Oct 1. Structural unemployment/TED presentation

–Curve was steeper Friday, most notably in eurodollars. 2/10 treasury spread edged up 1.5 to just above 140, but red/gold pack spread in dollars jumped 6.25 to 128 as a relief rally in near contracts continued in the wake of the Wheatley (LIBOR) report. (Reds were +3.25 while golds were -3). The market had feared libor settings would be skewed higher due to the report, unfounded as it turned out. Low for the year in red/gold has been just above 106. Wed low was 117 and Friday bounced to 128; year’s hi is 203.
–News today includes ISM, expected 49.7 from 49.6. More important will be Bernanke’s comments on the economy before the Economic Club of Indiana (at 11:30 Chgo time). Presidential election debate Wednesday.
–Bank stress tests in Spain were better than expected (though underlying growth assumptions are likely more positive than will actually be the case), and global PMI readings were slightly better as well, though France plunged to 42.7. As a comparison Greece is 42.2.
–Somewhat interesting note by Bruce Krasting about Social Security, noting that the fund will disburse $65 billion in October, a large and growing number just about equal to the latest QE monthly buying. SS payroll taxes are $49b with other revenue adding $8b…shortfall of $8b and again, growing.

–This is a link to a TED presentation given by Andrew McAfee about ‘droids” taking over human labor. http://www.ted.com/talks/andrew_mcafee_are_droids_taking_our_jobs.html
FASCINATING 14 minutes. In it he talks about how the steam engine supplanted human muscle power, and how, in the current situation, computers have augmented brain power by multiples. A post by Mish Shedlock where I first saw this video (thanks JK) questions how the Fed can hope to stem the structural decline in employment with monetary policy…

Posted on October 5, 2012 at 5:54 am by alexmanzara · Permalink
In: Eurodollar Options

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