Credit Rating Agencies: (the full global list)

Large list of credit rating agencies.  According to Moody's site, the Chicago Fed index reveals a recession may end by Q3.  What did I say about predicting the future??? 

At 64 credit rating agencies worldwide (Mar-2008), this list is only one more than our previous tally, see the historical list. Listing all the world's credit rating agencies is a hopeless task, but several kind people have written to me so this compilation represents significant turnover, see the nine names dropped from prior list.

Interestingly, mechanical credit scoring continues to gain acceptance and application. This trend is fueled by: a) increased uniformity and electronic reporting of financial information, 2) decreased "name recognition" of borrowers by investor/lenders, as 3) credit becomes more global, 4) an increased ability to make use of a quantitative value within the growing tide of Credit Value-at-Risk models/systems, and 5) regulator incentives for some to adopt an Internal Models Approach.

Credit Rating Agencies: (the full global list)

Top 10 of the TSX

 

Suncor's looking like it's hit some downward resistance from it's big drop and bigger recovery today.  Looks like a $92-$100 trading range, with a nice bounce going forward.  Currently sitting at $95 so the pendulum could tilt either way.

SU
http://tinyurl.com/33cxmb

Manulife looks a bit frightening... if the bottom drops out of $34 support level it's hard to say where it goes.  It did recover a bit from the insurance sector drop last week.  Upside is $38-$40.  Probably going to stay range-bound for a bit.

MFC
http://tinyurl.com/3a8w5p

Royal Bank is another one with a long way to go down if the bottom drops out. A fairly decent recovery today up to $46.68 is much better than a couple days ago, where the low was $42.82.  Looks to be stable around the $43 range.  Upside could be $51.

RY
http://tinyurl.com/2l95ht

RIMM looks strong.  Upside to $112.  Downside to $94.  Closed in strength at $104.94.  Watch for weakness Monday.

RIMM
http://tinyurl.com/2o7o5l

Encana was fairly flat today and probably hit some resistance against the resources/energy selloff.  With a floor of $70 and a close of $75.71, there appears to still be some upside. Perhaps back up to $78 or above?  Or did it peak last week and it's all downhill from here.

Hoping it is, only because the resources and commodities sector is too hot to maintain a stable global economic environment.  Something needs to give.

ECA
http://tinyurl.com/34uwqk

Looking for more downside in TD, $56 - $58 range, appears to be resistance at $58.  Currently $61.29.  Upside potential could be much greater than downside, especially if something happens with the CBH deal.  Upside could be anywhere from $70-$75.

TD
http://tinyurl.com/388djw

BNS has an ugly chart. 'nuff said.  Head and shoulders on a P&F chart?  It is at lows, so popping back up to the $48 mark would give some decent upside potential.  Currently $44.18.

BNS
http://tinyurl.com/33cupa

Potash is at resistance levels around $138.  Still kicking myself for not buying it at $86 a couple of years ago before the split.  Could bounce to $162.  $147.57 current.  Down 6.68%. 

POT
http://tinyurl.com/3czll8

CNR is above bottom resistance at $48.67, resistance around $46, upside around $52-$53.  I'm in Monday on CNR I think.  Need someplace to park cash for a bit.

CNR
http://tinyurl.com/2kc2zt

Barrick, blech.  Down 20% today.  I'm a buyer Monday... not.  Seriously though, short covering Monday will probably bring it back to the $46-$48 range if things don't continue to deteriorate with the price of gold.  When it rains it pours in commodities, so the downside for gold has got to be the $820/oz range. 

ABX
http://tinyurl.com/3dm48y

Ugly day today in stocks

"We live in a world in which we need to share responsibility. It's easy to say 'It's not my child, not my community, not my world, not my problem.' Then there are those who see the need and respond. I consider those people my heroes." - Fred Rogers

It's Mr. Rogers birthday today.  The banks, financials and stock markets need a hero.

It will be a full moon in the UK this weekend.  Overseas markets are none too happy today with the margin requirements on CFDs being moved from 25% to 90%.  Oddly enough the FTSE is fairly flat.

"You are going to see a lot of forced selling," said one leading London stockbroker.

- no foreign travel for easter holidays by senior bank of england staff, supposedly means UK clearer in trouble.

- LLOY LN IR actually denied fundings probs.

- HBOS denied prob to Merril’s , but as yet, not to the mkt, still being sold.

- RBS annual report which was released last night apparently shows massive    funding requirements.

- ARE UK BANKS THE SUB PRIME OF WORLD BANKING CONSIDERING THAT NONE HAVE    CONFESSED TO ANY CREDIT PROBS YET, IS BARC MADE OF TEFLON ?

- UBS, Swiss Govt apparently asked CSGN to put togther rescue package for UBS in   case that the crisis worsens.

- Soc Gen, BNP says no merger interest, spec thats because they have more horrors

MF Global warning adds to market worries - Telegraph

http://ftalphaville.ft.com/blog/2008/03/19/11714/panicky-banks/

And then there's the plummeting gold price.  I see a bottom forming today... or perhaps on Monday.  Something about an election overseas is causing some tensions...

Two U.S. aircraft carriers, including the USS Kitty Hawk, have been sent to the Taiwan region for training exercises during this weekend's Taiwanese election, a U.S. defense official said on Wednesday.

http://news.yahoo.com/s/nm/usa_taiwan_carriers_dc;_ylt=Av2Uoji3qkE2UlCECsHrB_sDW7oF

Who suffers in a bear market? The bears...

 

``There is a good analogy to Long-Term Capital,'' said Anthony Sanders, a former director of mortgage-bond research at Deutsche Bank AG who starts next month as a professor of finance and real estate at Arizona State University's W.P. Carey School of Business in Tempe, Arizona. ``They were all friends with Bear Stearns when they thought the spreads were huge. Now that the market has turned, Bear's standing there like the lone grizzly.''

Bloomberg.com: Worldwide

Chart of the Day: Debt Tranche Correlation - Finance Blog - Felix Salmon - Market Movers - Portfolio.com

So what happens when all spreads become equal? Fire sale...

High correlation is one of those weird things which pops out of the financial markets when you get strange bedfellows such as a credit crisis combined with a very low corporate default rate. Just as currency futures don't predict the future movement of currencies (they're entirely a function of interest rates), the correlation figure doesn't really measure how likely a massively-correlated simultaneous wave of defaults is. Instead, it just kind of pops out when you get forced liquidations, like we're seeing in the CLO and CDO markets, where Everything Must Go.

Chart of the Day: Debt Tranche Correlation - Finance Blog - Felix Salmon - Market Movers - Portfolio.com

Yuck...

I wonder what would happen if you click HELP for explanation?  What do the red lines mean?  Can't be good.

Mish has the scoop here.

 

I'm surprised that Washington, DC, doesn't show up in this grid.  A 2000% increase in taxes could really cause trouble.

wm-alta-pool.png (image)

Big pimpin: How an information system helped nail Eliot Spitzer and a prostitution ring | Between the Lines | ZDNet.com

 

So whether you transfer $100,000 once or 10 transactions of $9,999, the Feds will have no trouble picking you out of a line up.

According to the Associated Press, this investigation began with a suspicious activity report on Spitzer. The Wall Street Journal reported that Spitzer’s transactions looked like they were kept below $10,000 to avoid federal reporting rules. This behavior to avoid the $10,000 threshold also helps the Feds find strange behavior, say 150 transactions between $7,000 and $9,000. The Journal notes:

How an information system helped nail Eliot Spitzer and a prostitution ring | Between the Lines | ZDNet.com

I wonder how many other high-level government officials are waiting for something to come out of this...  This kind of stuff has been going on for thousands of years.

The Credit Market tanks, the Fed releases $200 billion dollars in a TAF, and a more permanent auction "loan" against illiquid debts, the markets still struggle, and the news is focused on politics as usual.

Moving bad balance sheets to the US Government

The Fed's offering 28-day term lending with bad mortgages as collateral, in a $200 billion dollar temporary bailout.

Today's steps indicate the Fed is increasingly concerned about the investor exodus from mortgage debt, which threatens to deepen the housing contraction and the economic slowdown. While they fall short of the calls by some analysts for the Fed to make outright purchases of mortgage debt, the central bank left the door open to expanding the effort.

Bloomberg.com: Worldwide

If the banks juggle this properly, doesn't it mean that treasuries show up in the balance sheet as opposed to bad debts?

US corporate bond spreads approach widest on record | Funds | News | Reuters

Once upon a time, CDS premiums were in the $30k to $50k range.

That was a long time ago...

Credit default swaps on Lehman Brothers'(LEH.N: Quote, Profile, Research) debt traded near 300 basis points, or $300,000 a year for five years to protect $10 million of debt, while Goldman Sachs'(GS.N: Quote, Profile, Research) swaps were around 215 basis points, the analyst said.

US corporate bond spreads approach widest on record | Funds | News | Reuters

Another bubble - Commodity funds?

Ever since GLD, USO, MOO, PBW, PHO, etc. have come on the market, I have noticed an increase in the prices of underlying commodities.  Chicago Futures were the original market to play the commodities game, and because of the complexity of getting into the market the average investor didn't bother.

Getting into an ETF is as simple as point and click.  It's easier than going to a coin dealer and buying gold.  It's easier than trading futures on an exchange, even though some of the products do just that for you.

It is a proxy for speculation, and speculation can be quite different from reality.

So other than Ethanol artificially inflating prices, ETFs and commodity index funds appear to be doing the same.

The "culprit" is the new breed of commodity index funds. Each week over the last two months, between $5bn and $10bn of fresh money has been pouring into the Goldman Sachs Commodity Index, the Dow Jones-AIG Commodity Index, and other funds, according to a UBS study. Together, the indexes now hold $200bn.

Fears of a commodity crash grow - Telegraph

Let's just hope they get the double-short ETFs out fast enough to get the price of bread back down to a normal level.

The price of gold plummeted today.  Perhaps $975 rounded is $900?  Since you can't cut a bar of gold in half without losing some of its value, maybe this is the case.

BullRunner, following the Market

Gold hit $990/oz today before dropping back to $983... still on it's way to $1000?

Gold, sitting at $975/oz is getting dangerously close to my "1 month or so" $1000/oz call.

BullRunner, following the Market

I seem to remember bailing on gold at $700 in May of 2006, after getting in at $580.  At the time I thought it was a good call, since the price of the metal plunged back to $590 before recovering.  The metal became range-bound between $620 - $680 for almost 6 months in 2007, before the credit crisis boogeyman and the Bernanke put brought it up past the $800 mark.

Right now there's not a long way to go to $1000/oz... but my guess is that we round up just past $1k and then drop back to low $800 by May.

Based on the 1 year RSI we're way overbought here, for GLD anyway.  Unless we see some more serious writedowns, that is...

But are investors too shellshocked to care about writedowns?

Hurt by the deepening credit crisis, Bank of America Corp. said Tuesday its fourth-quarter earnings fell 95 per cent, and Wachovia Corp. reported that profit tumbled 98 per cent.

http://money.aol.ca/article/us-banks-bgt/131728/

And of course, Buffett is bottom-feeding.

"We were getting calls on large portfolios," Mr Buffett said in an interview on CNBC yesterday. "People who were out on a limb financially are getting that limb sawed off."

I wonder if this relates to the news about all the size 12 feet surfacing on Canada's coastlines.

If it was the right hand or left foot, the US could blame it on Iran.

But really, is the USD weakening, or is it just that the Yuan is tightening?

The PBOC has let the yuan rise much more quickly in recent weeks. The currency climbed as high as 7.1122 per dollar on Thursday, the highest level since it was depegged from the dollar in July 2005 and allowed to float within managed bands.

http://www.guardian.co.uk/feedarticle?id=7343736

Exchange rates probably have a lot to do with what's going on in world markets, and what's going on with the economy.  Things are tough for Canadian manufacturers, especially the paper mills who have seen profits plummet.

"The dollar is by far the worst of all our problems," he told the committee Thursday

http://money.aol.ca/article/bank-economy-2nd-writethru-bgt/132524/

Amero, anyone?  One solution to the strong Canadian dollar would be to place it in the same basket with Mexico & the USD, and maybe throw in Zimbabwe dollars. 

Ameroz for all...

BullRunner, following the Market

Gold, sitting at $975/oz is getting dangerously close to my "1 month or so" $1000/oz call.

We can see this with the price of gold, which is up $21.60/oz today.  10 year gold since June '07 has gone vertical.   60 day gold shows 3 distinct peaks, with a 4th peak forming.   Point and Figure chart doesn't indicate any bottom.  Are we on our way to $1000 gold in the next month or so?

BullRunner, following the Market

There's 20 days until the Taiwan UN referendum.  Airstrikes in Gaza have buried the peace process.  Iran meets Iraq for the first time.  My thoughts are that market volatility and world politics will keep the price of gold at all-time highs.

Not to mention the abuse the USD has been receiving lately.

Here's JPYUSD=X.  Looks like the YEN is getting stronger as the carry trade unwinds and oil sales are done in Japanese currency and Euros.

Here's EURUSD=X.  Seems to be a pattern here.

Of course, the EUR isn't getting off too easy.  Even though it's strengthened against the USD, the YEN is still beating it up recently.

Here's JPYEUR=X.

In other news, it looks like The Donald isn't getting his golf course any time soon.

The Scottish Government announced yesterday that the issue will be decided by a public local inquiry.
Finance Secretary John Swinney claimed the move will give all parties for and against the proposals for the Menie Estate near Balmedie in Aberdeenshire the opportunity to state their case.

But the US tycoon last night expressed surprise over the inquiry, and warned: "Nobody is going to invest in Scotland." Mr Trump also revealed he knew of companies that had already been put off by the controversy.
Announcing his decision, Mr Swinney said: "This application raises issues of importance that require consideration at a national level.

They are even taking the Trump coat of arms into question.

The Court of the Lord Lyon invoked a law dating from 1672 which means Mr Trump must register a coat of arms.

A spokeswoman for Mr Trump said they were working with the court to register the coat of arms.

The businessman has been using the banner on promotional material and official clothing while mounting his bid to create the resort at the Menie Estate in Aberdeenshire.

Lyon clerk Elizabeth Roads said the use of the Trump International Golf Link Scotland design, which bears the Trump family name below a spear-wielding fist and a shield, was being investigated.

The person responsible for the current political fiasco is supposed to be Councillor Martin Ford, who voted against the deal due to environmental issues.  He is apparently now a "non-person" and has lost any positions on committees he served.

That vote was annulled by the Scottish Government, a move which was unthinkable until last month.