Archive for March, 2008

Some Overnight Links

Wednesday, March 12th, 2008

A US Government agency notes that economic growth is likely to contract in the first half of the year. Confession is good for the soul. From the WSJ the rolling crisis rolls on. The New York Times on a derivative trade gone very sour. And Industrial Production in Europe beats expectations.

Closing Comments March 11 2008

Tuesday, March 11th, 2008

 Prices of Treasury coupon securities have posted dramatic losses in another day of volatile trading motivated by some facet of the credit crunch. Today the Federal Reserve announced that it would institute a new liquidity facility for primary dealers with the intent of clearing the logjam in the finacing and ...

Ursus Major

Tuesday, March 11th, 2008

 Bear Stearns stock trading in a range which will have market makers on that stock reaching for Mylanta or some thing stronger. On the Fed news this morning the stock traded as high as $68.24. It currently trades at $59.95, down $2.35 on the day. The stock has hit a ...

Mortgage Update

Tuesday, March 11th, 2008

 FNMA 5 1/2s are about 20 tighter to Treasuries with a little less than ½ of that coming in late trading yesterday. One dealer made the point that the inaugaral auction in the new form of pin the tail on the donkey of the monetary  policy that works is not until ...

Treasury Update

Tuesday, March 11th, 2008

The Federal Reserve announcement has caused an improvement in off the run Treasury debt as the liquidity premium shrinks. The Fed will make available $200 billion of Treasuries to the dealer community. So Treasury issues which traded rich in the repo market will lose that premium as the cost of ...

Fed Earthquake

Tuesday, March 11th, 2008

The Federal Reserve has acted to soothe the troubled markets with another massive injection of liquidity on top of what was announced on Friday. In effect they are selling Treasuries to buy spread product. They will even take private label non agency collateral from the dealers. This should provide a ...

Overnight Flow

Tuesday, March 11th, 2008

 Some overnight flows: Bank sells 10 year. Insurance Company sells 10 year. Bank sells 2year versus 10 year. Hot money buyers 5 year. Central banks selling 5 year and buying 10 years.

Some Opening Comments March 11,2008

Tuesday, March 11th, 2008

 Prices of Treasury coupon securities are sagging in overnight trading as some of the pervasive gloom which has enveopled the markets recently has faded a bit. That would certainly be a function of the oversold state of the equity market and the attendant overbought state of the bond markets. In ...

Treasury Close

Monday, March 10th, 2008

 Prices of Treasury coupon securities surged today as the painful deleveraging process unfolds as slow torture rather than as a swift, climactic event with a quick denoument. Margin calls beget selling which translates into lower prices and more forced selling. Yields on benchmark Treasury debt declined between 3 basis points ...

Corporate Bonds

Monday, March 10th, 2008

The corporate bond market remains in a state of suspended animation with very little trading on the new issue front or in the secondary market. In some generic sense secondary paper is back 5 basis points to 10 basis points but activity level is so minimal that one could easily ...