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Guest Post: The Helicopter Departs

Submitted by TimmyM The Fed move to raise the discount rate on Feb.

More EU Schizophrenia: Almunia About To Admit It’s "Plan B" Time

Headlines only so far: 09:11 02/09 EU ALMUNIA: SERIOUS RISK OF GREEK SPILLOVER ELSEWHERE IN EMU 09:10 02/09 EU ALMUNIA: SITUATION IN GREECE MATTER OF COMMON CONCERN 09:13 02/09 EU ALMUNIA: GREECE MAY NEED TO TAKE MORE MEASURES 09:12 02/09 EU ALMUNIA: SOME SIGNS MARKETS BELIEVE GREECE CAN SOLVE PROBS 09:11 02/09 EU ALMUNIA: COMMISSION FULLY SUPPORTS GREECE

More EU Schizophrenia: Almunia About To Admit It’s "Plan B" Time

Headlines only so far: 09:11 02/09 EU ALMUNIA: SERIOUS RISK OF GREEK SPILLOVER ELSEWHERE IN EMU 09:10 02/09 EU ALMUNIA: SITUATION IN GREECE MATTER OF COMMON CONCERN 09:13 02/09 EU ALMUNIA: GREECE MAY NEED TO TAKE MORE MEASURES 09:12 02/09 EU ALMUNIA: SOME SIGNS MARKETS BELIEVE GREECE CAN SOLVE PROBS 09:11 02/09 EU ALMUNIA: COMMISSION FULLY SUPPORTS GREECE

Credit And Sovereign Risk Update Post NFP

HY 600 IG 101 SovX 110 France 63.50 +0.5 Greece 415.00 -7 Ireland 166.5 -6 Belgium 72.50 +0.25 Denmark 40.50 -0.5 Norway 21.50 -1.0 Spain 167.50 -3.5 Sweden 54.50 -1.0 Holland 44.00 +1.25 Portugal 225.00 -5.0 Austria 101.75 -0.75 Finland 36.75 +2.25 Italy 155.50 +3.0 UK 99.50 -1.5 The dead cat bounce in the most shorted names is taking some of the recent peripheral high fliers tighter, at the expense of increased widening at the "risk-free" core. We expect much more of this risk transfer from the zone of perceived risk to the heart of Europe in the weeks/months to come.

Guest Post: AIG’s Banks – Market Makers Or Flippers Of CDOs?

Submitted by David Fiderer, courtesy of Huffington Post Did Societe Generale ever view its $1.2 billion investment in Adirondack 2005-2 as a buy-and-hold proposition? Or was the bank's original intention to offload the risk on to AIG

Lloyd Blankfein Says He Never Got Request To Take Less Than 100 Cents On Dollar For AIG CDO Exposure

So... Timmy... Who's lying here?

AUDNZD: Playing The Range

Submitted by Nic Lenoir of ICAP As volumes are abysmal this week, we continue to think the risk is for lower US Treasury prices as supply chokes the market in low volume/appetite on this holiday week. Equities keep grinding higher and are getting awfully close to resistance levels, with ever lower volumes "supporting" the price action

We’ve Had Quite Enough of Barney Frank, Thank You Very Much

Just occasionally, we feel as if we might be a little too harsh with Barney Frank.

Moody’s Downgrades Greece To A2, Keeps It Two Notches Above S&P And Fitch, Prostitutes Itself Again

The rating agency that has gotten selling out down to an art, just downgraded Greece from A1 to A2, yet kept it two notches higher than where the country is now fairly rated by Fitch and S&P, thereby preventing the country from collapsing into a liquidity crisis. By taking this action, Moody's has once again proven its utter worthlessness, by pretending to be objective while at the same time keeping an artificially inflated rating high enough to prevent the unforeseen spillover effects from Greece's inability to use Treasury's as ECB collateral: the definitive first domino to fall in Europe, about which we wrote 3 days ago . Full Moody's ridicule script: Moody's downgrades Greece to A2 from A1 Moody's Investors Service has today downgraded Greece's government bond ratings to A2 from A1.

US Treasuries Selling Off And More To Come

Submitted by Nic Lenoir at ICAP We have very convincing arguments for further selling off in US Fixed Income. On the daily chart we see that ever since June the market had been stuck in a triangle consolidation