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<title>Minyanville - Peter Tchir RSS</title>
<description>
The Trusted Choice for the Wall Street Voice
</description>
<link>
		http://www.minyanville.com</link>
<copyright>
		2013Minyanville Publishing and Multimedia, LLC. All Rights Reserved
</copyright>
		<item>
<title><![CDATA[Taper Talk: A Serious Look at the Fed's Options]]></title>
<link>
			http://www.minyanville.com/mvpremium/2013/05/13/taper-talk-a-serious-look/</link>
<pubDate>
			Mon, 13 May 2013 13:45:00EST
</pubDate>
<guid isPermaLink="true">
			http://www.minyanville.com/mvpremium/2013/05/13/taper-talk-a-serious-look/</guid>
<description>
<![CDATA[This piece is a free sample from Peter Tchir&#39;s Fixed Income Report. For a two-week free trial, including access to Peter&#39;s market commentary and exclusive portfolio strategies, please click here. 

Tamp, Tamper, or Taper

It doesn&rsquo;t matter what you call it, and it doesn&rsquo;t even matter when you call for it, the idea that the Fed may be considering scaling back its easing policies is on the table.

We have finally gotten the highly-anticipated Jon Hilsenrath article. The alleged Fed mouthpiece (I think he has been wrong more than right lately) has come out and written about possible Fed action. ]]>
</description>
<content:encoded>
	<![CDATA[This piece is a free sample from Peter Tchir&#39;s Fixed Income Report. For a two-week free trial, including access to Peter&#39;s market commentary and exclusive portfolio strategies, please click here. 

Tamp, Tamper, or Taper

It doesn&rsquo;t matter what you call it, and it doesn&rsquo;t even matter when you call for it, the idea that the Fed may be considering scaling back its easing policies is on the table.

We have finally gotten the highly-anticipated Jon Hilsenrath article. The alleged Fed mouthpiece (I think he has been wrong more than right lately) has come out and written about possible Fed action. ]]>
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			<item>
<title><![CDATA[Weekly Fixed Income Report: Ignoring is Bliss]]></title>
<link>
			http://www.minyanville.com/mvpremium/2013/03/29/weekly-fixed-income-reporting-ignoring/</link>
<pubDate>
			Fri, 29 Mar 2013 15:15:00EST
</pubDate>
<guid isPermaLink="true">
			http://www.minyanville.com/mvpremium/2013/03/29/weekly-fixed-income-reporting-ignoring/</guid>
<description>
<![CDATA[Ignoring Is Bliss
The S&P 500 finally broke through the 2007 highs.Â  The Dow had achieved that a few weeks ago, and Nasdaq only has 55% more to go to reach it&rsquo;s 2000 highs.

I won&rsquo;t spend much time joining the celebration because it seems to have occurred while ignoring some very real issues.Â  For the first time in weeks, the economic data was not good at all:

	
		Consumer confidence plummeted to 59.7 down from 69.6 and versus expectations of 67.5.Â  While I am hardly a fan of this being useful, it was interesting to see such a big drop, ]]>
</description>
<content:encoded>
	<![CDATA[Ignoring Is Bliss
The S&P 500 finally broke through the 2007 highs.  The Dow had achieved that a few weeks ago, and Nasdaq only has 55% more to go to reach it&rsquo;s 2000 highs.

I won&rsquo;t spend much time joining the celebration because it seems to have occurred while ignoring some very real issues.  For the first time in weeks, the economic data was not good at all:

	
		Consumer confidence plummeted to 59.7 down from 69.6 and versus expectations of 67.5.  While I am hardly a fan of this being useful, it was interesting to see such a big drop, ]]>
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			</item>
			<item>
<title><![CDATA[Weekly Fixed Income ETF Overview & Outlook: Cypress Hill Edition]]></title>
<link>
			http://www.minyanville.com/mvpremium/2013/03/18/weekly-fixed-income-etf-overview/</link>
<pubDate>
			Mon, 18 Mar 2013 13:18:00EST
</pubDate>
<guid isPermaLink="true">
			http://www.minyanville.com/mvpremium/2013/03/18/weekly-fixed-income-etf-overview/</guid>
<description>
<![CDATA[Cyprus
I had planned to look at interest rates across the world.Â  To show where US 10-year yields stood relative to other countries (2% actually looks like a good yield).Â  To show that volatility in treasuries and FX is picking up relative to stocks (a bizarre consequence of global QE).
In the end, I will spend a few minutes on Cyprus.

As part of another &ldquo;bailout&rdquo; in Europe, Cyprus will place a &ldquo;tax&rdquo; on deposits.Â  It is 6.75% on amounts less than &euro;100,000 and 9.9% on amounts above.Â  The numbers are less important than the fact that the EU has ]]>
</description>
<content:encoded>
	<![CDATA[Cyprus
I had planned to look at interest rates across the world.  To show where US 10-year yields stood relative to other countries (2% actually looks like a good yield).  To show that volatility in treasuries and FX is picking up relative to stocks (a bizarre consequence of global QE).
In the end, I will spend a few minutes on Cyprus.

As part of another &ldquo;bailout&rdquo; in Europe, Cyprus will place a &ldquo;tax&rdquo; on deposits.  It is 6.75% on amounts less than &euro;100,000 and 9.9% on amounts above.  The numbers are less important than the fact that the EU has ]]>
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			<item>
<title><![CDATA[Weekly Fixed Income ETF Overview and Outlook]]></title>
<link>
			http://www.minyanville.com/mvpremium/2013/03/11/weekly-fixed-income-etf-overview/</link>
<pubDate>
			Mon, 11 Mar 2013 09:34:00EST
</pubDate>
<guid isPermaLink="true">
			http://www.minyanville.com/mvpremium/2013/03/11/weekly-fixed-income-etf-overview/</guid>
<description>
<![CDATA[A Meaningful Opportunity
We see the trading of this past week as an opportunity to add significant risk across the board.
We have seen a broad sell off in treasuries.Â  That has dragged down the more rate sensitive products with it, primarily investment grade bonds and municipal bonds.Â  Then you have seen the most credit sensitive products rally, with high yield, leveraged loans and EM outperforming.
There are several reasons we see a disconnect but let&rsquo;s run through the important events that have shaped the market.

YellenÂ Â Â Â Â Â Â Â Â Â 
Janet Yellen came out with guns blazing on Monday.Â  She re-iterated her support ]]>
</description>
<content:encoded>
	<![CDATA[A Meaningful Opportunity
We see the trading of this past week as an opportunity to add significant risk across the board.
We have seen a broad sell off in treasuries.  That has dragged down the more rate sensitive products with it, primarily investment grade bonds and municipal bonds.  Then you have seen the most credit sensitive products rally, with high yield, leveraged loans and EM outperforming.
There are several reasons we see a disconnect but let&rsquo;s run through the important events that have shaped the market.

Yellen          
Janet Yellen came out with guns blazing on Monday.  She re-iterated her support ]]>
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			<item>
<title><![CDATA[The 'Platinum Coin Plan' and the Debt Ceiling]]></title>
<link>
			http://www.minyanville.com/business-news/politics-and-regulation/articles/The-2527Platinum-Coin-Plan2527-and-the/1/7/2013/id/47185</link>
<pubDate>
			Mon, 7 Jan 2013 12:35:00EST
</pubDate>
<guid isPermaLink="true">
			http://www.minyanville.com/business-news/politics-and-regulation/articles/The-2527Platinum-Coin-Plan2527-and-the/1/7/2013/id/47185</guid>
<description>
<![CDATA[There is a lot of talk about the trillion dollar coin. That has actually clouded what is an already clouded issue. My understanding is that this is how it would work:

	
		There is a law on the books that allows the Treasury Department to mint platinum coins &ndash; specifically platinum, which is why it is a platinum coin and not gold, silver, or copper; it is a function of the law/loophole/language that coin minters want to use.


	
		The Treasury Department pays our bills, and typically relies on borrowing to do so. But in this case, it would mint coins, deposit ]]>
</description>
<content:encoded>
	<![CDATA[There is a lot of talk about the trillion dollar coin. That has actually clouded what is an already clouded issue. My understanding is that this is how it would work:

	
		There is a law on the books that allows the Treasury Department to mint platinum coins &ndash; specifically platinum, which is why it is a platinum coin and not gold, silver, or copper; it is a function of the law/loophole/language that coin minters want to use.


	
		The Treasury Department pays our bills, and typically relies on borrowing to do so. But in this case, it would mint coins, deposit ]]>
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			<item>
<title><![CDATA[Deal, but So What?]]></title>
<link>
			http://www.minyanville.com/business-news/editors-pick/articles/Deal-But-So-What253F-fiscal-cliff/1/2/2013/id/47055</link>
<pubDate>
			Wed, 2 Jan 2013 10:07:00EST
</pubDate>
<guid isPermaLink="true">
			http://www.minyanville.com/business-news/editors-pick/articles/Deal-But-So-What253F-fiscal-cliff/1/2/2013/id/47055</guid>
<description>
<![CDATA[For now, it looks like the deal gets passed.

The bull case is that it removes uncertainty and lets the market rip higher.

First it is tricky in terms of timing, a huge move on a half-closed Monday on last day of year, then our first day of 2013. An extra level of uncertainty.

Let&#39;s look at what has really happened.

Sequestration pushed off a couple months for the new Congress. It doesn&#39;t seem like we have eliminated uncertainty, just pushed it off

The debt ceiling is next and it is bigger with what seems to be an almost dysfunctional ]]>
</description>
<content:encoded>
	<![CDATA[For now, it looks like the deal gets passed.

The bull case is that it removes uncertainty and lets the market rip higher.

First it is tricky in terms of timing, a huge move on a half-closed Monday on last day of year, then our first day of 2013. An extra level of uncertainty.

Let&#39;s look at what has really happened.

Sequestration pushed off a couple months for the new Congress. It doesn&#39;t seem like we have eliminated uncertainty, just pushed it off

The debt ceiling is next and it is bigger with what seems to be an almost dysfunctional ]]>
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			</item>
			<item>
<title><![CDATA[How Do You Get Your Shirts So Clean?]]></title>
<link>
			http://www.minyanville.com/mvpremium/2012/12/31/how-do-you-get-your/</link>
<pubDate>
			Mon, 31 Dec 2012 09:13:00EST
</pubDate>
<guid isPermaLink="true">
			http://www.minyanville.com/mvpremium/2012/12/31/how-do-you-get-your/</guid>
<description>
<![CDATA[Last Year&rsquo;s Dirty Shirts Did Pretty Well

Personally I don&rsquo;t like the dirty shirt analogy, but it seems to have gained almost as much usage as &ldquo;risk on/risk off&rdquo; and &ldquo;BTD or buy the dip&rdquo; so I will run with it.

Somehow it is always the U.S. that is the cleanest shirt or least dirty shirt or most wearable shirt or something.Â  Pundit after pundit goes on and talks about the U.S. as being the least dirty shirt, basically saying we aren&rsquo;t great but other countries are worse.Â  I have not seen anyone (other than us) say that the U.S. ]]>
</description>
<content:encoded>
	<![CDATA[Last Year&rsquo;s Dirty Shirts Did Pretty Well

Personally I don&rsquo;t like the dirty shirt analogy, but it seems to have gained almost as much usage as &ldquo;risk on/risk off&rdquo; and &ldquo;BTD or buy the dip&rdquo; so I will run with it.

Somehow it is always the U.S. that is the cleanest shirt or least dirty shirt or most wearable shirt or something.  Pundit after pundit goes on and talks about the U.S. as being the least dirty shirt, basically saying we aren&rsquo;t great but other countries are worse.  I have not seen anyone (other than us) say that the U.S. ]]>
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<title><![CDATA[Weekly Fixed Income Overview: Is CCC the New AAA?]]></title>
<link>
			http://www.minyanville.com/mvpremium/2012/12/10/weekly-fixed-income-overview-is/</link>
<pubDate>
			Mon, 10 Dec 2012 08:55:00EST
</pubDate>
<guid isPermaLink="true">
			http://www.minyanville.com/mvpremium/2012/12/10/weekly-fixed-income-overview-is/</guid>
<description>
<![CDATA[Is CCC the new AAA?

No, CCC isn&rsquo;t the new AAA, but the market is starting to trade it that way.
It was a decent week for fixed income, but what stood out for me was the strength in the high yield market.Â  I thought the demand for high yield debt would subside and that the market felt toppy.Â  Well, I was wrong.
The argument for high yield is that QE is effectively working.Â  Money is coming into the fixed income market via the Fed.Â  Supply is low as corporations, particularly high yield companies, aren&rsquo;t issuing right now.Â  This money ]]>
</description>
<content:encoded>
	<![CDATA[Is CCC the new AAA?

No, CCC isn&rsquo;t the new AAA, but the market is starting to trade it that way.
It was a decent week for fixed income, but what stood out for me was the strength in the high yield market.  I thought the demand for high yield debt would subside and that the market felt toppy.  Well, I was wrong.
The argument for high yield is that QE is effectively working.  Money is coming into the fixed income market via the Fed.  Supply is low as corporations, particularly high yield companies, aren&rsquo;t issuing right now.  This money ]]>
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			<item>
<title><![CDATA[CPDOs: Where the Creators and Ratings Agencies Went Wrong]]></title>
<link>
			http://www.minyanville.com/trading-and-investing/fixed-income/articles/structured-credit-CPDO-CDS-CDX-credit/11/12/2012/id/45770</link>
<pubDate>
			Mon, 12 Nov 2012 13:45:00EST
</pubDate>
<guid isPermaLink="true">
			http://www.minyanville.com/trading-and-investing/fixed-income/articles/structured-credit-CPDO-CDS-CDX-credit/11/12/2012/id/45770</guid>
<description>
<![CDATA[MINYANVILLE ORIGINAL

Ratings and Rating Agencies
Before going into the details of how a CPDO (Constant Proportion Debt Obligation) works, it is worth talking about what rating agencies are, and what they do. The "big three" are Standard & Poor&#39;s, a division of McGraw-Hill (NYSE:MHP)&#39; Moody&#39;s Investor Service (NYSE:MCO); and Fitch Ratings, a joint subsidary of FIMALAC (PINK:FMLCF) and privately-owned Hearst Corporation.

I think in most cases rating agencies do a good job, yet I would never rely on them.  I think their "single name" issuer ratings have had a pretty decent history. This is the part of the business ]]>
</description>
<content:encoded>
	<![CDATA[MINYANVILLE ORIGINAL

Ratings and Rating Agencies
Before going into the details of how a CPDO (Constant Proportion Debt Obligation) works, it is worth talking about what rating agencies are, and what they do. The "big three" are Standard & Poor&#39;s, a division of McGraw-Hill (NYSE:MHP)&#39; Moody&#39;s Investor Service (NYSE:MCO); and Fitch Ratings, a joint subsidary of FIMALAC (PINK:FMLCF) and privately-owned Hearst Corporation.

I think in most cases rating agencies do a good job, yet I would never rely on them.  I think their "single name" issuer ratings have had a pretty decent history. This is the part of the business ]]>
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<title><![CDATA[Heart, Head, Gut]]></title>
<link>
			http://www.minyanville.com/mvpremium/2012/09/17/heart-head-gut/</link>
<pubDate>
			Mon, 17 Sep 2012 08:20:00EST
</pubDate>
<guid isPermaLink="true">
			http://www.minyanville.com/mvpremium/2012/09/17/heart-head-gut/</guid>
<description>
<![CDATA[I had a strong, even visceral, reaction to the Fed&rsquo;s announcement Thursday.Â  I was wrong in that I thought they would back down with stocks at highs, housing showing some signs of stability, high gas prices, some real potential ECB intervention in Europe, etc.Â  I was wrong.Â  I was also wrong when I thought the initial muted reaction was a sign that aggressive QE was priced in.

I&rsquo;ve been wrong before and I&rsquo;ll be wrong again, but something about this really bothers me.Â  I disagree so strongly with the Fed&rsquo;s decision that I need to take that &ldquo;anger&rdquo; into account ]]>
</description>
<content:encoded>
	<![CDATA[I had a strong, even visceral, reaction to the Fed&rsquo;s announcement Thursday.  I was wrong in that I thought they would back down with stocks at highs, housing showing some signs of stability, high gas prices, some real potential ECB intervention in Europe, etc.  I was wrong.  I was also wrong when I thought the initial muted reaction was a sign that aggressive QE was priced in.

I&rsquo;ve been wrong before and I&rsquo;ll be wrong again, but something about this really bothers me.  I disagree so strongly with the Fed&rsquo;s decision that I need to take that &ldquo;anger&rdquo; into account ]]>
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<title><![CDATA[T Report: A Plausible Bear Path]]></title>
<link>
			http://www.minyanville.com/mvpremium/2012/09/11/t-report-a-plausible-bear/</link>
<pubDate>
			Tue, 11 Sep 2012 09:35:00EST
</pubDate>
<guid isPermaLink="true">
			http://www.minyanville.com/mvpremium/2012/09/11/t-report-a-plausible-bear/</guid>
<description>
<![CDATA[I&rsquo;m bearish, but I&rsquo;m not expecting or looking for a big move down. It is more that I think there is a greater chance of asset prices declining from recent levels, than going up, and some small chance the decline cascades as bullish sentiment has grown.

The Bear Path
I see the potential for a series of small events to line up in a way that drives stock prices lower. No single event is critical, and certainly a range of outcomes exist, it just seems to me that the following path lower is the most likely outcome.

	
		Rajoy doesn&rsquo;t embrace ]]>
</description>
<content:encoded>
	<![CDATA[I&rsquo;m bearish, but I&rsquo;m not expecting or looking for a big move down. It is more that I think there is a greater chance of asset prices declining from recent levels, than going up, and some small chance the decline cascades as bullish sentiment has grown.

The Bear Path
I see the potential for a series of small events to line up in a way that drives stock prices lower. No single event is critical, and certainly a range of outcomes exist, it just seems to me that the following path lower is the most likely outcome.

	
		Rajoy doesn&rsquo;t embrace ]]>
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			<item>
<title><![CDATA[The World of LIBOR and Worst Case Lawsuits]]></title>
<link>
			http://www.minyanville.com/business-news/politics-and-regulation/articles/LIBOR-lawsuit-manipulation-Barclays-BBA-british/7/11/2012/id/42330</link>
<pubDate>
			Wed, 11 Jul 2012 15:10:00EST
</pubDate>
<guid isPermaLink="true">
			http://www.minyanville.com/business-news/politics-and-regulation/articles/LIBOR-lawsuit-manipulation-Barclays-BBA-british/7/11/2012/id/42330</guid>
<description>
<![CDATA[We believe that we are in the early stages of what will happen with LIBOR.  As our firm wrote yesterday, we believe there are two distinct phases of the pre-crisis period: The first phase saw potential manipulation of small amounts in both directions up and down, and second crisis phase was when LIBOR was allegedly much lower than the rate at which banks would realistically lend to each other. Much of this is supported by the FSA case against Barclays.

Submitting Banks
The process starts with the "submitting" banks.  These are the banks that provide levels to Thomson Reuters for ]]>
</description>
<content:encoded>
	<![CDATA[We believe that we are in the early stages of what will happen with LIBOR.  As our firm wrote yesterday, we believe there are two distinct phases of the pre-crisis period: The first phase saw potential manipulation of small amounts in both directions up and down, and second crisis phase was when LIBOR was allegedly much lower than the rate at which banks would realistically lend to each other. Much of this is supported by the FSA case against Barclays.

Submitting Banks
The process starts with the "submitting" banks.  These are the banks that provide levels to Thomson Reuters for ]]>
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<title><![CDATA[More Fun Facts About LIBOR: "Crisis" Seems to Start Post-Lehman]]></title>
<link>
			http://www.minyanville.com/trading-and-investing/fixed-income/articles/LIBOR-investigation-Barclays-CDS-funding-interbank/7/10/2012/id/42310</link>
<pubDate>
			Tue, 10 Jul 2012 16:10:00EST
</pubDate>
<guid isPermaLink="true">
			http://www.minyanville.com/trading-and-investing/fixed-income/articles/LIBOR-investigation-Barclays-CDS-funding-interbank/7/10/2012/id/42310</guid>
<description>
<![CDATA[I figured it was worth looking at some LIBOR data. I picked on seven banks:  Barclays (BCS), Citi (C), UBS AG (UBS), JPMorgan (JPM), Royal Bank of Scotland (RBS), Deutsche Bank (DB), and Mitsubishi UFJ Financial Group (MTU) largely to get a cross section from different countries.

The first thing I did was look at the range of submissions for three month LIBOR. I took the difference between the higher and lowest submission from these seven banks.



The range was miniscule for the first part of 2007, but by the summer, there started to be noticeable differences between the best ]]>
</description>
<content:encoded>
	<![CDATA[I figured it was worth looking at some LIBOR data. I picked on seven banks:  Barclays (BCS), Citi (C), UBS AG (UBS), JPMorgan (JPM), Royal Bank of Scotland (RBS), Deutsche Bank (DB), and Mitsubishi UFJ Financial Group (MTU) largely to get a cross section from different countries.

The first thing I did was look at the range of submissions for three month LIBOR. I took the difference between the higher and lowest submission from these seven banks.



The range was miniscule for the first part of 2007, but by the summer, there started to be noticeable differences between the best ]]>
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			<item>
<title><![CDATA[Facts About LIBOR and the Potential Implications]]></title>
<link>
			http://www.minyanville.com/mvpremium/2012/07/09/facts-about-libor-and-the/</link>
<pubDate>
			Mon, 9 Jul 2012 16:07:00EST
</pubDate>
<guid isPermaLink="true">
			http://www.minyanville.com/mvpremium/2012/07/09/facts-about-libor-and-the/</guid>
<description>
<![CDATA[LIBOR Is Getting &ldquo;Streakier&rdquo;

LIBOR is becoming less volatile. Part of that is the fact that the Fed is at ZIRP and all banks are supported, but it is interesting to look at these streaks, which are the number of days in a row that LIBOR changed by less than 1 basis point in either direction.Â  We are currently in a streak that has lasted almost two years!Â  Yes, for two years now, we have not had a daily change in LIBOR of more than one bp.



Basically since the end of the financial crisis, LIBOR has been very &ldquo;stable.&rdquo;Â  ]]>
</description>
<content:encoded>
	<![CDATA[LIBOR Is Getting &ldquo;Streakier&rdquo;

LIBOR is becoming less volatile. Part of that is the fact that the Fed is at ZIRP and all banks are supported, but it is interesting to look at these streaks, which are the number of days in a row that LIBOR changed by less than 1 basis point in either direction.  We are currently in a streak that has lasted almost two years!  Yes, for two years now, we have not had a daily change in LIBOR of more than one bp.



Basically since the end of the financial crisis, LIBOR has been very &ldquo;stable.&rdquo;  ]]>
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			<item>
<title><![CDATA[Facts About LIBOR and the Potential Implications]]></title>
<link>
			http://www.minyanville.com/business-news/politics-and-regulation/articles/LIBOR-bank-Bear-Stearns-Fannie-Mae/7/9/2012/id/42269</link>
<pubDate>
			Mon, 9 Jul 2012 15:10:00EST
</pubDate>
<guid isPermaLink="true">
			http://www.minyanville.com/business-news/politics-and-regulation/articles/LIBOR-bank-Bear-Stearns-Fannie-Mae/7/9/2012/id/42269</guid>
<description>
<![CDATA[LIBOR Is Getting "Streakier"

LIBOR is becoming less volatile. Part of that is the fact that the Fed is at ZIRP and all banks are supported, but it is interesting to look at these streaks, which are the number of days in a row that LIBOR changed by less than 1 basis point in either direction.  We are currently in a streak that has lasted almost two years!  Yes, for two years now, we have not had a daily change in LIBOR of more than one bp.



Basically since the end of the financial crisis, LIBOR has been very "stable." ]]>
</description>
<content:encoded>
	<![CDATA[LIBOR Is Getting "Streakier"

LIBOR is becoming less volatile. Part of that is the fact that the Fed is at ZIRP and all banks are supported, but it is interesting to look at these streaks, which are the number of days in a row that LIBOR changed by less than 1 basis point in either direction.  We are currently in a streak that has lasted almost two years!  Yes, for two years now, we have not had a daily change in LIBOR of more than one bp.



Basically since the end of the financial crisis, LIBOR has been very "stable." ]]>
</content:encoded>
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			<item>
<title><![CDATA[Everything You Wanted to Know About LIBOR, but Were Afraid to Ask]]></title>
<link>
			http://www.minyanville.com/business-news/politics-and-regulation/articles/LIBOR-interbank-lending-loans-balance-sheet/7/3/2012/id/42167</link>
<pubDate>
			Tue, 3 Jul 2012 11:50:00EST
</pubDate>
<guid isPermaLink="true">
			http://www.minyanville.com/business-news/politics-and-regulation/articles/LIBOR-interbank-lending-loans-balance-sheet/7/3/2012/id/42167</guid>
<description>
<![CDATA[How is LIBOR calculated?

The UK trade association BBA provides a fairly detailed analysis of the process. The key here is what the rate is meant to be. The contributors are supposed to submit a rate for each currency they contribute for overnight, one week, two week, and monthly out to a year. The rate is meant to answer the question: "At what rate could you borrow funds, were you to do so by asking for and then accepting inter-bank offers in a reasonable market size just prior to 11 a.m.?"

This is a bit like self-reporting your weight.

The ]]>
</description>
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	<![CDATA[How is LIBOR calculated?

The UK trade association BBA provides a fairly detailed analysis of the process. The key here is what the rate is meant to be. The contributors are supposed to submit a rate for each currency they contribute for overnight, one week, two week, and monthly out to a year. The rate is meant to answer the question: "At what rate could you borrow funds, were you to do so by asking for and then accepting inter-bank offers in a reasonable market size just prior to 11 a.m.?"

This is a bit like self-reporting your weight.

The ]]>
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<title><![CDATA[Why Italy Is OK: Expert Analysis]]></title>
<link>
			http://www.minyanville.com/business-news/editors-pick/articles/EFSF-ESM-italy-european-bailout-guarantee/6/14/2012/id/41731</link>
<pubDate>
			Thu, 14 Jun 2012 10:50:00EST
</pubDate>
<guid isPermaLink="true">
			http://www.minyanville.com/business-news/editors-pick/articles/EFSF-ESM-italy-european-bailout-guarantee/6/14/2012/id/41731</guid>
<description>
<![CDATA[There is so much confusion about the European Stability Mechanism (ESM) or European Financial Stability Facility (EFSF) funding costs.  How it works, how it affects countries, etc.  Here is how it works.

&euro;1 Billion of EFSF Borrowing
The EFSF sells bonds to the market.  They have already issued &euro;109 billion of bonds, so they are a meaningful issuer and buyers at this stage understand how it works.  The bonds are backed by "guarantees" from member countries with an "overcollateralization factor."



The key is that for every &euro;1 billion of bonds issued, you get a billion of guarantees from useful countries. ]]>
</description>
<content:encoded>
	<![CDATA[There is so much confusion about the European Stability Mechanism (ESM) or European Financial Stability Facility (EFSF) funding costs.  How it works, how it affects countries, etc.  Here is how it works.

&euro;1 Billion of EFSF Borrowing
The EFSF sells bonds to the market.  They have already issued &euro;109 billion of bonds, so they are a meaningful issuer and buyers at this stage understand how it works.  The bonds are backed by "guarantees" from member countries with an "overcollateralization factor."



The key is that for every &euro;1 billion of bonds issued, you get a billion of guarantees from useful countries. ]]>
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<title><![CDATA[Europe's Deal With Spain: Change of Attitude or One More Last-Minute Plea Bargain?]]></title>
<link>
			http://www.minyanville.com/business-news/politics-and-regulation/articles/spain-esm-frob-spanish-sovereign-debt/6/10/2012/id/41617</link>
<pubDate>
			Sun, 10 Jun 2012 13:25:00EST
</pubDate>
<guid isPermaLink="true">
			http://www.minyanville.com/business-news/politics-and-regulation/articles/spain-esm-frob-spanish-sovereign-debt/6/10/2012/id/41617</guid>
<description>
<![CDATA[On a stand-alone basis, the deal announced yesterday does relatively little for Europe. It once again looks like a last-ditch attempt to cobble together something to appease the markets. It relies on the European Stability Mechanism, which hasn't yet been set up. It lends to the Fondo de Reestructuration Ordenada Bancaria (FROB) rather than to Spain or capitalizing banks directly, creating some potential confusion. The plan, under the most positive interpretations, is reasonably meaningful to Spain, and under the worst execution, may do virtually nothing even in Spain.

The key is whether there has been a shift in attitude in ]]>
</description>
<content:encoded>
	<![CDATA[On a stand-alone basis, the deal announced yesterday does relatively little for Europe. It once again looks like a last-ditch attempt to cobble together something to appease the markets. It relies on the European Stability Mechanism, which hasn't yet been set up. It lends to the Fondo de Reestructuration Ordenada Bancaria (FROB) rather than to Spain or capitalizing banks directly, creating some potential confusion. The plan, under the most positive interpretations, is reasonably meaningful to Spain, and under the worst execution, may do virtually nothing even in Spain.

The key is whether there has been a shift in attitude in ]]>
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<title><![CDATA[Spain: Is Europe Finally Committing Its Own Funds With Proper Oversight?]]></title>
<link>
			http://www.minyanville.com/business-news/politics-and-regulation/articles/eu-crisis-sovereign-debt-spanish-banking/6/10/2012/id/41615</link>
<pubDate>
			Sun, 10 Jun 2012 10:40:00EST
</pubDate>
<guid isPermaLink="true">
			http://www.minyanville.com/business-news/politics-and-regulation/articles/eu-crisis-sovereign-debt-spanish-banking/6/10/2012/id/41615</guid>
<description>
<![CDATA[With another full day ahead of this, things could change, but here is how I understand the situation.
 
In the EFSF "guidelines" there was this little statement
 

	ii) Finance recapitalization of financial institutions through loans to governments including in non-programme countries
 
It looks like the EFSF/ESM will lend money to something called the FROB which is either short for "Fondo de Reestructuration Ordenada Bancaria" or "Fund for Orderly Bank Restructuring."  FROB already has about &euro;14 billion of debt outstanding and does roll up into total Spanish debt.
 
So, rather than have the EFSF/ESM lend to Spain, they have chosen to ]]>
</description>
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	<![CDATA[With another full day ahead of this, things could change, but here is how I understand the situation.
 
In the EFSF "guidelines" there was this little statement
 

	ii) Finance recapitalization of financial institutions through loans to governments including in non-programme countries
 
It looks like the EFSF/ESM will lend money to something called the FROB which is either short for "Fondo de Reestructuration Ordenada Bancaria" or "Fund for Orderly Bank Restructuring."  FROB already has about &euro;14 billion of debt outstanding and does roll up into total Spanish debt.
 
So, rather than have the EFSF/ESM lend to Spain, they have chosen to ]]>
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<title><![CDATA['Schadenfreude' Is a German Word]]></title>
<link>
			http://www.minyanville.com/business-news/markets/articles/germany-european-debt-crisis-EIB-ECB/6/5/2012/id/41509</link>
<pubDate>
			Tue, 5 Jun 2012 12:25:00EST
</pubDate>
<guid isPermaLink="true">
			http://www.minyanville.com/business-news/markets/articles/germany-european-debt-crisis-EIB-ECB/6/5/2012/id/41509</guid>
<description>
<![CDATA[The market is relatively stable overnight and this morning. Yesterday we traded in fits and starts with brief moments of concern that Friday's sell-off would continue and brief moments of hope that Europe was going to do something to fix the situation in Europe. Trading was on light volume and liquidity seemed low as gaps of five points on the S&P 500 seemed the norm.

With the UK shut for a second day due to the Queen's diamond jubilee, there isn't much of a read on credit markets in Europe. Spanish and Italian 10-year bond yields are better for the ]]>
</description>
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	<![CDATA[The market is relatively stable overnight and this morning. Yesterday we traded in fits and starts with brief moments of concern that Friday's sell-off would continue and brief moments of hope that Europe was going to do something to fix the situation in Europe. Trading was on light volume and liquidity seemed low as gaps of five points on the S&P 500 seemed the norm.

With the UK shut for a second day due to the Queen's diamond jubilee, there isn't much of a read on credit markets in Europe. Spanish and Italian 10-year bond yields are better for the ]]>
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<title><![CDATA[What Could Have Happened at JPMorgan?]]></title>
<link>
			http://www.minyanville.com/business-news/editors-pick/articles/JPM-JPMORGAN-synthetic-CDOs-synthetic-credit/5/11/2012/id/40951</link>
<pubDate>
			Fri, 11 May 2012 11:00:00EST
</pubDate>
<guid isPermaLink="true">
			http://www.minyanville.com/business-news/editors-pick/articles/JPM-JPMORGAN-synthetic-CDOs-synthetic-credit/5/11/2012/id/40951</guid>
<description>
<![CDATA[Well, for once it&#39;s not Spain or Greece in the news. It&#39;s JPMorgan (JPM) and the synthetic CDO, or collateralized debt obligations.

This is the end of synthetic CDOs and may well be the end of credit default swap, or CDS, as an over the counter product, but we have time to look at that later. There is a lot of information and misinformation out there.

For now, the key is what is this going to do for the markets.

As best as I can tell, they were generally short High Yield credit default swaps, or HYs, risk. They were ]]>
</description>
<content:encoded>
	<![CDATA[Well, for once it&#39;s not Spain or Greece in the news. It&#39;s JPMorgan (JPM) and the synthetic CDO, or collateralized debt obligations.

This is the end of synthetic CDOs and may well be the end of credit default swap, or CDS, as an over the counter product, but we have time to look at that later. There is a lot of information and misinformation out there.

For now, the key is what is this going to do for the markets.

As best as I can tell, they were generally short High Yield credit default swaps, or HYs, risk. They were ]]>
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<title><![CDATA[Fixed Income Allocation: 7 Places to Put Your Cash Today]]></title>
<link>
			http://www.minyanville.com/trading-and-investing/fixed-income/articles/fixed-income-asset-allocation-credit-bonds/5/1/2012/id/40727</link>
<pubDate>
			Tue, 1 May 2012 14:35:00EST
</pubDate>
<guid isPermaLink="true">
			http://www.minyanville.com/trading-and-investing/fixed-income/articles/fixed-income-asset-allocation-credit-bonds/5/1/2012/id/40727</guid>
<description>
<![CDATA[Timing in fixed income markets can be as important as it is in equities.  With so many more liquid opportunities in fixed income now compared to the past, this is a meaningful risk management tool.  This "active" component will also include ideas in equity and commodity markets as appropriate, but largely driven by activity and signals from the fixed income markets.

My firm continues to believe that we are at an inflection point in the markets.  There is a real risk that the problems in Europe will escalate and that in spite of all the efforts of various parties, we ]]>
</description>
<content:encoded>
	<![CDATA[Timing in fixed income markets can be as important as it is in equities.  With so many more liquid opportunities in fixed income now compared to the past, this is a meaningful risk management tool.  This "active" component will also include ideas in equity and commodity markets as appropriate, but largely driven by activity and signals from the fixed income markets.

My firm continues to believe that we are at an inflection point in the markets.  There is a real risk that the problems in Europe will escalate and that in spite of all the efforts of various parties, we ]]>
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<title><![CDATA[Speaking of the Egan-Jones Lawsuit...]]></title>
<link>
			http://www.minyanville.com/business-news/politics-and-regulation/articles/rating-agencies-egan-jones-SEC-ratings/4/25/2012/id/40615</link>
<pubDate>
			Wed, 25 Apr 2012 11:45:00EST
</pubDate>
<guid isPermaLink="true">
			http://www.minyanville.com/business-news/politics-and-regulation/articles/rating-agencies-egan-jones-SEC-ratings/4/25/2012/id/40615</guid>
<description>
<![CDATA[So Egan-Jones is being sued by the SEC.  The primary reason is that the company allegedly overstated its experience in rating government bonds and asset-backed securities, or ABS. It also looks like Egan-Jones twice rated companies that employees owned stock in.

I certainly disagreed with Egan-Jones on their assessment of Jefferies (JEF), and in that case, I turned out to be correct, but they are not being sued for having incorrect ratings; they are being sued because their application (done in 2008) overstated their skills.  Why that wasn't checked in 2008 is a bit of a mystery to me, as ]]>
</description>
<content:encoded>
	<![CDATA[So Egan-Jones is being sued by the SEC.  The primary reason is that the company allegedly overstated its experience in rating government bonds and asset-backed securities, or ABS. It also looks like Egan-Jones twice rated companies that employees owned stock in.

I certainly disagreed with Egan-Jones on their assessment of Jefferies (JEF), and in that case, I turned out to be correct, but they are not being sued for having incorrect ratings; they are being sued because their application (done in 2008) overstated their skills.  Why that wasn't checked in 2008 is a bit of a mystery to me, as ]]>
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<title><![CDATA[The Day Austerity Died]]></title>
<link>
			http://www.minyanville.com/business-news/markets/articles/austerity-Germany-Eurozone-GM-Apple-earnings/4/24/2012/id/40575</link>
<pubDate>
			Tue, 24 Apr 2012 10:10:00EST
</pubDate>
<guid isPermaLink="true">
			http://www.minyanville.com/business-news/markets/articles/austerity-Germany-Eurozone-GM-Apple-earnings/4/24/2012/id/40575</guid>
<description>
<![CDATA[Futures are up, Italian and Spanish bonds are up, CDS spreads on them are at least 10 bps tighter, and MAIN (European Investment Grade CDX Index) is 3 bps tighter on the day (though I have this feeling I better type fast as we are starting to fade off the best levels).

Lots of little things seem to be contributing to the strength: United Technologies (UTX) earnings, no economic data, auctions that raised the required money, etc., but there does also seem to be a belief that Germany finally "gets it." Germany is finally going to relent on their demands ]]>
</description>
<content:encoded>
	<![CDATA[Futures are up, Italian and Spanish bonds are up, CDS spreads on them are at least 10 bps tighter, and MAIN (European Investment Grade CDX Index) is 3 bps tighter on the day (though I have this feeling I better type fast as we are starting to fade off the best levels).

Lots of little things seem to be contributing to the strength: United Technologies (UTX) earnings, no economic data, auctions that raised the required money, etc., but there does also seem to be a belief that Germany finally "gets it." Germany is finally going to relent on their demands ]]>
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