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Morning Round-Up: Citigroup, Bank of England, LIBOR


Missed out this morning? Let's get you up to speed!


What was all the Buzz about on this morning's Buzz? It's all gathered here for your reading enjoyment!

The Hump Day Chew Toy - 7:47 AM

What did I do last night? Work. No, really. On the heels of the long weekend and in the midst of a nosty battle with my inbox and SPAM filter, I chewed through the content in the 'Ville to gather my thoughts.

What stood out to my tired eyes? The savvy soothsayin' Jeff Saut, for one, and Mr. Practical's Mailbag, for deux.

The latter matter provides a good context in understanding WHY Minyans should care that LIBOR is trading higher in the face of rate-cut speculation.

Banks, many of them European, are carrying heavy debt tied to the commercial paper market. They're reluctant to lend (which is driving LIBOR higher) out of fear that the counter-parties (other banks) might not be in a position to pay back loans.

That, along with the WSJ article that Citigroup (which owns 25% of the "structured investment vehicle" market with nearly $100 billion in conduit exposure) are the reasons for the crimson seasoning this morning.

Wait, what's conduit exposure? Glad you asked--that's why we're here!


Gate Sniffage - 10:20 AM

  • Whataya say, Booja De? As go the piggies, so goes the poke. We spoke about the two prime catalysts for today's crimson spin earlier in the session (come on now, I'm up, YOU'RE UP!) and this complex remains front and center in as a Hump Day tell.

  • What stands out? Green seeds in gap lowers (and red spreads in green seas). As it stands, and just sayin', beta (YHOO, EBAY, AMZN, AAPL, BIDU) and biotech (AMGN) trade well, along with the drillers, which hang tough.

  • Yes I have a position but... I'm loving this week's Hoofy and Boo show. And, if you haven't read the attendant content (including Macke's Seven Deadly Sin Stocks and Red's anti-social investing), I would be sure to put 'em on your daily "to do" list!

  • Thank you sir may I have another!?!? As discussed while Hoofy was paddlin' Boo seven ways till Sunday, I quietly added S&P puts into the Labor Day rippage. I'm not chest bumpin' (the trade is still open and far from over), just sharing as I watch NYSE internals (5:1 negative) and upcoming levels (yesterday's low in the S&P (right here) and the 200-day at 1460).

  • Lehman Brothers pushed back earnings to the day of the FOMC decision due to the Jewish holidays? Haven't they known about the High Holy days for some time now? OH--my bad--those were the Loehman Brothers. Nevermind.

  • My better contacts tell me that lotsa hedgies have protection on and exposure is down across the board. In addition, I'm being told that THE top tier investment banks (hint: they're playing leapfrog) put limits on their option desk's "size" of facilitation. I'm unsure what this means near-term or big picture but it's very consistent with the risk reduction theme (the other side of volatility) that we've been chewing through in the 'Ville.

  • So, I left my instant message on at home yesterday and was somewhat concerned that someone was sending IM's to my friends. I arrived back at Chez Harrison to find fat Phoebe sitting on my keyboard. Evidently, "PF*&%23Y" means "feed me" in feline transliteration.

  • Good luck Minyans--let's hit 'em hard.


Answers I Really Wanna Know - 11:26 AM

  • Has anyone seen my nuclear warheads?

  • Do you see how many layers of resistance reside directly above for the transports?

  • If Hoofy is to have faith in the Fed engineering economic resolution, don't the trannies have to mount those technical humps?

  • If there's nothing to worry about, why are the ECB and Bank of England at Def-Con One?

  • Do you recognize the difference between German loss and German loss?

  • Does the ursine translation of LIBOR mean "Love Is Better On Redemptions?"

  • While time is the most precious of commodities (thanks Ruby), is credibility a close second these days?

  • Is anyone not picking my beloved Raiders to be cellar dwellers in the AFC West again?

  • Wouldn't it be great if we could "sell hope and buy despair" in the NFL?

  • Will you be joining us for tomorrow night's Rolling Bones Manhattan Minyanfest?

Position in S&P.

Todd Harrison is the founder and Chief Executive Officer of Minyanville. Prior to his current role, Mr. Harrison was President and head trader at a $400 million dollar New York-based hedge fund. Todd welcomes your comments and/or feedback at

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