Archive for September, 2008

From Merrill Lynch

Tuesday, September 30th, 2008

A loyal reader (thanks Matt) sent along an analysis by Merrill Lynch of the better than expected confidence number released earlier today. The author makes some salient points which I highlight below: No interest in homes And, though consumers painted a relatively sunny picture about the outlook, they don’t seem inclined to pull ...

Some Closing Comments September 30 2008

Tuesday, September 30th, 2008

Prices of Treasury coupon securities plunged today as hope that legislators would pass some bailout package later in the week sparked a stock market recovery which has, as I write,  erased over 50 percent of yesterday's plunge. The stock market recovery reduced the safe haven bid for Treasury debt and motivated ...

Agency Market

Tuesday, September 30th, 2008

The agency market has observed a light trading day but there are some interesting points to discuss. One of my regular agency contacts (a trader at a small to medium firm) mentioned that he has seen inquiry and purchases by investors who normally do not play in the agency market. He ...


Tuesday, September 30th, 2008

There is very little trading in secondary corporate bond market. Spreads are at record wides but that has not attracted a bevy of buyers. One salesman with whom I converse noted that he did have some clients poking around with distress level bids on Target 5 year paper.He also observed ...

Money Markets

Tuesday, September 30th, 2008

I just chatted with my money market mole. He is always interesting, and in the current environment, informative.Today is the last day of the quarter and he notes that some of the pressures emanate from the balance sheet constraint. However, he calls the market the most dysfunctional market that he ...

Swap Spreads

Tuesday, September 30th, 2008

Swap spreads are wider by 7 basis in the 2 year sector, 4 ¾ basis points in the 5 year sector and 3 ¾ basis points in the 10 year sector.


Tuesday, September 30th, 2008

Mortgages are about 4 ticks tighter to swaps this morning.In the overnight session one source reports that non-China Asia has been a better seller. In New York time hedge funds and servicers have been buyers. The trade of the day has been to move up in coupon

Some Opening Comments September 30 2008

Tuesday, September 30th, 2008

Prices of Treasury coupon securities are retracing a portion of the out sized gains attained yesterday as some participants expect that some form of rescue package will pass later this week. Equity prices are mixed in Europe and futures market trading indicates the US equity markets will open with a ...

Credit Opening

Tuesday, September 30th, 2008

Overnight Libor is opening sharply higher at 6.88 percent versus 2.57 percent. That reflects the pressures generated by the quarter end balance sheet date. However, the pressure is not confined to the overnight date as Libor rates are higher by 13 basis points to 30 basis points across the money ...

Some Closing Comments September 29 2008

Monday, September 29th, 2008

Prices of Treasury coupon securities surged dramatically today in a truly historic day of trading. It was a day in which the populist impulse triumphed and the latent suspicion of Wall Street grounded in the middle class heartland rose up to defeat a bill crafted and formed by the ruling ...