Archive for March, 2008

Changing Forecasts

Friday, March 7th, 2008

 Economists around the street are acknowledging the depth of the economic stress and some have determined  that we have entered recession already. JPMorgan economist Bruce Kasman has made such a change to his forecast. ( I tried cutting and pasting but that did not work so you are stuck with my ...

Update

Friday, March 7th, 2008

 Corporate bond spreads are wider by 2 ½ to 3 ½ basis points . The IG9 has widened out to all time wide levels. There is very little trading and participants anticipation of a heavy calendar of new issuance has them reluctant to make purchases in from of the supply. ...

Treeasury Trading Post Labor

Friday, March 7th, 2008

 In early trading I am hearing that some traders are ringing the register and booking some profits on both outright bets as well as curve steepeners. The announcement by the Federal Reserve that it would enhance and augment the TAF program significantly reduces the odds of a rate cut prior ...

Labor Data

Friday, March 7th, 2008

 The labor report was an unmitigated disaster for the economy.It is very difficult to find a silver lining in this report. Since the good news is brief I will begin with it.Employment in education and health fields jumped by 30K and in leisure and hospitality by 21K. Government employment increased ...

Rumor Scorecard

Friday, March 7th, 2008

I guess I am batting 500 in the rumor department!

Opening Coments March 7 2008

Friday, March 7th, 2008

 Prices of Treasury coupon securities continue to surge as credit problems mushroom and equity markets retreat around the globe. Today there is another ingredient in the mix and the decline in the dollar seems to have accelerated in the overnight trade. As we speak the Euro is cruising above $1.54, ...

Some Overnight News

Friday, March 7th, 2008

The travail and tribulation deepens for Carlye and its AAA mortgage holdings. From the credit market column of the WSJ, a story about an Alabama county which ventured into the world of derivatives and now faces bankruptcy. There are several lines in the story which while written seriously read as if ...

Deleveraging Explained

Thursday, March 6th, 2008

The Wall Street Journal in an excellent exposition of the current meltdown. This is  off topic but the yield on the 2 year note is down to 1.445 percent in Tokyo trading.

Another Rumor and Some Thoughts on Monetary Policy

Thursday, March 6th, 2008

 Late in the day there is another rumor circulating which carried the message that there was an emergency Fed meeting today and the outcome was that they will announce tomorrow a significant increase the size of the TAF auctions. In addition, the story suggests that they will reduce the haircut on ...

Closing Commentary March 6th 2008

Thursday, March 6th, 2008

 Prices of Treasury coupon securities rallied again today as the War and Peace of bond market stories, the credit crunch and its associated problems drives trading . As we speak the stock jockeys are finally awakening from a deep sleep and realizing that the world has changed. I am not ...