Jan 11. Employment weak. Cons Credit weaker.
“Good News: The unemployment rate hasn’t gone up. Bad News: because so many people have just given up and quit looking” (from Fark.com). NFP fell 85k. Labor force decreased by 610k. Participation rate fell to 64.6, lowest since 1985. Just as stunning was consumer credit, which fell a whopping $17.5 Billion in Nov. (Chgo Trib)- “…decline was the biggest amount in dollars terms since records began in 1943.”
–While the front end rallied on this dismal news, long end struggled to close positive. It’s a battle between tepid economic news and an onslaught of supply. On Saturday Fed’s Rosengren said mortgage rates could increase by 3/4% as fed ends MBS purchases. The curve, of course, steepened Friday, with 2/10 at new record over 285. Red/gold eurodollar pack spd up 8 bps to 270. Ten year note to tip spread now near 250 bps(!), a new high, as Treasury auctions 10 year TIPS today, followed by 3,10, 30 this week.
–The stock market shrugs off concerns about the economy, and about bond supply as a potential alternative for capital. Instead, it appears to favor the Chavez model: if we devalue the currency by half, then everything goes up by twice! (Venezuela devalued).
–NY Times Roger Lowenstein advises: Walk Away from Your Mortgage.
–From Z-hedge re CRE: “Stuyvesant town was acquired in 2006 by Tishman Speyer for $5.4 billion and most recently was valued at $1.9 billion, 65% below the purchase price.” Just defaulted…
–While the front end rallied on this dismal news, long end struggled to close positive. It’s a battle between tepid economic news and an onslaught of supply. On Saturday Fed’s Rosengren said mortgage rates could increase by 3/4% as fed ends MBS purchases. The curve, of course, steepened Friday, with 2/10 at new record over 285. Red/gold eurodollar pack spd up 8 bps to 270. Ten year note to tip spread now near 250 bps(!), a new high, as Treasury auctions 10 year TIPS today, followed by 3,10, 30 this week.
–The stock market shrugs off concerns about the economy, and about bond supply as a potential alternative for capital. Instead, it appears to favor the Chavez model: if we devalue the currency by half, then everything goes up by twice! (Venezuela devalued).
–NY Times Roger Lowenstein advises: Walk Away from Your Mortgage.
–From Z-hedge re CRE: “Stuyvesant town was acquired in 2006 by Tishman Speyer for $5.4 billion and most recently was valued at $1.9 billion, 65% below the purchase price.” Just defaulted…
