Cobra's Market View

breaking:
something something Theresa May

rejected at resistances so at the best for bulls it's just a range day.

Credit Markets- Bill Banes Morning Porridge was up on Zerohedge today. He says GE has 115 billion in outstanding and they say the downgrades won't affect their interest expense because they will sell assets to meet payoffs. GE stuff is selling for around 82 cents on the dollar, if you can find a buyer.

Yesterday a twitter post noted that GE borrowed 20 billion in 2016 to buy stock and about 5 billion of that was still above water for shareholders.

Congress has forced the banks out of market making. Bane says they got rid of all their experienced traders. Maxine Waters is very very partisan so if her party stopped market making by banks she supports that and has said no more rollbacks on legislation.

Point being there are no market makers because congress doesn't think we need them. The second GE is downgraded to junk no pension or endowment fund will be allowed by their own rules to hold a penny of that 115 billion.

Damn right markets are nervous. If I did this for a living I would be carrying some Depends in my brief case.

Watching...

Al_Dente wrote:...
(I have room for a couple more symbols of suppliers. Do u have any for me? Thanks anyone)

...

China?

BABA (Alibaba)
YINN

Trades with cats wrote:Credit Markets- Bill Banes Morning Porridge was up on Zerohedge today. He says GE has 115 billion in outstanding and they say the downgrades won't affect their interest expense because they will sell assets to meet payoffs. GE stuff is selling for around 82 cents on the dollar, if you can find a buyer.

Yesterday a twitter post noted that GE borrowed 20 billion in 2016 to buy stock and about 5 billion of that was still above water for shareholders.

Congress has forced the banks out of market making. Bane says they got rid of all their experienced traders. Maxine Waters is very very partisan so if her party stopped market making by banks she supports that and has said no more rollbacks on legislation.

Point being there are no market makers because congress doesn't think we need them. The second GE is downgraded to junk no pension or endowment fund will be allowed by their own rules to hold a penny of that 115 billion.

Damn right markets are nervous. If I did this for a living I would be carrying some Depends in my brief case.

TWC, just to be clear since I worked for a state pension plan, our High Yield funds could own GE. Only the investment grade funds might have to sell them. In our case our guidelines didn't require you to sell them if the credit analysts felt they weren't going bankrupt.

TWC, I should have said our 'active' investment grade portfolio. The investment grade index fund would have 90 days to sell the GE bonds once they fell out of the index.

Pasta Boss May could not find any senior officials willing to take over as Brexit Minister. Yet another sign that her government is in a very major crisis. Add that to the woes of German car makers and it becomes clear why many experts keep moving the date of the recession forward.

K447 wrote:

Al_Dente wrote:...
(I have room for a couple more symbols of suppliers. Do u have any for me? Thanks anyone)
...

China?
BABA (Alibaba)
YINN

Thanks
I always saw BABA as a kind of Chinese EBAY, rather than a hard-core supplier of semiconductors and iStuff.
And YINN is 3x leveraged all China. I’m guessing your point is that China’s health is directly tied to AAPL suppliers health?
Anyway, here they are added: dashed lines

Thanks for that. I only know enough about bonds to be a danger to myself and others . But the point all the talking heads are making still stands with your clarification of 90 days, that a very large part of the bond market will have to sell. Bane's point is the one we have heard from many. There are no market makers. So if holders take a substantial loss on GE than the rest of that one notch above junk space should come under pressure. Raises the point of why did people loan money for stock buybacks and of course the answer is Uncle Ben and Aunt Janet.

Weekend reading bonus points for the article with the most references to ENRON!

Al_Dente wrote:OFF TOPIC:
More on the TICK: I still eyeball the David Kneupper TICK
It’s pretty good once you get used to it .... and it updates intraday
https://stockcharts.com/public/3828047/ ... /217834305;

Thanks!

If anyone needs the settings ...



.

Trades with cats wrote:Thanks for that. I only know enough about bonds to be a danger to myself and others . But the point all the talking heads are making still stands with your clarification of 90 days, that a very large part of the bond market will have to sell. Bane's point is the one we have heard from many. There are no market makers. So if holders take a substantial loss on GE than the rest of that one notch above junk space should come under pressure. Raises the point of why did people loan money for stock buybacks and of course the answer is Uncle Ben and Aunt Janet.

Weekend reading bonus points for the article with the most references to ENRON!

You are correct. Now an interesting thought. Assuming the credit analysts don't think GE will go bankrupt in the next 5 years, the PIMCO and Blackrock's of the world will buy gobs of GE at a much lower price. Let's say $60 with a upside of $100 at maturity and a nice yield in between. Most of the big bond houses trade between themselves now to cut out the banks anyway as market makers. These big bond houses will stand aside for a while till the price gets low enough! haha!

QED:
big thanks for the settings
How did you "steal" those

te-fern, the one hiccup for Black Rock is can GE sell enough assets and what will be left. They have all those young MBAs to do that research. But yes Bane concluded by saying there will be bargains to be had.

What is sad to me is all those bond etf holders will be eating the losses because they weren't willing to pay for a smart person to manage the action.

This is the credit default index for investment grade bonds North America verses our index. GE is one of the reasons for the recent move in CDX

Credit where credit is due:
If you use the Kneupper TICK, or if u use his settings, you might want to VOTE for him here:
https://stockcharts.com/public/3828047/ ... /217834305;

Trades with cats wrote:te-fern, the one hiccup for Black Rock is can GE sell enough assets and what will be left. They have all those young MBAs to do that research. But yes Bane concluded by saying there will be bargains to be had.

What is sad to me is all those bond etf holders will be eating the losses because they weren't willing to pay for a smart person to manage the action.

Yes, I agree with you. Most people don't realize the risk of corporate bonds when things go bad.....

Al_Dente wrote:QED:
big thanks for the settings
How did you "steal" those

I just figured it out from the clues he left on his chart.

Thanks again!

.

QED wrote:

Al_Dente wrote:QED:
big thanks for the settings
How did you "steal" those

I just figured it out from the clues he left on his chart.

Thank again!

.

QED, I also want to say thanks! I'll try to incorporate them this weekend. Pasta boss, thanks for finding them!!

QED wrote:

Al_Dente wrote:QED:
big thanks for the settings
How did you "steal" those

I just figured it out from the clues he left on his chart.
Thank again!
.

it's perfect