Oct 3. Implosion continues

–Slow motion deterioration continues.  Greece misses deficit target, now will cut thousands of public workers. CA pulls out of settlement talks related to mortgage robo-signing, which is sure to lead to a protracted mess lingering over banks and mortgage firms like Pigpen’s dust cloud.  And in this environment, BofA and Citi announce plans to charge fees on debit card use. Utterly tone deaf.  Goldman is way ahead of the curve on this one…you don’t hear Blankfein touting “God’s work” any more.  He’s had the sense to clam up (and hire personal counsel).  The banks are completely misplaying their (already bad) hands.  I guess they think that policy makers are sure to realize that the financial structure is critical, and that they can fire a shot across the bow with highly publicized fee increases. But the politicians see their “solutions” aren’t working anyway, and in the midst of policy disputes at every level, they can all agree on at least one thing: banks provide a perfect target for indignation…now more than ever.  Heck I’m even jumping on the “Occupy Wall Street” bandwagon…but not actually by physically protesting (I don’t care for mace), just by buying BofA puts. 
–With a weak president going into election season, and protests growing in many cities, it might seem as if the US is vulnerable.  News of Putin returning to the Russian presidency could be cited as an example of exploiting that weakness.  However, the US dollar is ironically the beneficiary of US (and global) quicksand.  
–ISM today expected 50.5 from 50.6
–Just take a look at these two charts/links from the St Louis Fed…Velocity of Money and Money Multiplier.  Neither one is having a meaningful upturn.
http://research.stlouisfed.org/fred2/series/M2V
https://research.stlouisfed.org/fred2/series/MULT

Posted on October 3, 2011 at 10:02 am by alexmanzara · Permalink
In: Eurodollar Options

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