Feb 24. April Crude over $101, up $3
–Mediocre five year treasury auction yesterday, 7’s today. Eurodollar curve ended a bit steeper, though 2/10 spread flattened by a few bps. Selling once again in eurodollar options. There appeared to be fairly heavy liquidation of EDU and EDZ 9962c. EDZ 9937^ settled 40 from 42.5 the day prior.
–This morning oil is again screaming higher. Saudi king is trying to buy off his populace with a big social aid package. But protests in Greece, and in N Korea, and a bank run in S Korea are indications of growing international turmoil. In the US, the battle between budget conscious states and public worker unions is also heating up.
–Obama admin is proposing that mortgage servicers pay for reduction of principal on underwater loans, without end investors of those securities bearing any loss. (WSJ) The amount is apparently around $20 bln, and banks would also have to reduce second lien mortgages if terms of the first mortgage are modified. Bank stocks didn’t have a bad day yesterday, but I suspect that might change today.
–News today includes Durables expected +3.0%, Job Claims 405k and New Home Sales expected 310k. Existing Home Sales were supported by all cash transactions and other qualified buyers. Probably a good sign as real estate moves into stronger hands.
