Oct 13. More QE on tap?

Oct 13.  FOMC minutes revealed the Fed was ready to provide further accommodation…and bonds sold off in response.  The dollar started off  the day stronger but eased late.  New highs in corn, sugar, and CRB; new high close in soybeans and silver.
–According to an article in the Financial Times, Google has been compiling data for a price index based on internet transactions.  Interesting in that it would be more timely and likely more accurate. From the article: “While the Federal Reserve is unlikely to panic just yet, Mr Varian said that the GPI shows a “very clear deflationary trend” for web-traded goods in the US since Christmas.”
–Ten year note auction today.  While most are convinced of a new round of QE beginning in November, Fed Vice Chair Yellen on Monday noted some risks about unbridled Fed balance sheet expansion.  It seems to me that more Fed members have recently voiced caution.
–While China has apparently taken steps to restrain credit, a friend of mine who has studied in China and maintains contacts there told me there is widespread circumventing of rules.  For example, second homes require a 50% downpayment.  So married couples have been getting “divorced” so they can each get 50% financing on the SAME property.  In other words, 100% financing…the demand is there because “flipping” is the way to wealth.  Worked out nicely in Florida….

Posted on October 12, 2010 at 6:20 pm by alexmanzara · Permalink
In: Eurodollar Options

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