Daily Commentary

Credit and equity investors are both imbued with the same confidence that consumers showed in the recently released May data.  Spreads are slightly better as a result. 

There is a mish mosh of new issues in the market today with MET, Westfield RE and EIB in the queue.  I'm hearing that the Westfield deal is coming at rich levels versus it's own CDS and may have to cheapen to clear.  

This week's outcome will largely be determined by the impending treasury auctions and potential deal from FRE.  European credit supply and demand have both been as healthy as here in the U.S.

I'm surprised that Henry Paulson admitted that he didn't really understand mortgage backed securities....dismissing them as 'retail.' 

I'm not surprised to hear that trading while intoxicated can lead to problems.  

The Aussies have lifted their crisis era ban on short sales.

You've heard me mention that most traditional credit crisis indicators have eased to pre-crisis levels.  Bloomberg News notes here that there is still some worry present in the LIBOR markets.   

This fine observation of the global impact of recession is courtesy of Jeremy Grantham's excellent recent Outlook:

"the U.S. is in a position where necessary sacrifices will 

simply be less painful.  We in the U.S. will have to buy 

two fewer teddy bears for our already spoiled four-year-olds.  

The third television set will be postponed as will the second 

or third car.  We will have to settle for a slimmed down 

financial industry and fewer deal-oriented lawyers.  Woe is us.  

China, on the other hand, will close teddy bear factories, and 

send its workers back to marginal or sub-marginal jobs in the 

countryside.  That is the real world, and it delivers real 

pain."