Nov 11. Treasury buyback whipsaw

Weak price action in interest rate futures culminated with the 30 year bond auction.  Treasuries quickly made new lows and then exploded higher in a short covering frenzy as the Fed unleashed its buyback program.  
–The interest rate struggle pits buyers who are either 1) the govt 2) pensions forced to find yield 3) those piggybacking the govt buyback program, versus those that think inflation is going to flare up either through dollar depreciation or growth puffed up by the Fed. 
–This morning, Huff Post reports Obama admin is ready to concede on Bush tax cut extension for everybody, while the Debt commission outlined all sorts of proposals to cut spending, including raising retirement age to 96 years…no, that’s wrong, to 69 years, a lot less fun than it sounds.  London student protests turned violent over increased fees…wait til US senior citizens mobilize. 
–In the meantime, the Pentagon can’t seem to determine whether a plume (which CAME STRAIGHT OUT OF THE OCEAN) is airline exhaust or a weather balloon. At this point I don’t even feel safe from marauding Canadians.

Posted on November 16, 2010 at 6:37 am by alexmanzara · Permalink
In: Eurodollar Options

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