Nov 25.

Nov 25.  Fed minutes say zero rates might be fueling financial speculation.  Gee, really?  If only there was some sort of simple indicator they could use to test their hypothesis, like gold for example. 

–Interesting observation from minutes: “Participants noted that the dichotomy between significant easing of conditions in capital markets and continuing tight conditions in the banking sector implied that financing conditions differed for large and small firms. Large firms with access to debt and equity markets for financing had relatively little difficulty in obtaining credit and in many cases also had high levels of retained earnings with which to fund their operations and investment. In contrast, smaller firms, which tend to be more dependent on commercial banks for financing, reportedly faced substantial constraints in their access to credit. Limited credit availability, along with weak aggregate demand, was viewed as likely to restrain hiring at small businesses, which are normally a source of employment growth in recoveries.”

–News today includes Durables, expected +0.5%.  Year over year comparisons are going to begin to look very good, as last fall is when the economy nosedived.  For example, durables are down 20% yoy; a plateau is going to look good in comparison.  Personal Income expected +0.2% with Spending +0.5% and Core PCE up +0.2%.  Jobless Claims expected to be under 500k at 495k. Consumer Sentiment expected 67.0. New home sales expected 410k from 402k. 7 year note auction.


 –New York Times columnist Paul Krugman: “This is really quite grim. At this growth rate it’s far from clear that we’re doing anything to reduce the output gap — the gap between what the economy could produce and what it’s actually producing. Correspondingly, there’s no reason now for even a bit of optimism on unemployment.”

Posted on November 25, 2009 at 6:31 am by alexmanzara · Permalink
In: Eurodollar Options

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