Jan 20. Brown wins MA election
Jan 20. News of the moment is Brown’s win (and Obama/Frank) defeat in MA election, but EU problems with Greece and Chinese moves to curb lending might overshadow domestic issues. While the election might slow down or stop some federal initiatives, it might also tend to slow or stop aid to cash strapped states, requiring heavy tax increases and spending cuts.
–Bernanke says he welcomes GAO audit of Fed actions during AIG. Possible damage to Treasury and gain for Fed?
–Two headlines from FT: IBM earnings surge on cost cutting and Citi reports 7.6bn loss on domestic difficulties. Sort of sums up the current state of affairs: large companies are cutting costs/labor rather than growing, which leads to consumer delinquencies as jobs are lost.
–Curve was slightly steeper yesterday with red/gold pack spread +3.
Buyer of EDH 97c 1.0 (10k) and EDU 97c for 0.5 (15k). Also, the was a buyer of about 15k E2H (grn Mar midcurve) 9737c for 11.0 to 11.5 (new).
–Today’s news includes Housing Starts expected 0.579 M and PPI expected 0.0 with Core +0.1. ABC Consumer Comfort Index fell to -49, a 6 point drop, and near worst reading on record of -54 a year ago.
