One week ago, we reported that starting exactly one month ago on March 5, an unprecedented wave of corporate revolver draws was unleashed, resulting in what JPMorgan calculated was a record $208BN in revolving credit facilities being fully drawn (for the full list of companies see here). A few days later, a report from Goldman Sachs observed that, contrary to JPM’s data of exponentially rising revolver […]
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As the coronavirus landed in Europe and the US, the former epicenter of the outbreak, China, has exported to other countries medical supplies worth $1.45 billion (10.2 billion yuan) to battle the deadly pandemic. The key supplies, including billions of masks, millions of protection suits and infrared temperature detectors, as well as 16,000 units of ventilators, were sent overseas in one month from March 1 to […]
The 21-day complete shutdown across India which was triggered by the rapid spread of the coronavirus outbreak will result in a gross domestic product (GDP) loss of almost $98 billion, according to Acuite Ratings & Research. “While the countrywide shutdown is scheduled to be lifted from April 15, 2020, the risks of prolonged disruption in economic activities exist depending on the intensity of the outbreak,” the […]
U.S. aerospace giant Boeing was awarded a $1,5 billion contract modification to build the 18 Lot 11 P-8A maritime aircraft for the Navy; the government of New Zealand; and the Republic of Korea, the Defense Department announced on Monday. The contract modification covers procure eight P-8A for the U.S Navy; four aircraft for the government of New Zealand and six for the Republic of Korea. The procurement also […]
Raytheon Co., one of the world’s largest defense contractors, announced on Monday that it will produce and deliver SM-3 Block IB interceptors under a $2.1 billion, multi-year U.S. Missile Defense Agency contract. It is the first multi-year contract for the SM-3 program, and covers fiscal years 2019–2023. SM-3 is the only ballistic missile interceptor that can be launched on land and at sea. It is deployed […]
The Pentagon awarded Lockheed Martin $818,2 million for the defense giants’ Joint Air-to-Surface Standoff Missile Extended Range, or JASSM-ERs, the Defense Department announced Wednesday. The multi-million dollar award is provided for 360 Lot 17 JASSM-Extended Range (ER) missiles; 40 Lot 17 Foreign Military Sales (FMS) JASSM-ER missiles; and 390 Lot 18 JASSM-ER missiles. JASSM is a long-range, conventional, air-to-ground, precision standoff missile for the U.S. and […]
Almost £14 billion worth of debt incurred over the years by the National Health Service (NHS) has just been forgiven by Downing Street, as part of the UK government’s efforts to deal with the coronavirus pandemic. “Today, to help NHS trusts to deliver what’s needed without worrying about past finances, I can announce that I am writing off £13.4 billion of historic NHS debt,” Health Secretary […]
While its public budget suffers a growing deficit due to the tumbling oil prices and the spread of the novel coronavirus, the Saudi Ministry of Finance revealed that the kingdom has sold local bonds (Islamic debt bonds) worth 15.568 billion Saudi riyals ($4.15 billion) in March. In the details reported by the Saudi Press Agency (SPA), the Ministry of Finance announced that it had finished receiving […]
How do you make sure that an extremely illiquid market trades like a penny stock? By accumulating enough shares to build up a market on close imbalance of over $7 billion, and wait for the exchange to disclose what the MOC was. Here is a chart of what happened at precisely 3:50pm when we learned that there was a $7 billion market on close imbalance, most […]
Having moved from “Not QE” (or QE4 as it was correctly called), to the $750BN QE5 which came and went with the blink of an eye, to the Fed’s open-ended and unlimited QEnfinity in the span of one week, the full “shock and awe” of the Fed’s money printer is now on full display, and in just the past week, from March 19 to March 25, […]
Over the weekend we showed something striking: as market crashed, quant and various other systematic funds were unwinding their positions at the fastest rate in history. Starting with CTAs… … which are now very short stocks and long the dollar… … continuing with risk-parity… … the vol control… … the systematic unwind was simply unprecedented, and far beyond the selling observed in the discretionary community. Of […]
In what is likely to become a trend around the country, California’s Public Employees Retirement System just watched $69 billion go up in smoke as the coronavirus panic has gripped global markets. CALPERS total fund balance is now about $335 billion, down from a record high of $404 billion only one month ago. CALPERS administers pensions for about 1,500 local governments around the state, as well […]
First, its was AG Mortgage Investment Trust which on Friday said it failed to meet some margin calls and doesn’t expect to be able to meet future margin calls with its current financing. Then it was TPG RE Finance Trust which also hit a liquidity wall and could not repay its lenders. The, on Monday it was first Invesco, then ED&F Man Capital, and now the […]
We warned last week that, despite The Fed’s unlimited largesse, there is trouble brewing in the mortgage markets that has an ugly similarity to what sparked the last crisis in 2007. For a sense of the decoupling, here is the spread between Agency MBS (FNMA) and 10Y TSY yields… At that time, WSJ’s Greg Zuckerman reports that the AG Mortgage Investment Trust, a real-estate investment trust operated […]
The credit market is pricing the odds of default for General Motors at 49% as the economic collapse triggered by COVID-19 mitigation ripples through almost every industry. And so, like many other companies, GM is erring on the side of more cash is better and announced today it is drawing down $16 billion from its credit lines and suspending its guidance: General Motors announced today that […]
SoftBank’s shift from long-term ‘vision’ to short-term ‘survival’ is now complete. After the infamous string of blowups that hammered both SoftBank’s private investments as well as its $100 billion ‘Vision Fund’, which consisted mostly of money from the Saudis and Abu Dhabi most notoriously the collapse of the WeWork IPO as the unicorn’s valuation evaporated, triggering the ouster of its founder-CEO, a string of other executives, […]
At the same time as the Federal Reserve announced open-ended QE, which also included purchases of corporate bonds and loans in both the primary (as the ECB does now) and directly in the secondary market (a new twist), as well as expanding its municipal bond purchases while also reactivating the old Lehman-era favorite, TALF facility, the NY Fed announced the specific details of what the Fed’s […]
MOSCOW (Sputnik) – Russia exported arms worth more than $15.2 billion in 2019, to around 50 different countries, Russian Deputy Defence Minister Alexander Fomin said. “As of the end of last year, Russia maintains a leading position in the international arms market among the countries that are the main exporters of military products … The volume of exports of military products amounted to over 15.2 billion […]
Back in December we predicted that at the rate “Not QE” (RIP) was going, the Fed balance sheet would surpass it all time high by late April. It turns out that we were overly optimistic: with the Fed relaunching QE over the weekend as part of what is now global helicopter money, it announced plans to purchase $700BN in Treasury securities and expanding it to MBS […]
U.S. defense contractor Northrop Grumman said that corporation priced a $2.25 billion underwritten public offering of senior unsecured notes. Northrop Grumman solves the toughest problems in space, aeronautics, defense and cyberspace to meet the ever evolving needs of our customers worldwide. The notes include: $750 million of 4.400% senior notes due 2030; $500 million of 5.150% senior notes due 2040; $1,000 million of 5.250% senior notes […]
Most Wall Street analysts are predicting a V-shaped recovery for the US economy in the second half (even if it boggles the mind how the US economy can simply spring right back from a -14% GDP depression in Q2 without missing a beat). But if they are wrong, there will be hell to pay. Or at least 40 billion dollars to pay for the US airline […]
Overnight saw the addition of yet another four-letter-acronym bailout fund from The Fed but signals from the market suggest that they are once again losing control of the dollar-shortage-driven liquidity crisis as the FRA-OIS spread has started to rise sharply once again… So, what does The Fed decide to do? Simple – increase its daily QE buying of bonds by 66%, buying a record $75 billion […]
With the markets screaming for more federal fiscal stimulus to help cushion what will almost certainly become an extremely deep, but potentially short-lived, recession, the administration has unleashed headlines claiming that the third economic package will include $850 billion (more than 100x the $8.3 billion included in the first package). The headline hit earlier this morning, with a barebones report in Politico’s ‘Playbook’ newsletter, which frequently […]
2020 has been a bizarre year: not only did stocks finally crash after the longest and most artificial “bull market” in history, sending an entire generation of clueless traders who had never seen more than a 10% correction puking into their toilet paper-free bathrooms as the Fed finally ran out of ammo to artificially prop up markets, but the metaphorical demise of Dennis Gartman meant a […]