Central Perk: 14 ian. 2011

vineri, 14 ianuarie 2011

Mish's Global Economic Trend Analysis

Economic Outlook in "Stick Figures" that Anyone Can Understand

Posted: 14 Jan 2011 02:21 PM PST

Jason Leach, Director of Research and Portfolio Manager for Cravens Brothers sent me an interesting link to a book of pages he wrote, done with stick figures, to help explain "The Age of De-Leveraging", the "Botox Economy" and the "Accordion-Shaped Recovery", terms he coined about a year ago.

Page Two - Home Prices Collapse in "The Great Recession"

Page Six - European Sovereign Debt Whack-a-Mole "PIIGS"

Page Eight - Questions the Thesis "China Leads the Recovery"

Those are pages Two, Six, and Eight out of 12. Inquiring minds will want to read the entire "book". It may take a while (20 seconds or so) to load.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List

Junk Bonds and Leveraged Buyouts: Here We Go Again, with "Disturbingly High" Debt Issuance

Posted: 14 Jan 2011 12:31 PM PST

In the mad dash for yield it's a case of "here we go again". No one cares about risk, or valuation. It is doubtful anyone cares about relative values. In fact, it appears as if there is no care at all.

This is part of the reckless "success" Bernanke initiated with Quantitative Easing Part II that he is now bragging about.

Please consider Junk Borrowers Turn Tables With Looser Terms.

MGM Resorts International and CommScope Inc. are leading junk-rated companies selling debt with less protection for investors as high-yield bond offerings soar to more than double last year's weekly pace.

MGM's CityCenter Holdings LLC joint venture issued $600 million of notes that can pay interest in cash or additional debt, the largest such offering in more than a year, according to data compiled by Bloomberg. CommScope sold $1.5 billion of bonds with covenants that permit a "disturbingly high" amount of new debt, research firm Covenant Review LLC said.

"Credits that even a year ago, six months ago, would have had trouble coming, are having no trouble," said Marc Gross, a money manager in New York at RS Investments, which oversees $3 billion in its fixed-income funds.

Sales in the U.S. of junk bonds, rated below Baa3 by Moody's Investors Service and lower than BBB- by Standard & Poor's, rose to $13.3 billion, compared with the $5.41 billion weekly average in 2010, Bloomberg data show. Returns this month of 1.3 percent compare with 0.28 percent on investment-grade company bonds, according to Bank of America Merrill Lynch index data.

"There's a lot of funds going into high-yield and the people who are managing high-yield, they're sort of forced to put their money in something, and the broker-dealers are not their friends," said Adam Cohen, founder of New York-based Covenant Review, which analyzes investor safeguards included in corporate bond offerings.

Ally, a unit of the lender previously known as GMAC Inc., more than doubled the size of its offering of asset-backed securities from $500 million, according to a person familiar with the sale.

The largest top-rated portion, a $750 million slice maturing in 2.99 years, yields 87 basis points more than the benchmark swap rate, said the person, who declined to be identified because terms aren't public.

The bonds are backed by so-called floor-plan loans that car dealers use to buy inventory.

The difference between the yield premium on speculative- grade corporate bonds and investment-grade debt has tightened to 355 basis points and reached as low as 348 basis points on Jan. 5, the narrowest since November 2007, according to Bank of America Merrill Lynch index data.

Companies sold a record $286.7 billion of high-yield bonds last year, when issuance averaged $5.5 billion a week, Bloomberg data show. Investment-grade corporate bond offerings this week totaled $26.3 billion, 61 percent higher than the 2010 average of $16.3 billion.

Polymer Group Inc.'s $560 million of eight-year debt sold this week included a condition that allows the company to call 10 percent of the bonds at 103 cents on the dollar in each of the first four years, according to a person familiar with the transaction.

The offering shows Polymer Group is trying to lock in low interest rates while getting the flexibility to repay debt any time, as it would with a loan, RS Investments' Gross said.

"That is a very onerous feature," Gross said. "It is not a good sign that investors are not fighting back."

Junk is rising and retail investors are chasing it, in spite of "onerous features". This is supposed to work out well?

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To scroll Thru My Recent Post List

Damn Cool Pics

Small Pleasures
Celebrity Nose Job Before and After
Pizza Planet Truck In Pixar Films
The Most Unusual Scarves
Hookers in Tijuana
Neon Green River
The Evolution of the Batmobile (Infographic)

Small Pleasures

Posted: 14 Jan 2011 02:24 PM PST

Once upon a time in a country far far away a boy lived, very different from all the others. His name was Eftichis. Everything ran smoothly in his life until one day, many many years ago an incident made him see life from a different perspective. And suddenly, a big secret was revealed.

Celebrity Nose Job Before and After

Posted: 14 Jan 2011 01:51 PM PST

All these celebrities changed their nose. You can compare their photos before and after they underwent rhinoplasty.

La Toya Jackson

Blake Lively

Zac Efron

Winona Ryder

Victoria Beckham

Tyra Banks

Scarlett Johansson

Sarah Jessica Parker

Salma Hayek

Paris Hilton

Tom Cruise

Megan Fox

Keira Knightley

Kate Beckinsale

Kate Winslet

Julia Roberts

Jennifer Lopez

Jessica Biel

Jessica Alba

Jennifer Aniston

Janet Jackson

Halle Berry

Gwyneth Paltrow

Gwen Stefani

Demi Moore

Christina Aguilera

Katie Holmes

Jennifer Connelly

Catherine Zeta-Jones

Cameron Diaz

Britney Spears

Beyonce

Ashton Kutcher

Ashlee Simpson

Alicia Keys

Pizza Planet Truck In Pixar Films

Posted: 14 Jan 2011 10:33 AM PST

Have you ever noticed that the pizza truck: Pizza Planet from the movie "Toy Story" is present in every one of Pixar films. The Incredibles makes an exception though.

While some are easy to see, others are more difficult. Take a look.

When the redneck mother is beating Randall with a shovel, the truck is on the far left side of the screen. This is the same motor home that appears in A Bug's Life.

The Most Unusual Scarves

Posted: 14 Jan 2011 10:05 AM PST

These are awesome, funny and some of the most unusual scarves that can keep your neck warm and cozy.

Hookers in Tijuana

Posted: 14 Jan 2011 09:55 AM PST

Some of these girls in Tijuana sure don't look like hookers, while others do. Their outfits look sexy and daring, but sometimes you may think that some of them are just ordinary girls who want to dress up liberally.

Neon Green River

Posted: 14 Jan 2011 09:28 AM PST

On December 29, 2010 waters of this river in Goldstream Park, Canada, turned neon green. According to the local Environment Ministry, there was a chemical reaction in the water known as "fluorescein". They believed that somebody dumped fluorescein in the Goldstream River to make a holiday season joke, but that substance wasn't toxic and fish along with the habitat weren't affected.

The Evolution of the Batmobile (Infographic)

Posted: 14 Jan 2011 09:20 AM PST

A new comic-book style infographic released by carinsurance.org details
the evolution of the batmobile over its seventy year history.

More Infographics.

Click to Enlarge.