Volatility of Equity World Spreading to Credit 20 comments
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The latest data out of DTCC indicates that the volatility in the equity world is spreading to credit. Not only that, but last week the CDS market turned decidedly pessimistic, with over $215 billion in net CDS purchased, the highest amount in terms of net notional in over 2 months. Cumulative net CDS purchased since the start of April has ramped up to almost half a trillion dollars. Except for financials, even which also saw a cumulative derisking in the prior week, every single sector has now expressed a cumulative bearish sentiment over the past two months, continuing the optimism/pessimism divergence between equity and credit/CDS.
Sentiment turned aggressively bearish in Consumer goods and services with nearly $100 billion in CDS purchased, followed by Financials ($71 billion), utilities and oil/gas. The only rerisking sectors were Basic Materials and State Bodies.
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Gross outstandingsweek over week rose a substantial $800 billion at $29.1 trillion, consisting of $15.4 trillion in single-names and $13.6 trillion in index and index tranches.
In single names, the risk keeps piling into the usual European sovereign suspects: Italy, Spain and Greece. Interestingly, the most negative sentiment by volume was focused on Wells Fargo (WFC), while CNBC parent GE saw a major increase in bearish sentiment. As expected Volkswagen (VLKAY.PK) is making its way back into the top 20 de-riskers at 13th place. Look for this name much higher next week. In the re-risking category, the net notional ratio was much lower vs de-riskers: some major notables were Credit Suisse (CS), Ford (F), Starwood (HOT), Union Pacific (UNP) and Sherwin Williams.
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This article has 20 comments:
As long as these f#cktards are in charge, I don't know how I can lose.
I think they should guarantee everything.
Muhuhahahahaha.
southflorida.bizjourna...
I suspect the inevitable exposure of Wells et al's problems may, in the current regime of opacity, generate sufficient concern about similar risks hiding on the balance sheets of other, less trumpeted names. I bought a slew of puts on several other banks. We'll see.
Please Dear God tell us it aint AIG selling those CDS's again.
We know who pays the bill on that.!!!!
It won't end until the victims (U.S. Taxpayers) demonstrate convincingly that they've had enough and refuse to take more of this abuse.
I am reluctantly coming to the conclusion that there needs to be a compelling act of protest of what has been happening under the current system. We can no longer afford to allow the egregious chicanery that we have been too patiently suffering through. The penalty for such venality has to be set high enough, on a personal level for those guilty parties, to deter any further abuses.
Perhaps, by hanging a few of the worst offenders, we can convince the rest that it is behavior that will no longer be tolerated. If that doesn't serve as a deterrent, at least we'll have some interesting video and soundbites showing on the TV and internet. Perhaps that will take our minds off of the screwing we are currently being given.
In commodities, one can discern "open interest" in a particular asset (corn, oil, etc...). Since equities don't have a similar "open interest" report, can CDS totals be used as an analog for open interest in a stock?
Thank you to all who contribute to this community.
Once they find out that the high paying jobs are gone, they get minimum wage for putting an oil can to a windmill and they get fired because iillegal immigrant will do it for less.
They cant get medicare because its only for the rich and social security got reformed out the door.
They realize that the dollar has to be stacked in bundles and wheelbarrowed to the grocery store.
Then and only then will soneone rise up and say "you can pry my gun from my cold dead fingers".
Indeed, this is how you make a chaotic system. The house knows the more volatility there is the more chance for profit. Maybe that's why the banks prefer to keep rolling over their trillions in CDS and other derivatives instead of winding them down. Why should they when they can pawn them off to the government someday because what they are doing now will bankrupt the system (them)?
Volatility is only going higher in the future along with bond and interest rates. This doesn't end until the last clown backed tacitly or directly by the government gets thrown out the door. Let's start with AIG, Fannie or Freddie, or Citibank. They all have abused the system to no end.
GOOD question!
The short answer would be No.
I know of no indication that CDS totals on a stock vary in any proportion to either total capitalization, or 'float' (shares trading).
For example, a boring, mid-cap consumer stock, with little debt outstanding, would likely not attract a lot of CDS interest, while a financial company of the same size & trading volume, well . . .
Well most of them, the criminals and cops will still be armed.
On May 27 08:51 PM conceptwizard wrote:
> The Government is ready for the uprising that has to occur after
> it is general knowledge that everyone has been coerced out of all
> of their lifelong savings. They on top of that owe $400,000 of household
> debt apiece. Their taxes are going through the roof. They own 75%
> of all banks and auto companies that are making cars that wont sell
> and the stock is worthless, and the banks they own the CEO.s are
> making 20 million a year while they eat spam.
> Once they find out that the high paying jobs are gone, they get minimum
> wage for putting an oil can to a windmill and they get fired because
> iillegal immigrant will do it for less.
> They cant get medicare because its only for the rich and social security
> got reformed out the door.
> They realize that the dollar has to be stacked in bundles and wheelbarrowed
> to the grocery store.
> Then and only then will soneone rise up and say "you can pry my gun
> from my cold dead fingers".
On May 27 04:59 PM yellowhoard wrote:
> My portfolio depends on incompetance.
>
> As long as these f#cktards are in charge, I don't know how I can
> lose.
>
> I think they should guarantee everything.
>
> Muhuhahahahaha.
On May 28 08:34 AM TeresaE wrote:
> Worst part is, the guns will be gone by then.
>
> Well most of them, the criminals and cops will still be armed.<br/>
On May 27 04:59 PM yellowhoard wrote:
> My portfolio depends on incompetance.
>
> As long as these f#cktards are in charge, I don't know how I can
> lose.
>
> I think they should guarantee everything.
>
> Muhuhahahahaha.
Have many, most are hand me downs or won in divorce.
They will confiscate those they have records for.
On May 28 05:18 PM bricki wrote:
> So get your before then.
>
> On May 28 08:34 AM TeresaE wrote:
On May 27 11:11 PM Jasper M wrote:
> fromtt,
> GOOD question!
> The short answer would be No.
> I know of no indication that CDS totals on a stock vary in any proportion
> to either total capitalization, or 'float' (shares trading).
> For example, a boring, mid-cap consumer stock, with little debt outstanding,
> would likely not attract a lot of CDS interest, while a financial
> company of the same size & trading volume, well . . .