Did anyone expect Merkel to commit to an enhancement of the bailout terms for the Greeks after they missed on their debt and deficit targets one year into the austerity process? C’mon!!! Behind the scenes the German mercantilist troika of manufacturing/banking/politics is no doubt celebrating the recent drop in the Euro from 1.4940 to 1.4280. […]

The 4 point rally in TYM in the past 30 days has been a relentless, grinding capitulation for much of the spec trading short base. There were no “gap moves”, as each day’s range was usually less than 14 ticks. The typical up day for TYM was only +8 to +10 ticks and we had […]

Greek turmoil returned to the spotlight after payrolls on Friday driving Bunds, Treasuries and the USD higher. Rumors swirled from "connected finance ministers" - via Der Spiegel - suggesting that Greece was leaving the EU and bringing back the once venerable drachma! This weekend however denials were all the rage from Juncker to Papandreou. It […]

Over the past few months, government bond yields, precious metals and equities approached their cyclical highs while the DXY came within a few percent of its cyclical low. At the same time, most of the high yield, mortgage and investment grade credit markets hit cyclical tights. At Jefferies it has been our long standing contention […]

The movie "A Few Good Men" ends with a classic scene where Colonel Nathan R Jessup finally admits that he ordered a code red. The practice of administering code reds in the military is both ugly and distasteful, but in the opinion of the colonel, it is a necessary evil for keeping the security and […]

From the Bernanke press conference. Reporter Question: "If in one hypothetical case the dollar would sink to a not tolerable level which would harm very much the U.S. economy and the prospect for the global economy because it affects the confidence of so many people, would you consider changing your monetary policy in accordance to […]

I was planning to write something immediately after the press conference yesterday, but midway through I fell asleep. It was about as exciting as an Econ 101class, covering purchasing power parity theories. If the FOMC statement was ham on rye, this was the equivalent of chicken flavored cup o' noodles. Bernanke transparency is so much […]

As the Russell 2000 moves to within 1% of its ALL TIME HIGH, and the 10 year Treasury note falls 40bps from its February 2011 highs, one cannot help be reminded of that glorious 1990s Goldilocks era. Bonds rally, stocks rally and it’s all fun and games on Pleasure Island. But just as Goldilocks was […]

That was some kind of spoo dip this week. We traded down towards 1290 only to come ripping back to almost 1340 - the mid Feb high. The risk asset world simply looks bullet proof. Greek defaults, silly downgrade reports from once venerable ratings agencies and threats of fiscal parsimony can't stop the "risk on" […]

The decision by S&P to put US debt on negative watch should have no implication whatsoever for creditworthiness of US debt. There is a large mistake being made at the ratings agencies when it comes to accessing sovereign debt in a fiat currency regime. They are confusing the "willingness" to pay with the "ability" to […]