coolhand's Account Talk

[coolhand]

http://www.businessweek.com/news/20...ve-cocktail-of-risk-on-jobs-rotten-loans.html

Spain faces an “explosive cocktail of risk factors” as it wrestles with a fiscal deficit at 11 percent of gross domestic product caused by bad loans to builders and swelling unemployment, UniCredit SpA said.

The nation’s budget gap is the third largest in the European Union and with an unemployment rate of more than 20 percent, the government in Madrid has limited room to maneuver, according to Stefan Kolek, a credit strategist at UniCredit. Bad loans at Spanish lenders climbed to 5.3 percent of total credit in January as the worst recession in 60 years forced borrowers to miss payments on their debt.

“The high dependence of the economy on a highly leveraged construction sector in conjunction with still falling housing prices makes an explosive cocktail of risk factors,” Munich- based Kolek wrote in a note to investors.
Spanish bonds tumbled, pushing the premium investors demand to hold the country’s 10-year notes rather than German bunds to 8.4 percent, while Spanish stocks fell for a third day. Investors are worried that the 110 billion-euro ($144 billion) European Union-led bailout package for Greece may not prevent the crisis spreading to other countries in the euro-zone.

 

[coolhand]

http://www.cnbc.com/id/36961257

The current European debt crisis likely will not end until the euro collapses as a currency and takes the entire European Union with it, said Dennis Gartman, hedge fund manager and author of "The Gartman Letter."

"I think the whole thing will go down to defeat, the whole thing will eventually unravel," Gartman said in an interview with CNBC.com.

Gartman said he doesn't have a specific timetable for how long it will take for the collapse of the 17-year-old EU, but said, "it doesn't look good."

 

[coolhand]

http://www.businessinsider.com/oakland-is-about-to-go-bust-2010-5

The party is over for Oakland even whether its city council is willing to admit it or not. As always, union contracts and pension benefits drove the city into the ground. Please consider Oakland faces pension costs, higher taxes.

Oakland voters will likely be asked in November to approve higher taxes to halve a $42 million deficit, but even if they agree, the city will face an even deeper crisis within months.

Ballooning pension costs will push the city's projected deficit to $58.7 million by July 2011.

The biggest portion of that budget shortfall is a debt payment of $43.9 million due July 1, 2011, to the old Police and Fire Retirement System. The payment would be more than 10 percent of the roughly $400 million city budget.

 

[Bullitt]

Pension deficits just amaze me, yet nobody cares. What will they do when the baby boomers bum rush the gates of city hall in masses with their palms facing upwards?

Pensions will never be back. The crooks and banksters spread the propaganda of 'stocks will make 8% a year when held long term' to main street. Well, they bought it. With pensions modeled for 8% growth after a 50% meltdown in 2008, they're now going to need double digit growth to make it back to par. Might happen, but not without lots of leverage and borrowing- and the deleveraging cycle repeats again.

 

[KevinD]

...and my TSP alone ain't gonna cut it.

 

[alevin]

...and my TSP alone ain't gonna cut it.

You're not alone, Kev. Not alone. This country is in for a monster world of hurt between now and 2019-2023 (my retirement window). Question is, does the real pain start same time I retire, or does it start sooner? Kicking the can means it starts about the time I think its safe to retire.

 

[coolhand]

http://www.briefing.com/Investor/Public/MarketSnapshot/PageOne.htm

It is the same song again this morning, with Europe blaring its head-banging music on sovereign debt and officials there dancing in a mosh pit of indecision. The net result has been a further weakening in the euro (-0.6% at 1.2738) and a further widening of credit spreads that reflects a loss of confidence in the leadership's efforts to prevent a contagion effect.

 

[CountryBoy]

Pension deficits just amaze me, yet nobody cares. What will they do when the baby boomers bum rush the gates of city hall in masses with their palms facing upwards?

Pensions will never be back. The crooks and banksters spread the propaganda of 'stocks will make 8% a year when held long term' to main street. Well, they bought it. With pensions modeled for 8% growth after a 50% meltdown in 2008, they're now going to need double digit growth to make it back to par. Might happen, but not without lots of leverage and borrowing- and the deleveraging cycle repeats again.

I've worried about this for several years now and have wonder whether 'll be able to afford to retire in 2015 and if so, will my 3 legged stool be be a wobbily 2 legger or maybe just one. What we are seeing in Greece now may just be a preview of what we have coming our way.

 

[coolhand]

Looks like I'll be back in the top 50 by the close (I'm being a bit sarcastic ), but it may not be far from the truth. Wasn't I just sitting at 271 on the tracker Monday?

 

[coolhand]

Wow, what a reversal! I wonder who did that?

 

[akpackfan]

Once again, give it up to the SS signal!

 

[350zCommTech]

Wow, what a reversal! I wonder who did that?

This was not real capitulation. Somebody's fat finger was used as a distraction from the real issues in Europe. More selling to come.

 

[fedgolfer]

This was not real capitulation. Somebody's fat finger was used as a distraction from the real issues in Europe. More selling to come.

Really? I'm thinking maybe in the intermediate term there may be... but that quick 1-2 is going to make a lot of stragglers tentative to buym except those that view it as a sale prices, which means sentiment will favor a bullish tilt. I guess differing opinions is what makes this so interesting GL to all

 

[350zCommTech]

Really? I'm thinking maybe in the intermediate term there may be... but that quick 1-2 is going to make a lot of stragglers tentative to buym except those that view it as a sale prices, which means sentiment will favor a bullish tilt. I guess differing opinions is what makes this so interesting GL to all

Well, all the charts will look like that way, but as I mentioned in a different post, currencies don't show capitulation.

 

[amoeba]

Looks like I'll be back in the top 50 by the close (I'm being a bit sarcastic ), but it may not be far from the truth. Wasn't I just sitting at 271 on the tracker Monday?

Yup, that was you- and then you pulled a fast one - instead of completing your bail the prior friday (I IFT'd my last 5% at a measley 1,185); you ditched on the last gasp monday bounce........and here you sit 3 days later about 10 spots or so behind me in the top 150.

Other than gloating, however, Asia is gapping sharply down AGAIN at the open. If tomorrow's german vote and our jobs report go as I think, it will be a bloodbath. I'm thinking another -3 to -5 %, with a semi-hard bottom at 1,100 in the SPY.

So.....do you feel lucky? Are you going in?

 

[coolhand]

Yup, that was you- and then you pulled a fast one - instead of completing your bail the prior friday (I IFT'd my last 5% at a measley 1,185); you ditched on the last gasp monday bounce........and here you sit 3 days later about 10 spots or so behind me in the top 150.

Other than gloating, however, Asia is gapping sharply down AGAIN at the open. If tomorrow's german vote and our jobs report go as I think, it will be a bloodbath. I'm thinking another -3 to -5 %, with a semi-hard bottom at 1,100 in the SPY.

So.....do you feel lucky? Are you going in?

Top 150? How about Top 100.

Seriously, I'm not so much happy about where I am on the tracker, but how well the SS performed. A lot of folks watch it closely and it came through when it really counted.

Jumping into this carnage is a gamble to say the least. That's not my style. No signal, no trade. If the market can show some measure of bottoming, I might be able to discern and front-run a buy signal, but that won't happen right away.

 

[coolhand]

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aaw8Ggrq5pXs

The cost to protect against defaults on U.S. corporate bonds soared the most since December 2008 on concern European leaders aren’t doing enough to prevent a sovereign debt crisis from worsening.

The Markit CDX North America Investment Grade Index Series 14, which investors use to hedge against losses on corporate debt or to speculate on creditworthiness, increased 24 basis points to a mid-price of 129 basis points as of 4:52 p.m. in New York, according to Markit Group Ltd. The index, which typically rises as investor confidence deteriorates, had its biggest daily surge since December 2008, when it climbed 23.27 basis points.

 

[coolhand]

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aGKiAXSpx3iU

The Greek debt crisis will probably trim U.S. economic growth, prices and interest rates over the next couple of years, said Michael Feroli, chief U.S. economist at JPMorgan Chase & Co. in New York.

A 10 percent drop in the value of Europe’s single currency, the euro, will hurt U.S. exports and boost imports, reducing growth in the world’s largest economy by about 0.3 percentage point a year over the next two years, Feroli said in a note to clients yesterday. The euro has dropped about 15 percent since late November on mounting concern the crisis will spread to other European nations.

 

[coolhand]

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=a7Dszi2uHMfk

orporate bond sales have virtually halted in Europe as the market turmoil fueled by Greece’s escalating debt crisis forced investors to retreat from riskier assets.

New issuance plummeted to 1.3 billion euros ($1.6 billion) this week, 92 percent less than the 16.3 billion-euro average for the past 12 months, according to data compiled by Bloomberg. The yield on corporate bonds relative to government debt jumped 13 basis points to 164, the biggest increase since March 2009, Bank of America Merrill Lynch index data show.

Investors are shunning company debt amid concerns that a 110 billion-euro ($140 billion) rescue package for Greece won’t solve the country’s deficit crisis or prevent contagion that will slow the global recovery. Stocks plunged, the euro dropped to a 14-month low and the yield on the German bund, considered to be the safest among European government securities, slid to a record low.

“Against this volatile background, most corporate issuers will sit tight amid the knock-on risk aversion in the corporate sector,” said Charles Stephens, a debt markets specialist at Matrix Corporate Capital LLP in London.

 

[coolhand]

http://globaleconomicanalysis.blogspot.com/2010/05/equity-plunge-yen-connection.html