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jpidding

Debt Markets...."cracks Appearing"

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Got a mate who works in the debt derivative markets. He's normally very bullish, not wanting the system to fall over cos he's making a packet.

Got a mail from him today saying "credit market beginning to crack". If he is saying this it is time to sit up and take notice.

J.

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Buzzing off an e-mail now to a friend who works in debt markets. I'll let you know.

I suppose there isn't any other way of finding out, other than firing off emails to mates?

What a carry on.

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I suppose there isn't any other way of finding out, other than firing off emails to mates?

What a carry on.

Im working in the debt markets. We are going wider but we're not cracking. Much wider and I get bullish

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Well, there is this absurdly optimistic article in The Times whick seems to imply that the markets are now simply perfect.
If you default, you don’t bring your bank down with you. It merely means pension funds and insurance companies are a little bit worse off than they were.

Ah what a relief, thats alright then.....

...??! :(

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Im working in the debt markets. We are going wider but we're not cracking. Much wider and I get bullish

I work in the debt markets also and think the system is fooked; only a matter of time. "iTraxx Crossover rises by most in more than three months". Just the start......

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Well, there is this absurdly optimistic article in The Times whick seems to imply that the markets are now simply perfect.

Well it is written by Gerard Baker who consistently takes the US Neo-Con economic position. Must be working for a Murdoch paper that does it ;)

Noticed recently that the UK neo-con journo's are now starting to be a bit more anti-Sarkozy since he (surprise , surprise) voiced doubts about the US neo-con version of capitalism in preference to a reformed French one ;)

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I work in the debt markets also and think the system is fooked; only a matter of time. "iTraxx Crossover rises by most in more than three months". Just the start......

When you say fooked do you mean the markets for funding private equity and corporated debts, as opposed to mortgage debts (though the two are interrelated?).

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I suppose there isn't any other way of finding out, other than firing off emails to mates?

What a carry on.

:lol:

It's just a view point from the floor. Calm down.

BTW - he says there are some worries at the widening spreads, but he's expecting it to settle down. Numpty.

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When you say fooked do you mean the markets for funding private equity and corporated debts, as opposed to mortgage debts (though the two are interrelated?).

CDO of ABS issuance has all but dried up. Banks aren't gonig to want to keep risk on their books so will squeeze liquidity. This will reduce capital for funding private equity deals at sub base rate (yes, sub base rate, not even sub libor, a sure sign of a top). I think that earnigns will are going to get whacked on corporates due to ARM resets/rate rises ( Sears answer to this is to prop up share prices by buying back USD1bln :lol: ). China about to start exporting inflation big time. Sit back and enjoy the view, it will be like the final scene from fight club......

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Does everyone on HPC work in the "Debt" market or do some of them actually do proper useful jobs?

I did think that but was far too polite to post it :P

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Does everyone on HPC work in the "Debt" market or do some of them actually do proper useful jobs?

I blow minds for a living.

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Does everyone on HPC work in the "Debt" market or do some of them actually do proper useful jobs?

I only work for a company that does stuff in the debt markets as opposed to doing it myself. My observation from activity round these parts is that cracks have definitely appeared in the lower rated products but that higher grade things (e.g. bonds one of one sort or another issued by companies with a decent rating, CDOs of investment grade bonds etc) are doing fine. There are good reasons for buying these higher rated products that have nothing to do with speculation which won't obviously go away any time soon (e.g. a pension fund buying AAA bonds to match future cash flows or AAA rated tranches of CDOs to get diversification without having to manage a big portfolio of the underlying assets etc etc).

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AAA rated tranches of CDOs to get diversification without having to manage a big portfolio of the underlying assets etc etc).

Apparently both bear stern funds held only investment grade tranches with no exposure to mez or equity layers. And they're still shufted.

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Apparently both bear stern funds held only investment grade tranches with no exposure to mez or equity layers. And they're still shufted.

(on another thread somewhere) - it was a bit more complex than that I think - they had 'investment grade' tranches of CDO^2 of sub-prime MBS. That's definitely the sort of stuff that seems to tanking as people realise that calling it investment grade had no basis in reality or fundamentals. CDOs of investment grade corporate bonds still seem to be selling well although I wouldn't be surprised to hear that the equity tranches are getting harder to shift.

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(on another thread somewhere) - it was a bit more complex than that I think - they had 'investment grade' tranches of CDO^2 of sub-prime MBS. That's definitely the sort of stuff that seems to tanking as people realise that calling it investment grade had no basis in reality or fundamentals. CDOs of investment grade corporate bonds still seem to be selling well although I wouldn't be surprised to hear that the equity tranches are getting harder to shift.

Aghhhhhhh, doomed, Xover 35bs wider today!!

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Aghhhhhhh, doomed, Xover 35bs wider today!!

also, it is suddenly impossible to shift equity tranches of CDO of RMBS. Expect to see liquidity crunch as originators pull back as they do not want to hold this stuff themselves

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also, it is suddenly impossible to shift equity tranches of CDO of RMBS. Expect to see liquidity crunch as originators pull back as they do not want to hold this stuff themselves

A bit more common sense is required in the market, following the eternal rally we have seen, and the cov-lite, etc structures.

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