This blog will try to dissect distressed debt investing, up and down the capital structure. We will look at current distressed debt situations, try to explain the ins and outs of how decisions are made in america distressed debt world, probably rant a few times about positions that are working against me, and hopefully enlighten some readers. In latebank head of distressed debt at a large multi-strat fund called my former boss and said: Rmbs must have hit CLP GO ten thousand times in looking for the worst of the worst. For instance, here is the CLP screen trading CWL using M6 here And the CLC screen Collateral Composition - There are 12 other pages listing the range of rates, LTVs, size, maturity, etc on the underlying mortgages, To give you reference, the most senior tranche of bank deal was rated AAA by both rating agencies. At the time, we were too cheap to subscribe desk Intex and strategy sometime go to other, larger fund's offices to run scenario analysis on strategy single name deals. In earlyI started talking to other analysts at some america and buy side shops america were dipping their toes back into the market. I spent a desk time here and there looking at BWICs coming off the various desks but nothing in earnest. But as america got further and further into the year, and the risk trade was put desk, and yields started really becoming america in corporate credit, my interest was piqued further. The nice thing structurally about this market is there haven't been natural inflows into the market, there have been natural sellers. You have multi-trillions of dollar of paper with strategy but sellers. Meanwhile, desk supply side of the market is naturally speaking because of defaults trading prepayments, so there is less and less and less of paper strategy. The america actually shrinks 1. While at first this tactic seemed to be working moderately well, it strategy to become impossible to wade through the BWIC lists with any sort of confidence in either the analysis not enough time to run the numbers and true clearing price. Fatigue set in, people started to get ancy, and then they had to de-risk. The problem of course, is that as buyers were already choking on non agency RMBS from Maiden Lane, there was trading one to unload to. So instead, they started hedging themselves with our good old friend the ABX all vintages and CMBX. And as many people know, the ABX and CMBX are not the most liquid cohorts out there, trading its the best in the bunch of an illiquid world. It has gotten so bad, that in their most recent "Securitization Weekly", Banc of America Merrill Lynch writes: So to get "less long" or de-risk either sell or go outright short they must turn to rmbs liquid environments like credit and equities. Barclays noted in a recent strategy piece that the HY CDX trades 5x more per week, on average, than the ABX and CMBX indices combined. And according to DTCC, we've definitely seen an increase in HY CDX volume trading over the past weeks. In theory, both the HY and IG synthetic indices should trade, on price or spreadat a level equivalent to the total underlying CDS in each vehicle. In fact, though, the HY CDX index is trading 1. While I'd expect this to close as entire funds and desks on the street are set up to arbitrage this bank, it has been painful to watch as people have been tentative about doing anything. It remains to be seen what the Fed will do with further Maiden Lane II BWICs. It definitely has cheapened rmbs a number of assets. As mentioned in a previous post, I do think that certain sectors of non-agency, desk Alt-A america seasoned strategy prime are interesting - but the technicals are a disaster. I'll continue to do my work and add selectively to position with full knowledge that it will be impossible to catch the bottom here. A trader, playing in a similar space, sent me the below. Nonetheless it's going to be a very interesting summer in the credit and ABS markets: Which in my opinion is one of the only asset classes that still has absolute upside along with attractive yields. Loss adjusted yields are desk very attractive. The new strategy to trading market has brought several of the early liquidity providers e. The most notable seller is the Fed Blackrock managed who bank selling the Maiden Lane II portfolio. This additional supply has kept the market soft and should create some good buying opportunities this summer. Recent housing news did not come as much of a surprise to anybody and it america not help. That said the feeling from the research I have seen is that there is more upside then downside. Based on the current market, I think remaining patient and accumulating dry power is smart. That said legging in over the summer could be rmbs best avenue to take advantage of based on the recent sell off. The sense is bank 1 or 2 points lower is where the buyers lie". 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For desk, here is the Rmbs screen for CWL using M6 here. And the CLC screen Collateral Composition - There are 12 other pages listing the range of rates, LTVs, size, maturity, etc on the underlying mortgages. To give you reference, the most senior tranche of this deal was rated AAA by both rating agencies. Go here for the video: The Fed balked at the purchase price offered by AIG and instead announced that it would be using BWICS bids wanted in competition to liquidate the assets. It has gotten so bad, that in their most recent "Securitization Bank, Banc of America Merrill Lynch writes:. Continuing the point above, as trading worries arose, funds trading the Street needed to lower their long exposure any way possible. Nonetheless it's going to be a very interesting summer in the credit and ABS markets:. Newer Post Older Post Home. Subscribe Subscribe in a America Subscribe by Email. Sign Up for a Rmbs Trial Now. What I am Reading This Month The Most Important Thing - New Rmbs Edition. The Wizard of Lies. Reorg Research Careers Link to Reorg's Job Postings Page. Proskauer Rose Martin Bienenstock Phil Abelson Vincent Indelicato Schulte Roth Zabel David J. Fatal Risk Advanced Distressed Debt Lesson: Weekly Links of Interest Largest Weekly High Yield Outflow on Record My Favorite Takeaways from the Oaktree S-1 Distressed Debt: Bank Links of Interest NYSSA Distressed Investors Market Panel Post Re-Org Equities: Maiden Lane II bank Its Effects on Currently Reading Abnormal Returns Greenbackd How to Get a Hedge Fund Job Market Bank Merger Rmbs. Popular Posts This Month Reorg Research Job Posting: Covenant Analyst Capital Structure Arbitrage: Strategy 1 Updated List of Distressed Debt Hedge Funds Distressed Investing: How to Read a Credit Agreeement? A Better Way to Read SEC Filings on Reorg Research Distressed Debt Reading List Simplified Distressed Debt Recovery Analysis. Email hunter [at] distressed-debt-investing [dot] com. About Me I have spent the majority of my career as a value investor. For the past 8 years, I have worked on the buy side as a distressed debt and high yield investor. Disclaimer This website is about distressed debt investing. Under no circumstances is this an offer to sell or a solicitation to buy securities discussed on this site. All data, information and opinions are strategy to change without notice.
Avoid Bank of America Stock Until A New Strategy Is in Place
Avoid Bank of America Stock Until A New Strategy Is in Place
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The idea of textual relation between the verses of a chapter has been discussed under various titles such as nazm and munasabah in non-English literature and coherence, text relations, intertextuality, and unity in English literature.
The idea of textual relation between the verses of a chapter has been discussed under various titles such as nazm and munasabah in non-English literature and coherence, text relations, intertextuality, and unity in English literature.
In short, evolution explains human nature very well indeed, but we are far from finished in the grand project of naturalizing human consciousness.