Homeowners originally appeared on Credit Writedowns

Links: RSS - Daily - Weekly - Twitter - Facebook - Contact
Credit Writedowns Feed # abf0d081857b85fe6be494728740a4f1

Related Posts

Wednesday Washington Watch 29 Sep 2010
Gross Urges ‘Full Nationalization’ of Housing Finance 18 Aug 2010
Australia: housing slowdown? 3 Jul 2008