MarketWatch.com - Pre-Market Indications
Wednesday, March 19, 2008
Deepening misery on Wall Street, prophesies of recession and the recent freefall of the dollar could set off a $300 billion (£148 billion) time bomb in the global yen carry trade, dealers are giving warning.
The carry trade, which involves cheaply borrowing the Japanese currency to buy other assets, comes unstuck in volatile currency markets. If the carry trade does implode, sending the yen to new heights against a wide basket of currencies, dealers say that the cast of victims could include individuals, corporates and hedge funds.
The yen is at a 12-year high against the greenback and Tokyo-based economists are speculating that a severe crash in the carry trade could trigger a more devastating ruction in the $1 trillion overseas investments of Japanese mutual funds as the dollar/yen exchange rate edges towards the pain threshold of individual investors.
Hedge funds have long used the carry trade for cheap leverage, but there are also thought to be vast exposures to yen volatility in the Thai, Korean and Indonesian banking sectors, where the Japanese currency has been borrowed heavily to meet funding needs. The British banking sector turned to a version of the carry trade - yen-denominated bond issuance - when credit conditions tightened around the Northern Rock crisis. Indian banks' use of the carry trade surged 180per cent between 2005 and 2007. Because the trade has been so popular, Goldman Sachs analysts said yesterday that the sharp fall in the US dollar against the yen had prompted them to reassess the “cash-call risks” for Asian banks and corporates.
|Iran in talks over Dubai bourse listing|
Assent Trading Bribery
The Assent Bribery Scheme
Assent LLC was a brokerage firm that maintained the Jasper Capital account through which Tavdy and Glass executed trades based on the UBS inside information. The charging documents allege that in August 2006, Samuel W. Childs Jr., and Laurence McKeever, two brokers at Assent LLC, agreed to conceal Tavdy and Glass’s trading, based on the UBS inside information from higher-level management at Assent, in exchange for payments from Glass and Tavdy. The charging documents allege that, as part of this deal, Glass agreed to pay approximately $100,000 to Childs and approximately $50,000 to McKeever, and that Glass delivered a total of $30,000 to both Childs and McKeever in $10,000 installments between August and November 2006.
Pre Market - Trader Talk with Bob Pisani
There are reports this morning that Fannie Mae has won the capital relief some have asked for. At 9 am OFHEO (Office of Federal Housing Enterprise Oversight--Fannie's regulator) has scheduled a conference call to discuss alleviating some of the capital constraints on Fannie and Freddie.
This is not going to solve the central problem--credit deterioration, which will continue to pressure earnings and capital, but it will make it easier for Fannie
[FNM 28.22 --- UNCH (0%) ] and Freddie
[FRE 26.02 --- UNCH (0%) ] to expand their purchasing of mortgages. The good news is that the spread between mortgage backed securities and Treasuries is finally starting to narrow.
Fannie Mae stock up 3 percent pre-open and 50 percent since bottoming on March 17.
Visa priced the largest IPO in history, pricing at 406 m shares at $44 ($37-$42 was the expected range) raising nearly $18 billion. Trading under the symbol "V." As for everyone who thought that Mastercard would be sold off to buy Visa...uh, no. Deutsche Bank said it best this morning: "The historic offering vastly improves the visibility, liquidity, and overall importance of the payments space. We think most investors came away from their work on Visa convinced that both names should be core holdings."
Fixed income sales and trading revenues were $2.9 b, the second highest quarter ever, despite writedowns from mortgage prop trading of $1.2 b (!). Up 5 percent pre-open.
Good news: the average 30 year mortgage rate fell to 5.98 percent from 6.36 percent last week. Bad news: mortgage applications have fallen to the lowest level of the year.
Gapping up in reaction to strong earnings/guidance: FMCN +12.0%, LNN +7.5%, ADBE +5.4%, DFS +5.4%, AIR +5.3%, ATU +4.1%, MS +3.8%, CAH +2.5%, ROST +2.5%, GIS +1.7%, DRI +1.5%... Other news: BSC +14.6% (Joseph Lewis and former BSC CEO Jimmy Cayne are quietly searching for a white knight - NY Post), PRXI +11.1% (signs ten year agreement With Luxor Resort & Casino in Las Vegas to develop a new exhibition complex), NCC +4.4% (reports expected Visa IPO gain, expects 1Q08 pre-tax cash gain of approx $450 mln; also upgraded to Sector Perform at RBC), TMA +3.4% (showing continued strength following yesterday's ~20% gains), PERY +2.0% (to be added to S&P SmallCap 600 Index; will take place of BELM), MA +1.9% (ticks up after Visa IPO prices at $44, above the $37-$42 range), OI +1.7% (Cramer makes positive comments on MadMoney), EMKR +1.3% (comments on recent trading activity; to continue substantial revs growth and improve profitability), ACIW +1.1% (signs IT outsourcing agreement with IBM; estimated cost savings of $25-$30 mln)... Analyst upgrades: GTY +5.8% (upgraded to Hold at Stifel), IMCL +2.1% (upgraded to Buy at Citigroup).
Visa (V) IPO prices above range; largest IPO ever; a play on MA which is up 435% since its IPO debut in May 2006 (44.00 )
NYSE Arca Morning Update for Wednesday, Mar 19, 2008 :
10 Most Active stocks on NYSE Arca as of 08:30:00 ET
|Based on Dollar Volume:||Based on Share Volume:|
no nyse stocks gapping up or down over 15 percent today
FMCN +12.3%, PRXI +11.1%, ADBE +6.1%, AIR +5.3%, MS +3.8%, BSC +3.2%, GFI +2.8%, CAH +2.5%, MA +1.9%, GOLD +1.8%, OI +1.7%, AUY +1.3%, GLD +1.2%, ACIW +1.1%...
SINT -18.4%, ERIC -11.2%, DT -10.1%, NOK -7.8%, PEIX -7.3%, MNST -6.7%, JRCC -5.9%, MTG -5.4%, HWAY -4.5%, SI -3.6%, CCL -3.6%, FTE -3.3%, BCS -3.3%, VOD -3.2%, LEH -3.1%, RTP -3.1%, GIS -2.7%, BHP -2.3%, PCLN -2.2%, C -2.0%, BPL -1.1%.