Jan 15. Weak retail, job claims up, Greece CDS soar
Jan 15. The last leg of the auction was easily absorbed and yields continued to edge lower, while stocks maintained a solid bid throughout the day. Retail Sales were unexpectedly weak at -0.3%, and Jobless Claims a bit higher, adding to a string of disappointing data. NY Fed’s Dudley indicated an “extended period” of low rates could be six months to two years. Greece CDS soared. In the year just ended, retail sales drop was a record, as were housing foreclosures.
–Now Obama wants to tax banks, but all of the actual policies have been reversion to the same old kool-aid. Relax accounting rules, relax down payment amounts, cut funding costs for the big players. They can’t seem to get at the heart of the deleveraging problem, which would be to cut principal amounts on mortgage loans, even though the US public owns FNM and FRE.
–Interesting story on Reuters that a drop in ridership has cost the NY transit agency $100 m as employers cut jobs. Negative feedback loop is continuing to take a big bite out of local budgets.
–There was consistent buying of TYG 118c for 4/64, which expire one week from today. Also a good buyer late of EDM 9975c for 0.75 vs 57.5.
–It’s all pretty meaningless in comparison with the heartbreaking disaster in Haiti.
