Commentaries

from Rolfe Winkler:

Bond Bears: Beware of “crypto QE”

October 28, 2009

The guys at Variant Perception make a great point. Some reform plans for the banking sector (so-called "narrow banking" being the most extreme) would have banks invest more deposits in government paper in order to keep them safe. To the degree such plans get traction, that could keep a lid on yields despite rising government spending.

Commercial property borrowers falling short

October 13, 2009

Commercial real estate loan delinquencies are on the rise again, and September’s increase is the largest ever, according to Moody’s Investors Service’s latest tally of those loans included in CMBS deals.

Automatic debt-to-equity swap?

October 8, 2009

That’s what Fed Governor Daniel Tarullo seems to be advocating in his speech, which you can find here.

The EC bank smackdown

October 8, 2009

Dexia and ING’s recent decisions to call some of their subordinated debt has puzzled market observers, as they seem to fly in the face of the European Commission and its crusade on burden-sharing for banks that have received state aid.

So much for that de-leveraging

September 25, 2009

You would think it would take a little longer for hedge funds and other investors addicted to using borrowed funds to juice returns before they started loading up on high-yielding junk. But with short-term borrowing costs so low, I suppose it was just too hard to resist yields found in the depths of high-yield bond market.

Citi back for more, but sans FDIC help

September 17, 2009

It looks like Citi is on a mission to prove it doesn’t need any stinking help from the federal government. Earlier this week it tapped the bond market for $5 billion, but the notes carried the FDIC guarantee. As the FT noted in its piece yesterday, the move seemed at odds with the bank’s supposed attempts to get out from under the government’s thumb.

Good hybrid crack

September 11, 2009

It’s interesting to see the Irish government seems to have been keeping a close eye on the hybrid debt fiasco, as it is now embracing the securities as a way to ensure the country’s banks don’t get an easy ride offloading dud property loans to NAMA, its bad bank scheme. I guess you could call it a form of payback.

A Confucian conundrum for China

September 9, 2009

The Chinese own more United States Treasury bills than can be counted in a lifetime, and as the dollar printing press roars on, the rulers of the People’s Republic are getting nervous. They would like to see another reserve currency, and quite like the idea of it being the renminbi. After all, the euro and the yen are really too small to fulfill the role, while sterling is just small change.

Anyone for cov-lite?

September 7, 2009

In our post-credit crunch era of avowed simplicity and rigorous credit analysis, you’d have thought that bond investors would be demanding tougher terms than ever to finance high yield companies.

The European Commission strikes back

September 4, 2009

Reeling from the humiliation of failing to stop Belgian bank KBC paying interest on some of its subordinated bonds, the European Commission has won a new victory in its bid to see bondholders share the pain of bank bailouts.