Archive for May, 2008

MBS

Thursday, May 29th, 2008

There has been a pick up in mortgage selling by the convexity crowd. (That is a great business as you buy the highs and sell the lows. I never quite understood that.) Anyway, the selling has accelerated as rates rise and some hot money types have joined the assault. The ...

A Random Treasury Musing

Thursday, May 29th, 2008

Prices of benchmark Treasury securities are at approximately the levels which prevailed earlier this morning. There has been some nibbling in the 10 year sector by central banks and one participant (trader) thought that there should be support at 2.75 percent level in 2 year notes. That issue currently trades ...

GDP and Initial Claims

Thursday, May 29th, 2008

HSBC economist Ian Morris with a brief note on the revisions to GDP and the initial claims data this morning: HSBC: US Q1 GDP Prelim - Better Mix * Q1 GDP revised up from 0.6% to 0.9% (in line with consensus), with core PCE deflator revised down from 2.2% to 2.1%. * The growth ...

Kidder Reports

Thursday, May 29th, 2008

In my opening comments I cited the historical data on the yield curve which I obtained from the Kidder Reports. They also provide real time market color and have a data base with some excellent spread history. I failed to provide a link which I do here. http://www.kidderreports.com/CurvesdAll.htm

Elasticity of Demand

Thursday, May 29th, 2008

According to this story, the higher price of gasoline has elicited a response from drivers and miles driven is dropping.

Opening Comments May 29 2008

Thursday, May 29th, 2008

Prices of Treasury coupon securities have posted sharp losses in overseas trading as the recent rout continues full force. The yield on the benchmark 2year note has climbed 11 basis points to 2.73 percent. (That is a bit misleading as the auction yesterday provides a new benchmark issue and the ...

UK House Prices Dive

Thursday, May 29th, 2008

Home prices in the UK are falling rapidly with a widely followed Index posting its largest drop ever in May,falling by 2.5 percent from April. Prices are 4.4 percent lower than they were in May 2007.

May 28 2008 Recap

Wednesday, May 28th, 2008

Prices of Treasury coupon plummeted today as a heavy gloom hung over the fixed income markets. The yield on the benchmark 2 year note has jumped by 12 basis points to 2.62 percent. (The Treasury auctioned $30billion brand new 2 year notes today and the reception by investors was less ...

Perfect Segue

Wednesday, May 28th, 2008

Read my previous posting and then read this story regarding price hikes at Dow Chemical.

Federal Reserve And Inflation

Wednesday, May 28th, 2008

Minneapolis Federal Reserve Bank President Stern records his views on inflation and the importance of the Fed response to the threat. He is a bit uncomfortable with headline inflation ( as well he should be!) and avers that core is well behaved because people are spending so much on food ...