June 6. Bad employment data sparked a rally in bonds and losses for stocks.

June 6. Bad employment data sparked a rally in bonds and losses for stocks.  QE2 was supposed to help the economy by propping up asset prices as yields would fall at the longer end of the curve.  Well, you can’t ask for much more than a ten year note at only 2.99%, yet stocks, which Bernanke has cited as a success of the program, are [perhaps] giving up the ghost. And housing, which had a short lived bounce related to tax credits, barely responds to low rates at this point. The Keynesian prescription of gov’t spending is seemingly being overwhelmed by fear of bad policies, and concern that austerity is not just for peripheral Europe anymore.

–New lows in many of the one-year calendar spreads once again.  Dec/Dec was as high as 93 on May 18, now just 63.5, -3.5 on the day. EDH2 9962 straddle was sold at 23.5 to 23.0….WITH 288 DAYS UNTIL EXPIRATION!  Can it stay bad that long?

–I saw a couple of intersting items as I was scanning internet sites, one on the Huffington Post and one on Drudge Report.  Drudge was about a planned protest at a U2 concert (in the UK) by Art Uncut, because the band (and Bono) doesn’t pay their fair share of taxes.  The other concerns Apple, facing protests for the same reason by a group US Uncut… I suppose part of the same organization.  When people are forced to give up some of what they perceive as their right (in terms of gov’t largesse) they search for whatever target can be found.  To a hammer, everything obstacle looks like a nail.

Posted on June 6, 2011 at 12:16 pm by alexmanzara · Permalink
In: Eurodollar Options

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