Despite the Fed's best efforts another fund bites the dust today:
The Carlyle Group was forced to admit on Thursday that it had failed to save its troubled $22bn mortgage backed-securities fund less than eight months after floating the heavily leveraged vehicle on Euronext Amsterdam
Carlyle Capital Corporation, 15 per cent owned by employees of the Carlyle Group, said its banks were likely to take possession of its remaining assets and liquidate them after it ran out of cash to meet ever-rising margin calls – demands for more collateral – which exceeded $400m.
The implosion of CCC, which had $31 of debt for every $1 of its own, is a heavy blow to the reputation of Carlyle, one of the world’s biggest private equity groups. Many of the shareholders in CCC are also big investors in Carlyle’s buy-out funds.
CCC said in a statement: â€In total, through March 12, the company has defaulted on approximately $16.6bn of its indebtedness. The remaining indebtedness is expected soon to go into default.â€
That's an impressive (and ridiculous) amount of leverage. And some think that this default is just the tip of the iceberg.
It'll be critical for the bulls to defend the Tuesday's Fed-induced gains today. I see the dollar's getting hit anew and gold is at $996 -- and I'm not at all interested in selling my GLD that I bought almost a year ago.
On Today's Calendar:
- 10:00 -- Business Inventories
More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic
Potential swing trades:
See one of the recent 'Chart Reading' posts for some potential swing candidates. Also be sure to check my typical swing trade entry & exit rules.
Potential day trades:
(From Briefing.com)
Gapping Down
In reaction to weak earnings/guidance: VM -28.8% (also downgraded to Mkt Weight at Thomas Weisel, downgraded to Market Perform at Raymond James and downgraded to Sell at Merrill), SIGM -12.9% (also downgraded to Hold at BWS Financial), NOVN -11.7%, MW -10.4%, NGAS -8.6%, HOTT -6.0%, NL -5.0%, JAS -4.8%, DNDN -3.2%... Select financial names showing weakness: BSC -4.5%, C -2.8%, UBS -2.6%, ING -2.6%, CS -2.3%, BAC -2.2%, MER -1.9%, BCS -1.8% GS -1.8%... Select chinese names trading lower following weakness in overseas trading: CN -5.5%, CEO -5.3%, ACH -4.5%, PTR -4.4%, BIDU -2.9%, LFC -1.9%, SNP -1.2%... Select solar stocks showing weakness: AKNS -10.8% (also signs manufacturing partnership with Kyocera), YGE -4.6%, CSIQ -4.4%, SPWR -4.2%, STP -3.6% (also Nitol Solar and Suntech announce strategic investment), FSLR -2.9%, ESLR -2.8%... Other news: ATAR -34.0% (hired a financial advisor to help evaluate the proposal by Infogrames Entertainment to acquire the co for $1.68 a share), SUF -26.8% (discloses subpoena from the SEC), TMA -15.8% (discloses notice of event of default from Morgan Stanley after failing to meet a margin call of approximately $9 mln), FMT -12.7% (announces regulatory approval to appoint new directors of Fremont Investment & Loan), DRYS -6.3% and DSX -5.2% (still checking), CFC -5.3% (Fitch lowers CFC IDR to 'BBB-' from 'BBB+', on positive watch AND reports February 2008 operational results ), FRE -3.7% (still checking), BG -2.3% (won't proceed with debt offering, postponed due to 'unfavorable' market conditions - Bloomberg), GE -1.5% (may buy $10 billion of Japan property as crunch spurs sales - Bloomberg.com), MT -1.4% (still checking), NOK -1.4% (court papers claim $1 billion Qualcomm payments - Reuters.com)... Analyst downgrades: NOVN -11.7% (downgraded to Sell at Soleil), AIG -3.8% (downgraded to Equal Weight at Morgan Stanley), FTO -2.6% (hearing removed from Conviction Buy List at tier 1 firm), GLUU -1.9% (downgraded to Sell at Deutsche Bank).
Gapping UpIn reaction to strong earnings/guidance: EFUT +19.0%, WX +19.0%, INSW +7.1%, TBSI +6.4%, AIRM +4.8%, AKNS +4.3%, OME +3.6%, MEI +3.2%, INOD +2.9%, AFCE +2.9%, GEOY +2.7%, BMTI +2.2%, TRGL +2.1%, ENG +1.8%, HRLY +1.7%, SURW +1.4%, BNE +1.1%, BVF +1.1%... M&A news: TTWO +2.8% (ERTS's offers to acquire all of Take-Two's outstanding shares for $26 each)... Select gold stocks showing strength on higher spot prices: GFI +1.8%, GOLD +1.7%, GLD +1.2%, AEM +1.1%, ABX +1.1%, NEM +1.0%... Select drybulk shippers trading higher following TBSI earnings: NM + 1.9%, EGLE + 1.3%... Other news: GMO +4.2% (announces that it, through its 80% owned subsidiary Eureka Moly, has placed orders for two 44 cubic-yard P&H 2800XPC Shovels from P&H Mining Equipment), UN +2.3% (still checking), QGEN +2.0% (still checking), CMTL +1.9% (receives $1.3 mln in satellite communications equipment orders for GSM backhaul network in Africa)... Analyst upgrades: GSIC +5.5% (upgraded to Buy at Jefferies), MLNM +2.3% (upgraded to Outperform at Piper), CRL +1.4% (upgraded to Buy at tier 1 firm).
Disclaimer & How I use this list
Unprecedented Fed moves (probably aiding the Carlyle lender-liquidator banks), and market volatility notwithstanding, today's DJI, NYSE, RUT, Q, XBD and IXF closes slightly ABOVE their recent long-term horizontal support breakdowns at 12000, 8800, 675, 43, 170 and 2600, are a possible reversal message hiding in plain sight on my screens.
Jan-Mar double bottoms, or higher Mar. lows(above Feb) underneath each index, combined with tech leaders XCI and NDX 2 month chart base breakout possibilities, and the NAZ McOscillator closing on zero - are very suggestive on my screens a possible upside surprise for the shorts.
My program says to get in front of such a possibility with double strength ETFs (high volume today) UYG, QLD and financial and oil powered SSO, along with IWM calls, and add positions on the condition of continued strength and 2nd consequtive higher closes over the above long-term horizontal supports. But then in this market, plans could change in a flash...