US Debt Yield Turns Negative (FT)
"The implied yield for three-month bills briefly traded at negative 0.01 per cent - the first time that has happened since 1940, traders said. At such a level, an investor is essentially paying someone to own the security."
This is so much fun: if the US Government can issue debt at a negative implied yield, imagine the possibilities. Let's Pac-Man China. The Country. If I were Obama, I'd have a second moon chartered with the money, actually made of cheese.
Everyone Is Pulling Out Of Asia (Bloomberg)
To various extents. Och-Ziff has laid off a bunch of its Asian employees, including partner Raaj Shah.
AIG Owes $10B in Trade Settlement (WSJ)
AIG has managed to piss off the powers that be again, showing $10B in trading losses. The specific instrument traded isn't listed, but we were given this clue: "credit protection instruments" which leads me to believe SWAPs were the soup de jour.
Of Immediate concern is that the money issued by the FED in days of recent can't be used to this end, and the FED doesn't have any "immediate plans" to step in and help the ailing Insurance giant. I'm sure I'm not the first to say it, but I'm the one saying it right now: Unfortunately, it's time to wind AIG down.
Goldman Goes Anti-Garden State (Bloomberg)
The Broad boys (and girls) apparently advised clients to "bet against 11 states' debt" a la the credit-default swaps. I like the move, pure brass - takes the emotion out of it. What's sad however, is Bloomberg's apparent lack of understanding when it comes to statistics:
"In the three months since the New York-based securities firm recommended "shorting municipal credit," the value of the Markit MCDX index of the derivatives' price more than tripled, to as high as 278.33 basis points from 87.75. A basis point on a credit-default swap protecting $10 million of debt for five years is equivalent to $1,000 annually."
Unfortunately, correlation doesn't equal causation, and given the chastising tone of the article it's amusing to think the Bloomberg may be blaming the move of the MCDX on Goldman's recommendations.
FED Issues Its Own Debt (Reuters)
I'll be honest here, I didn't even know this was possible; it's a lot like showing up to the circus and seeing a man shove his head up his own ass.
"Fed officials have approached Congress about the move, which could include issuing bills or some other form of debt and would provide the central bank with more flexibility to tackle the financial crisis, the Journal said."
Happy Birthday Mr. Blagojevich! (FT)
So... What's up? How's things? You excited about the big 5-2?
Carlyle And Sequoia In Lovers Spat (WSJ)
Carlyle has filed against Neil Shen, a Managing Partner at Sequoia, claiming he interfered in a transaction with a medical-research company by backdating an investment agreement with the owner of the company.
What gives it that special familial fucking of a feeling is that Shen "was the founder of Nasdaq-listed Ctrip.com International Ltd., a company providing online flight bookings that was one of Carlyle's successful early investments in China."
"In a writ submitted to Hong Kong's High Court on Dec. 2, Carlyle Asia Investment Advisors Ltd. accused Mr. Shen of backdating an US$11 million investment contract between Sequoia Capital China Growth Fund I L.P. for a 25% stake in Green Villa to four days before Carlyle signed an agreement for a US$10 million investment in the Chinese company."