Dec 23. “Know before you owe”

–Yields edged higher yesterday with a slightly steeper curve.  Tens rose 4.3 to 223.8, as stocks rose and pressure abated on high yield and oil.  Volume was light.  January treasury option expiration is tomorrow.
–Existing home sales were much weaker than expected, adding another data point to a string of disappointing economic releases, though the NAR website explains that closing dates have been delayed due to another government initiative, “Know before you owe”. The NAR economist also said “Sparse inventory and affordability issues continue to impede a large pool of buyers’ ability to buy, which is holding back sales”.  So, not much to be taken from this report… however, the amount of global government interference just seems to continue to rise.  Whether it’s Dodd-Frank constraints on dealer inventories, Obama care and the associated rises in insurance premiums and deductibles, or even the more mundane things like clogging of traffic due to bicycle lanes, commerce is impeded.  In fact, the latter item likely added 5 minutes to my taxi ride to the pub after work (thankfully I was able to catch up).  In another startling example of gov’t at work, I read this morning that Japan owns over HALF of the country’s ETFs.  In the 1980’s they used to call it Japan, Inc. in admiration of gov’t and business working together to build a powerhouse.  Now it’s simply gov’t ownership in hopes of stimulus.
–Interesting story on Bloomberg this morning.  http://www.bloomberg.com/news/articles/2015-12-22/man-who-called-china-s-boom-and-bust-now-warns-of-crisis-risks
“Historically, every time the U.S. current account improved, concurrent with dollar strength, some country somewhere in the world plunged into some sort of crisis,” Hong said. “The pressure from a Fed tightening and thus a dollar liquidity shortage scenario will more likely show up” in Hong Kong property as well as China’s online lending and high-yield corporate bonds, he said in an interview.
–US econ releases today includes Personal Income and Spending +0.2 and +0.3.  Durables expected -0.6 but 0.0 ex-trans.  New Home Sales 505k.

Posted on December 23, 2015 at 5:23 am by alexmanzara · Permalink
In: Eurodollar Options

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