Archive for April, 2014

Treasury Market Update

Monday, April 21st, 2014

The Treasury market is particularly comatose and moribund this morning. Volumes are extremely thin and the folks who are kind enough to share information with me regarding client flows aver that unless I wanted them to fabricate something there are no meaningful client transactions this morning. That did not preclude us ...

Corporate Bonds This Far Today

Monday, April 21st, 2014

Via the good folks at Bloomberg: Capital One Financial Corp B'Mark Baa1/BBB 2 part  5 & 10 yr ipt  5yr +90 area 10 yr +115 area 1 mo par call prior on 5 yr U.S. Bank NA B"Mark AA3/AA-    2 yr frn 1 mo par call prior ipt 3ml +15 area U.S. Bancorp B'Mark A1/A+  1/2 part  ...

Monthly 10 Year Auction: Some Thoughts

Monday, April 21st, 2014

I guess the Treasury is thinking about scrapping the current auction cycle process for 10 year notes in which a new issue is offered in February, May,August and November and then reopened in the two succeeding months. I guess my opening sentence and the verb "scrapping" overstates the process but ...

Blackrock on LDI

Monday, April 21st, 2014

I have written about pension investors placing new money into fixed income investments and some peeling and some peeling off equities which have enjoyed galloping gains. The logic is that if you had an underfunded pension fund and enjoyed last year's equity returns,then selling the stock and booking the gains ...

April 21 2014 Opening

Monday, April 21st, 2014

Prices of Treasury coupon securities have rebounded in quiet overseas trading. The last day of trading in the US was on Thursday and that pre holiday session witnesses a late day swoon which brought 10 year yields above 2.70 with a close around 2.72. The issue had opened Thursday around ...

Distended Belly

Sunday, April 20th, 2014

The market sold off rather dramatically on Thursday and the 10 year note traded back to about 2.73.  I had opened the issue at about 2.64 in the early morning on Thursday. In that sell off traders clubbed the 5 year note as if it was a baby seal. The ...

A Whiff of Inflation Around the Corner?

Sunday, April 20th, 2014

The FT has an interesting post on long term unemployment and wages. The article cites academic studies which posit that the long term unemployed are out of the work force and therefore will exert little downward pressure on wages. The folks who hold this view think that wage inflation is ...

Unintended Consequences of Health Care Law

Saturday, April 19th, 2014

The liberal Bible, the New York Times, counter intuitively reports on an increase in health care spending recently. The gist of the story is that after a period of stabilization health care spending is rising. Some of the increase results from the end of the Great Recession and the sharp ...

Shrinking Profits at large Dealers

Friday, April 18th, 2014

The FT has an article on shrinking trading profits at the large investment banks. It is not difficult to understand the problem. Regulation has limited opportunities for profit. The Federal Reserve has neutered volatility as the market trades in exceedingly narrow ranges for months at a time. Electronic trading has ...

Happy Easter

Thursday, April 17th, 2014

I am taking the rest of this shortened day off and will enjoy some time with my lovely wife and grandchildren. Enjoy the day, and the holiday and the weekend. Peace. John Jansen