June 10,

June 10,  No real news today on economy.  CNN Money says US debt to GDP will surpass 100% (to 102) this year.

–June midcurve options expire today.

–In summer of 2007, two Bear Stearns mortgage funds collapsed.  I believe the first news was in June that there were liquidity problems; didn’t seem hugely significant.  By July 18, “Bear Stearns reportedly sent out a letter informing investors in their mortgage hedge funds that they might suffer total loss.” It was sort of a beginning point for the crisis. Well, there is a story on ZeroHedge today that starts: “Something quite disturbing happened during today’s latest attempt by the Fed to sell $3.8 billion in face amount of Maiden Lane 2 assets: it had a busted dutch auction. In fact, the auction was so massively busted, the New York Fed managed to sell only half of the bonds for sale, or $1.898 billion in 36 Cusips of the total 73 Cusips offered for sale.”  This is the portfolio that AIG was going to buy whole, instead being sold piecemeal.  Once again it might be a signal that market players are going to hoard liquidity.

http://www.zerohedge.com/article/credit-verge-oversaturation-perfect-storm-implosion

–Another story which creates back of the mind uneasiness concerns wild swings in the NatGas July contract yesterday, apparently an algo gone bad.  A big part of our economy depends of smooth liquid markets, that are now mostly computer driven….

Posted on June 10, 2011 at 12:13 pm by alexmanzara · Permalink
In: Eurodollar Options

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