wndysrf Posted August 20, 2004 Report Share Posted August 20, 2004 The persistent, unbending, urelenting appetite for leveraged paper continues. Spreads remain at record lows, and the Debt Issuance Bonanza continues. Never before in financial history has there been such a gluttonous feeding frenzy for Leveraged Exotica. From today's Wall Struck Journal: Leveraged Loans Attract Investors "Collateralized Loan Obligations (CLO's), a bundle of speculative-rated loans split into different portions, each with different levels of risk and return, is enjoying record issuance." "Even after months of soaring prices and shrinking yields for highly leveraged companies bank loans, invesotrs are still eager to buy them. So much so that Highland Capital Management of Dallas, was able to increase the size of its latest offering to a final total of $900 million from $600 million originally. Investors have flocked to the asset class as interest rates have begun to rise, convinced that the loans are good values." "Almost 90% of leveraged loans are clocking a big price over 100", says Standard & Poors Leveraged Commentary & Analysis data report. "And the rush to create new CLOs continues, with billions sitting in the pipeline." "Risk premiums have contracted, with AAA-rated portions of high yield CLOs selling with a yield of .70 over LIBOR. This riskiest portions are coming in with a yield of 2.60 over LIBOR" "In this hypercompetitive environment, CLO managers are foced to be vigilant, keeping a constant eye out for bargains." Can you imagine being the Fixed-Income Manager for CalPERs, staring bug-eyed at the computer screen, waiting for the slightest downtick in the price of the "Newport Beach Plastic Surgery Receivables Trust, Series IV" so you can buy it on the cheap before some other guy at the New Jersey State Pension Fund buys it out from under you? ............................... No doubt, we must be at the Peak of Insanity. Trillions of Mortgage-Backeds, T-Bones, Corporates, Junks, Emerging Market Exotica, Boob Job Securitizations, all being inhaled and vacuumed up by myriad investors, speculators, HedgeFunds, pension funds, action junkies, SpreadTraders, banks, insurance companies, GE Capital, GMAC, DiTech, Countrywide, foreign central banks, International Playboys, Bermuda SPV's, and all the rest. A Veritable Mania outside of stocks. Never before has there been such an undeniable, wholesale, unflinching confidence in U.S. Dollar Denominated Promise Tickets. Never before has there been such a Tidal Wave of Electronic Liquidity pyramided by the 900-story JPM/One Derivative Colossus and the attendant GSE's. Never before has there been such a high stack of cards. Never before has there been such a large, one-way bet on Al Leeson's Reliquifaction Miracle. Never before has there been such an appearance of inpenetrability, yet the Pyramid is so fragile. What could tip it over??? Who knows??? Gold knows. Gold has been on a tear, I suspect its sniffing out the insanity described above. The Pinnacle of Electronic Liquidity about to fail. Looks like some of the older White Shoes are now starting to run to the lifeboats after they offloaded the Large Breasted Wonders back in January to hapless junior Fumble Managers. The same Fumble Managers who were trying to beat the S & P by chasing the High Beta Queens so they could "make their year" and "graduate" by starting their own HedgeFund in 2005. We'll have to wait and see how this unravels.............. Link to comment Share on other sites More sharing options...
Lock Limit Down Posted August 20, 2004 Report Share Posted August 20, 2004 You da man Wndy Tick action today was staggering Nice close on the HUI and XAU Looks like they are gunning for +1100 on the runoff Link to comment Share on other sites More sharing options...
bigsky Posted August 20, 2004 Report Share Posted August 20, 2004 Wndy, What's your take on NCEN?? They are going to vote 9/15 to become a REIT, what's the implication of that?? TIA Link to comment Share on other sites More sharing options...
Guest Posted August 20, 2004 Report Share Posted August 20, 2004 Where's the panic liquidation in crude? After all, bullish consensus says there are 85% bulls in all oil products-crude- gas--heating oil etc IF THERE ARE 85% BULLS in the bullish consensus--and, as I heard on Crap-Vision--"everyone's on the same side of the boat"--would you please tell me why--after 15 or 15 days of gains in crude-- there was a totally normal 92 cent correction-- Where's the panic? A panicked reaction would have had oil down $3-$5--and please keep in mind that the correction today was ongoing for the last 3 hrs of NYMEX crude trading--there was plenty of time to panic---that tells me that strong hands were accumulating long positions cause crudes going to my target of $57. Crude Oil(NYM) Oct 48.35 46.60 46.72s -0.92 Crude Oil(NYM) Nov 47.90 46.20 46.34s -0.89 Link to comment Share on other sites More sharing options...
Guest Posted August 20, 2004 Report Share Posted August 20, 2004 Hard to argue with that, wndy! Link to comment Share on other sites More sharing options...
wndysrf Posted August 20, 2004 Author Report Share Posted August 20, 2004 Volume is accumulating as CEF pushes into the highs. Breakout is imminent. Another surprise for The Matrix..................... Link to comment Share on other sites More sharing options...
wndysrf Posted August 20, 2004 Author Report Share Posted August 20, 2004 Where's the panic liquidation in crude? Key Outside Day Reversal off a Parabolic Move. Down to $42, I'd say............ Link to comment Share on other sites More sharing options...
beardrech Posted August 20, 2004 Report Share Posted August 20, 2004 Well put mark I have a method for maintaining ones morlale in times like these---and underlying the method is the Adage--"be careful for wjhat you wish for" Today I had a wonderful result in my golds--did i bellow Triumphantly as if I had just Jack Hornered a Plum???--- No,I'm too old for that,realizing what a mixed bag it is as Mark described it above--Rising sunbright gold is really signalling the end of a lot of things that I hold near and dear to me Conversely (Inversly??) When my golds take a hit I interpret it as having one more day of relatively peaceful life amidst the growing ruination of evrything-- Therefor what I'm describing is more like an emotional flywheel serving as an equilibrating instrument--- Like in the Three Bears--not too hot not too cold--Just right beardrech: :cry: BD where did you learn all this ?? -----------I used to play with Slinkeys; you know,the coiled metal caterpillar that went up andf down stairs Link to comment Share on other sites More sharing options...
Guest Posted August 20, 2004 Report Share Posted August 20, 2004 Homebuilders strong again today on pathetically low volume. All those bagholders who are buying this mania better hope that the BOJ keeps coming up with more and more boner blasts to save their sorry asses, or it is all going to be over very quickly. Link to comment Share on other sites More sharing options...
Guest Posted August 20, 2004 Report Share Posted August 20, 2004 wndysrf $42 would be a perfectly normal level of correction & the bull mkt would be intact--but today there was no panic... Link to comment Share on other sites More sharing options...
Slothrop Posted August 20, 2004 Report Share Posted August 20, 2004 HUG. Breaks out on better than average volume. Link to comment Share on other sites More sharing options...
seamus Posted August 20, 2004 Report Share Posted August 20, 2004 Gold Fibos Link to comment Share on other sites More sharing options...
fxfox Posted August 20, 2004 Report Share Posted August 20, 2004 oil weekly log chart (from 2 days ago). Link to comment Share on other sites More sharing options...
Yaryman Posted August 20, 2004 Report Share Posted August 20, 2004 Can you imagine being the Fixed-Income Manager for CalPERs, staring bug-eyed at the computer screen, waiting for the slightest downtick in the price of the "Newport Beach Plastic Surgery Receivables Trust, Series IV" so you can buy it on the cheap before some other guy at the New Jersey State Pension Fund buys it out from under you? I burst out laughing after reading that. Sad to say, it's most likely true. Link to comment Share on other sites More sharing options...
Hypertiger Posted August 20, 2004 Report Share Posted August 20, 2004 Appetite For Leveraged Exotica? If your core religious belief is to take more then you give with the purpose of perpetually inflating your net worth which currently is the only path to heaven... Then yield is all that matters...You input 100 and fully expect 110 back not only that but you need 110 back to get closer to heaven...if you input 100 and only get 90 back then you are going to hell... I see no reason why anyone with a choice would want to go to hell... I believe that is what is going on. Link to comment Share on other sites More sharing options...
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