If it’s February then it must be the bank sector reporting season

February 19, 2008 | 1 Comment

We all know the talk about Banks exposure to toxic debt and the possible damage to the balance sheets to the point that its becoming a “normal” item on the newsfeeds. So, rather than bore you with the more of the same I thought it was time to look at the charts of banks due to report over the next few weeks. This will not be a crash course in Elliott Wave Theory, more of a simple approach to Technical Analysis using a moving average, an indicator, identifying possible support and resistance and pattern recognition. I do not intend to recommend a position in any share, I will just be pointing out how I interpret the charts. Read more

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The Collection Agency – Weekly Report

February 19, 2008 | Leave a Comment

Welcome to the weekly report. As another bond market fails due to a dearth of buyers and a lack of support from Market Makers, I want to have a look at the inner workings to see who is displaying signs of distress. Is the Municipal Bond market the right place for investment and have PIMCO and SIFMA unintentionally pointed out the pitfalls? Read more

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AIG Get Caught By The Auditors

February 14, 2008 | Leave a Comment

Boy you could here the squeals of pain all the way down Wall St. Getting caught by the auditors is the risk you take when you start playing with exotic instruments and “forget” to let the accountants know things may have changed. PricewaterhouseCoopers applied the pressure, uncovering “material weakness” in the way AIG accounted for it’s Credit Default Swaps. The material weakness was to under-estimate the losses on CDS by 400%. AIG say the losses of $4.88Bn occured in October and November ‘07 on CDS sold to protect fixed income assets. Read more

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US credit markets get huge boost

February 13, 2008 | Leave a Comment

Tuesday (February 12) was a big day for a couple of credit markets suffering from the year long credit slump.  The mortgage industry, the leading catalyst of the credit trouble, was boosted by a Bush administration announcement that it was working with major mortgage lenders to freeze the foreclosure process for thirty days.  Warren Buffet inspired the bond market and equity markets this morning with his personal vow to back the bond insurers who have recently felt the effects of the worsening credit situation. Read more

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The Collection Agency – Weekly Report

February 11, 2008 | Leave a Comment

Evidence from the US Federal Reserve shows lending standards have tightened appreciably in the past 3 months. Although this is lagging information it is of great importance as it shows the level of liquidity available to consumers and business. Whilst it can be risky to extrapolate a forward outlook from past data in this circumstance we see no current indicators that say conditions have reversed. Read more

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Inflation concerns may limit Fed rate cuts

February 8, 2008 | Leave a Comment

The US government and Federal Reserve have responded aggressively to combat recession concerns that stem from ongoing housing and mortgage struggles and new concerns over a tightening service sector and slowing business growth.  The combined 1.25% Fed rate cuts the last week of January, brought the Fed fund rate to 3%.  While it will take some time for the market to be impacted by the cuts, two leading Federal Reserve officials have suggested the moves may lead to inflation challenges. Read more

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Wachovia, IAC and Falling Out Of The Lending Tree

February 7, 2008 | Leave a Comment

The banks continue to struggle as they attempt to rebuild capital after losses incurred in the credit derivative markets continue to climb. With the Basel 2 regulations now in full flow banks can no longer gloss over such issues and wait for profits to make up a shortfall. Action is required immediately to repair the accounts. Hence the banks offering to sell some of the family silver by going cap in hand to shareholders, Sovereign Wealth Funds and private funds to raise cash. Read more

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Oil falls below $89 per barrel encouraging recession fears

February 6, 2008 | Leave a Comment

Oil futures fell below $89 per barrel Tuesday (February 5) as concerns over recession gripped Wall Street.  Many economists believe that oil saw its peak after a brief stint over $100 early last month.  The major catalyst for Tuesday’s drop was a surprising report that showed the generally strong service sector may be weakening, indicating a dwindling demand for energy is on the horizon. Read more

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