Feb 26. Foreclosure ban?
–Price action in interest rates remains bullish (lower yields). New lows in near calendar spreads with EDM0/EDU0 at 16 bps and EDM0/M1 at only 119. Ten year yield fell another 5 bps to 3.64%. Eurodollars closed near highs of the day, even as stocks recovered early losses and gold had a big reversal, from a deficit of about $9 to a gain of equal magnitude. Jobless claims of 496k raising concerns of “double dip”. Fed’s Pianalto cited weak employment as a reason to keep ultra low funds rate. Also relating to jobless picture was an article saying some states have warned unemp benefits will run out if Congress doesn’t extend by Feb 28.
–Obama admin is floating idea of a home foreclosure ban that would require govt review to foreclose. This is a link in the “stealth” stimulus plan…subsidize banks with zero funding costs, but then slow down foreclosures. We already know that gov’t agencies FHA, FNM, FRE are struggling with large delinquencies, and that banks as a whole are leery of forcing too much foreclosed property on the market at once.
–News today includes revision of Q4 GDP exp 5.7%. Chicago PMI expected 60 from 61.5. Existing Homes 5.50M.
–Ten year May strangle seller added 10k shorts yesterday at 35. However, there was fresh BUYING in TYM 114/119 strangle; 10k bought from 46 to 48.
