GERMANY MERKEL: CANNOT BAN CDS MARKET OUTRIGHT GERMANY MERKEL: MIGHT NEED CDS MKT CURBS TO LIMIT SPECULATION GERMANY MERKEL: NEED TO CHANGE EU TREATIES TO HELP MEMBERS GERMANY MERKEL: MUST MULL HOW EMU, EU CAN LEGALLY HELP MEMBERS GERMANY MERKEL: POINTS TO NO-BAILOUT RULE FOR EMU MEMBERS IN EU TREATY GERMANY MERKEL: CANNOT RULE OUT NOR AFFIRM ANYTHING GERMANY MERKEL: FINANCIAL AID TO GREECE NO TOPIC CURRENTLY GERMANY MERKEL: DON'T SEE IMMEDIATE GREEK DEFAULT RISK GERMANY MERKEL: SPECULATION PARTLY TO BLAME FOR GREECE WOES GERMANY MERKEL: A EUROPEAN MONETARY FUND IS A GOOD IDEA In the meantime, apparently Sov CDS traders are demanding collateral in gold . Aside that this is news to pretty much all CDS traders, let's dissect this argument.
As the Fed is ever-so-gradually shifting toward a tightening posture, many have wondered what will Bernanke's actions mean for the bond curve. With various liquidity facilities set to expire this month, and the recent discount rate hike already having been priced in, there has so far not been a muted response by the bond market, although over the past few days we have seen an odd tendency, albeit minor, for curve tightening
Now that sovereign CDS traders are about to reprise the role of Jason Bourne, and be hunted by international intelligence agencies just because under the not so wise advice of their prime brokers and preferred CDS salespeople, they dared to buy a minimum amount of $5 million in 5 year CDS of [Spain|Portugal|Greece], it is worthwhile to expose this sovereign CDS "thingy" once and for all. The following BofA research report 1 will introduce not only the basics, but get into some of the more arcane concepts for those who feel that the need to roundhouse Spanish intelligence officers is about to reach boiling point (call it 30-bp spread induced synesthesia).
The choice selections from today's Art Cashin comments, via UBS Financial Services: Greek Rescue Rumor And Chippier Consumer Brings Stocks Back From Brink – For much of Friday’s session, fears about the European Union (particularly Greece) sent folks seeking the safety of the dollar.
Submitted by JM Revolutions happen when broken parts of existing structures reassemble themselves in novel ways.
So much for a pick up in Q4 revenues. With 20% of the S&P companies reporting, revenues ex-Fins (a vertical yield curve will do miracles for bank revenues - will this continue for ever? and what happens if and when the curve flattens...) are actually down 0.57% compared to the prior year
Treasury International Capital data provides an interesting glimpse into foreigners' bond purchasing habits: since the beginning of Quantitative Easing (April TIC data) through October 31 (the last publicly available data point for TIC), foreigners have bought a total of $ 236 billion in Treasury securities , which includes Bills, Bonds, Notes, TIPS and Cash Management Bills (from total holdings of $3.262 trillion in April to $3.498 trillion in October). What is known is that in April total marketable debt consisted of $1.988 Trillion in Bills, $3.822 Trillion in Notes and Bonds and $530 Billion in TIPS, for a total of $6.34 trillion
According to CNBC, the Yield Curve has reached its steepest curve ever . CNBC Producer Lee Brodie writes, “the spread between yields on two-year notes and 10-year notes widened on Monday to its steepest level on record. Specifically, the spread between the yields pushed out to 280 basis points on Monday from 274 basis points late last week.” Let’s take a quick look at the current “Yield Curve” courtesy of StockCharts.com’s “Dynamic Yield Curve Tool” and then compare this curve to the market peak in 2007 and the market bottom in 2003 - you might be surprised. Remember, the Federal Reserve can ’set’ short-term rates by altering overnight interest rates, but the economy generally sets the yield at the longer end of the curve, such as the 20 and 30 year yields, which are much less volatile than 3-month or 1-year rates
According to CNBC, the Yield Curve has reached its steepest curve ever . CNBC Producer Lee Brodie writes, “the spread between yields on two-year notes and 10-year notes widened on Monday to its steepest level on record. Specifically, the spread between the yields pushed out to 280 basis points on Monday from 274 basis points late last week.” Let’s take a quick look at the current “Yield Curve” courtesy of StockCharts.com’s “Dynamic Yield Curve Tool” and then compare this curve to the market peak in 2007 and the market bottom in 2003 - you might be surprised. Remember, the Federal Reserve can ’set’ short-term rates by altering overnight interest rates, but the economy generally sets the yield at the longer end of the curve, such as the 20 and 30 year yields, which are much less volatile than 3-month or 1-year rates. Let’s start now with the current graph of the yield curve (December 2009), which compares short-term, intermediate term, and long term treasury yield rates
Recently there has been much speculation that the US government will do anything, anything, to rekindle the housing bubble. Even if that means providing Option ARMs at blue light special prices and hiring Angelo Mozillo as Mortgage Czar (we hope we are kidding about the latter). Yes, those very same Option ARMs which banks' balance sheets are still expecting to be neutron bombed by, courtesy of the long gone days when there was private sector mortgage origination risk
Monday, March 8, 2010
0 Comments