Monday, November 07, 2011

@AllAmerInvest Silvio Berlusconi, CDS, Bonus Bucks, crisis intensifies, Warren Buffett, Carlos, Alzheimer's

World markets: Italy takes center stage

World markets were choppy Monday following speculation that Italian Prime Minister Silvio Berlusconi could be on the verge of resigning.
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Why Italian sovereign CDS has left the banks behind
In a note on Friday, credit strategists at Citi noted the widening gap between the CDS spreads of European financials and their sovereigns, and went so far with it as to use the D-word: decoupling. Decoupler #1 being Italy, driven in no small part by the increasingly desperate need of banks to hedge against the sovereign, i.e. “silo trading”.

The series that Citi use to illustrate the decoupling are the Markit iTraxx SovX Western Europe and the iTraxx Europe Senior Financials. Graphing the two from the start of the SovX’s existence:

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CNBC Bonus Bucks Answers for Monday, November 7, 2011

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Berkshire Hathaway Operating Earnings Rise 37%
Operating earnings at Warren Buffett's Berkshire Hathaway increased by 36.8 percent to $3.81 billion in the third quarter.

A reported "loss" of $1.59 billion for Berkshire's derivatives positions, however, contributed to a 23.8 percent drop to $2.29 billion for the company's net earnings.

Braving the primary markets, EM edition
Emerging market borrowers: take cover and brace yourself. As the eurozone crisis intensifies, don’t bank on a typical risk-off environment but on a Lehman-like disruption in financial intermediation that will impose a liquidity premium on pretty much everything. Rising premia and vanishing liquidity in sovereign and bank funding markets could set off a chain of credit events that will leave few stones unturned.

Defiant Carlos the Jackal on trial in France
A defiant and smiling Carlos the Jackal, one of the most dreaded terror masterminds of the Cold War, went on trial again on Monday - this time over four deadly attacks in France nearly three decades ago.

Alzheimer's Disease -- The Front Row

Knowing that the day is coming when your loved one -- won't know you-- is the most horrific feeling of them all for an Alzheimer's caregiver.

Original content Bob DeMarco, All American Investor