Sept 16. Buy the curve
Sept 16. Large curve steepening. Red/gold pack spread rose by 8.5 bps. 2/10 also up about 7 bps to a new recent high. The curve appears to be bottoming here. Time to buy reds and sell everything behind.
–I had seen Steve Eisman of “Big Short” fame say that banks have basically been restrained from foreclosing for the past year or so, but change is beginning…and here is the first headline I saw this morning:
NEW YORK (Reuters) – A record number of homeowners lost houses to their banks in August as lenders worked through the backlog of distressed mortgages, real estate data company RealtyTrac said on Thursday.
–Today’s news includes PPI expected +0.3 with Core +0.1. Job Claims expected 455k (but might see bounce due to lack of data last time). Philly Fed expected 3.8.
–On the inflation front, commodities are still very strong (though perhaps from low levels), In the last couple of months sugar went from around 14 to 24. Rice is making new recent highs…etc.
–On the banking front, BofA says they need to raise fees to make up for revenue that will be lost by FinReg. The government wants banks to help pay for losses on FNM and FRE because of bad loans. (And to keep the whole merry-go-round spinning)
