Archive for the ‘Eurodollar Options’ Category
Sept 12. Debt fears and online ads
-Monday featured a relief rally in stocks and an unwind of safe haven trades in bonds. However, it was likely more important than just a reaction to the ‘less worse than feared’ events over the weekend. Stocks made new highs, and the curve had a steepening bias on the sell off. The idea of the […]
In: Eurodollar Options
Sept 11. Irma weakens. 9/11 anniversary
–Weekend risks associated with Hurricane Irma and North Korea are unwinding this morning, with stocks bouncing (ESZ +13) bonds and gold slightly lower. On Friday the low in the ten year treasury yield was just over 201; from the post Brexit low of 137 to the high of this year in March of 262, the […]
In: Eurodollar Options
The Anti-Fed
What is the groupthink of which I speak? It’s a groupthink on monetary policy tactics, tools, governance and strategy, all. Its stated mantra of data dependence causes erratic lurches owed to noisy economic measures. Its statutory medium-term policy objectives are at odds with its myopic compulsion to keep asset prices elevated. Its inflation objectives are […]
In: Eurodollar Options
September 7. News for another day
–Many bits of news yesterday: Fed’s Vice-Chair Fischer announced his resignation, and Trump took Cohn out of the running for Fed Chair (for now). Canada raised rates amid a reported slowdown in Toronto real estate (reports that sales have fallen 35%). Brazil cut rates 100 bps. Hurricane Irma is causing vast damage in the Carribean […]
Sept 6, 2017. Low R* means low rates
–“In the environment of the last few years, markets have become very comfortable in interpreting the lack of official guidance on the policy normalization as a green light to increase financial bets on the continuation of a low volatility journey, delaying the important consideration of (and positioning for) the destination.” This quote is from an […]
Unintended Inventory
I took an economics class from Robert Eisner, a nationally distinguished professor who was an expert on Keynes. About the only thing I remember from college (it was a long time ago) is this: Investment doesn’t necessarily equal intended investment. This idea is at the heart of Keynesianism. Previously, if unsold product built up, classical […]
In: Eurodollar Options
Sept 1. Buy ‘Merica
–In the context of Harvey, with 1 million people displaced and 100k homes damaged or destroyed, a swing of 20 or 30k new bartenders and waitstaff in payrolls hardly seems relevant. But, we’re looking for 180k, a rate of 4.3% and 0.3% wage growth. And the algo programs probably don’t know how to account for […]
Aug 30. NYSE Margin Debt as % of GDP
Chart is NYSE margin debt as % of GDP. It’s near a record at 2.85%. Previous spikes in 2000 and 2007 corresponded with stock market sell offs.
August 30. BTFD
-Beware the False Demagogue? Behold the Future Development? I know BTFD means something. I just can’t put my finger on it. Oh well, on to the markets. –In the spirit of Brexit and the surprise of Trump’s election, markets responded to N Korea lobbing a missile over Japan for a few hours, and then initial […]
August 29. The Last Straw
–So THIS missile launch by N Korea is the last straw? It’s all risk-off this morning, though stock indexes have not quite taken out recent lows. Interest rate futures, by contrast, have exceeded recent highs. Part of the move was evident even before the NK provocation, as the Houston storm and flooding also entered into […]
