Archive for April, 2008

Treasury Market

Friday, April 11th, 2008

 The Treasury market has gapped higher at the open and remains there. In speaking with traders and salespeople at both large and small firms they have uniformly reported that the level of activity is surprisngly muted. Once again the 10 year note is stalling around the 3.45 percent level and ...

MBS

Friday, April 11th, 2008

 Mortgages are keeping pace with Treasuries this morning. Higher coupons have been the best performers mimicking the steepening of the Treasury curve. There has been some relative value types buying the high coupons. And on an option adjusted basis the performance of MBS is even more impresive as the equity ...

ABX

Friday, April 11th, 2008

 ABX tranches are opening the day with small mixed changes with 2007 vintage paper registering small declines and 2006 vintage paper posting small gains. While trading in March was characterized by excellent liquidity, that same liquidity seems to have gone on holiday lately. Investors still favor AAA tranches but the ...

Demand for Light Bulbs Falls

Friday, April 11th, 2008

General Electric released results a few minutes ago and they missed estimates and lowered their estimate of earning for the full year 2008. They blamed the poor results on the slowing US economy and "difficult capital markets". Equity futures have quckly flipped from positive to negative and bond prices have shifted ...

Opening Comments for April 11 2008

Friday, April 11th, 2008

 Prices of Treasury coupon securities have barely budged from levels which prevailed in late New York based trading yesterday. There was not any tangible news overnight to move the markets. Equity markets in Asia bounced on some strength in the technology sector and on hope that consumer retrenchment would not ...

Closing Commentary April 10 2008

Thursday, April 10th, 2008

 Prices of Treasury coupon securities sagged today as the ebullient tone which prevailed at the opening of New York trading quickly faded. The market opened with a strong bid as most equity markets had traded on rocky terrain overnight and futures markets anticipated a soggy opening in New York time. ...

Power Player

Thursday, April 10th, 2008

This is an excellent and informative article about Barney Frank and his inclusion at the table of power along with Ben Bernanke and Hank Paulson. They comprise the triumvirate driving for a comprehensive package to fix(bailout) the mortgage mess.

Black Swan Event

Thursday, April 10th, 2008

Paid up subscriber hedgingrisk posted a link to the San Francisco Federal Reserve website which connects to a paper by John Taylor and John Taylor which describes the conflagration in the money markets last August  which in retrospect was the opening salvo in what has been a protracted battle. Enjoy!

MBS

Thursday, April 10th, 2008

 Mortgage spreads are unchanged on the day . Trading has been active but the flow has been two way. The only noteworthy transaction which I have been able to identify was some chunky GNMA buying out of Asia this morning. One salesman with whom I spoke noted that the MBS rolls ...

Corporate Bonds Around Midday

Thursday, April 10th, 2008

 Corporate bond spreads are a little wider in a lacklustre and listless trading session. The IG 10 is 121 ½ /123. The only noteworthy item is a small offering by Monsanto of $550 million of 10 year and 30 year paper. The issuer has not been to the market in ...