It’s going to be a short commentary today as we are putting the finishing touches on the May monthly (out tomorrow) and I am heading out to Asia for a 5 city, 10 day tour of duty. I must say that I am really looking forward to the discussion/debate with Asian reserve asset managers on […]
It’s a Foghat kind of morning. Everything has slowed – vols are off, spreads are tightening, curves are steepening, risk is rallying and the EUR is softening – Thank you, Mrs. Merkel, sorry Mr. Weber. The key for investors now is to figure out where the wall of EUR reserves around the globe will redeploy. […]
While it might seem calm, it is very important to note that as risk assets rally to their highs of the days, EURUSD is trading down to the lows of the day. In fact, the whole dollar index is moving to its highs of the day. While we have seen some periods recently where risk […]
There are a number of commentators (including myself) that have compared the European bailout package to the US TARP announcement in October 2008. Some of these commentators have gone on to note that in the months and quarters following the TARP announcement, risk assets had another sharp leg down before finally starting to recover in […]
The May 6th ECB press conference will likely go down as Trichet’s last stand. There were some amazing quotes from that conference such as Trichet’s categorical denial of the fact that the ECB discussed buying government bonds outright. But most interesting was when Trichet discussed the difference between the “E” and the “M” in EMU […]
The European bailout plan announced 10 days ago had all the makings of a success story. Spreads tightened sharply, risk assets rallied and the global banking system came back from the abyss. The only immediate worries were the Euro currency falling too quickly and a sizeable increase in international selling pressure on euro assets. There […]
While the details are still difficult to find, it looks like the mother of all bailouts this evening in Europe. The reports suggest a 946b EU wide bailout package with the IMF and even the British (forcibly) involved. The Fed have reinstated the USD swap lines until Jan 2011 and the ECB will do two […]
I think this is a great jobs report, but it still won’t make Washington happy. There were 500k new jobs added but 800k people coming into the labor force – hence the U rate up to 9.9%. The bottom line is that we still have a lot of slack in this economy. There are 8m […]
I’m going to start today, like I did yesterday, discussing the long end of the US bond market. Given my never ending obsession with steeper curves and early asset sales, I received a number of hostile phone calls about the recent long end outperformance. First of all let’s look at the facts: If we look […]
Why have 30yr US rates dropped 45bps in the last month? The answer I believe is across the pond and not here in the US. The attached chart shows that 30yr BTP yields were LOWER than 30yr UST yields one month ago. As the unraveling in Europe has picked up steam, the ultra long end […]