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Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: tejek who wrote (435690)	11/19/2008 1:11:11 PM
From: Road Walker	Read Replies (1) \| Respond to of 1587773

Loan Prices Fall as Funds Sell Amid Slowing Economy Nov. 19 (Bloomberg) -- Prices of high-risk, high-yield loans fell after funds were forced to sell debt and expectations rose that more companies would default as rising unemployment drags down the economy. The price of the average actively traded leveraged loan fell 2.6 cents to 71.2 cents on the dollar since Nov. 13, according to Standard %26 Poor's LCD. Prices have slumped 4.4 cents since Nov. 4, reversing a rally of more than 8 cents on the dollar since the all-time low last month. General Motors Corp., Ford Motor Co. and Chrysler LLC will renew pleas today for government aid to prevent their failure in what GM Chief Executive Officer Rick Wagoner said would be a ``catastrophic collapse'' for the economy. Moody's Investors Service on Nov. 12 increased its forecast for global defaults to more than 10 percent in the next 12 months, citing the likelihood of a ``deep and protracted'' recession in the U.S. ``It's not just the Big Three,'' Randy Schwimmer, managing director and head of capital markets for New York-based Churchill Financial Group LLC, said in a telephone interview, referring to GM, Ford and Chrysler. ``The impact it would have on suppliers, manufacturers and the potential rise in unemployment is adding to the negative tone.'' Forced Selling Declining prices are also forcing investors to sell loans because of clauses in their funds' borrowing agreements that require them to raise money when prices drop below a set level. Investors sold a record $3.3 billion of high-yield, high-risk debt last month in the form of portfolio auctions, according to Standard %26 Poor's. ``There is still forced selling as funds hit trigger points,'' Schwimmer said. Ramius Structured Credit Group LLC, a New York-based fund manager, is conducting an auction of $290 million of loans, according to a public announcement in the Wall Street Journal on Nov. 17. Ramius is running the auction on behalf of investors in another company's fund, said James Burke, a managing director at the firm. He declined to name the manager or the reason Ramius was chosen. Bids on the portfolio, which includes loans for First Data Corp., Dresser Inc. and Goodyear Tire %26 Rubber Co., are due Dec. 3, the announcement said. LCDX Slumps Average loan prices have fallen from 94.89 cents on the dollar since the start of the year, according to Standard %26 Poor's LCD. The decline has boosted yields over the London interbank offered rate to 885 basis points from 394 basis points, assuming four years to repayment, according to a Standard %26 Poor's index. A basis point is 0.01 percentage point. Three-month Libor, a lending benchmark, is currently 2.17 percent. The Markit LCDX, a benchmark credit-default swap index used to hedge against losses on leveraged loans, dropped 1.85 percentage point to a record mid-price of 80.4 percent of face value today, according to Goldman Sachs Group Inc. The index falls as credit risk increases. High-yield, or leveraged, loans are graded below Baa3 by Moody's Investors Service and lower than BBB- by S%26P. Loan creditors are repaid before high-yield bonds. To contact the reporter on this story: Pierre Paulden in New York at ppaulden@bloomberg.net Find out more about Bloomberg on iPhone: bbiphone.bloomberg.com Sent from my iPhone - JF

To: tejek who wrote (435690)	11/19/2008 1:18:32 PM
From: Road Walker	Read Replies (2) \| Respond to of 1587773

But with the price for non fixed costs going down doesn't that present an offset? But that can lead to a deflationary spiral, with the solid fixed cost a stick in the spokes. If your cost to maintain plant is $100K and your revenue goes down by 50% your plant cost (%) essentially doubles. Yes you are getting your raw materials cheaper but you are also selling less at a cheaper price. Same with employees, a fixed cost unless you start dumping them... which leads to less overall consumption. This is looking more and more like something more than a recession. Sorry to be negative.

To: tejek who wrote (435690)	11/19/2008 1:44:36 PM
From: bentway	Read Replies (2) \| Respond to of 1587773

ETrade New-Account Openings Hit 5-Year High In October ( That tradin' baby can SELL! ) The lender and online broker, which has been rocked by the turmoil in the housing market, said 63,538 net new retail accounts, a category that includes both banking and brokerage accounts, opened in October. That helped push total retail accounts up 1.4% from September and 4.4% from a year earlier. For all of the third quarter, net new accounts rose 40,888. Customer assets, though, fell 16% from September to $119.38 billion amid the stock-market turmoil, and were down 46% from a year earlier as securities holdings tumbled 52%. Some customers have been leaving ETrade amid its turmoil, which has included worries about the company's mortgage portfolio. The firm has seen some $1 billion in home-related losses both from loans and mortgage-backed securities. Chief Executive Donald Layton said, "Our customers continued to reduce their use of margin in this volatile environment," he said. "However, they were net buyers of close to $1 billion of securities." Average daily revenue trades rose 15% from both September and a year earlier during the month.