Aug 24.

The market was again fairly quiet yesterday, with yields edging higher.  Ten year rose 5 bps to 214.  Five year treasury auction today followed by 7’s tomorrow, and then Jackson Hole Friday.
–There was a reasonable amount of buying of EDZ1 9950/9962c 1×2 for 1.0 (new).
–It feels like there’s a trend toward more official retribution for actions that could be construed as damaging to the financial system.  For example, the removal of S&P CEO after the US downgrade.  Also, the NY Atty Gen’l (Schneiderman) was just ejected from a gov’t group probing foreclosure fraud, apparently because he wanted more time for investigation, and Geithner wants a speedy resolution (to any problem that could ruffle the current financial architecture).  BofA publicly disputed Henry Blodget’s negative claims about the bank’s finances: “Mr. Blodget is making “exaggerated and unwarranted claims,” which is what the SEC stated publicly when he was permanently banned from the securities industry in 2003.”  In other words, the SEC/gov’t should take action against Blodget?  If gov’t machinery can be mobilzed to reverse the decline of financial shares, then risk assets will again be embraced and confidence will return, right?

Posted on August 25, 2011 at 10:56 am by alexmanzara · Permalink
In: Eurodollar Options

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