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B4 The Bell, Moonday, May 17


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Swap spreads continue to widen possibly due to potential balance sheet problems from a flattening curve. Too much money crammed into the short end.

Case in point New York Bancorp (NYB), a savings bank, is for sale. Apparently they lost $131 million on some leveraged trades. So far, no takers. The stock is down from $35 to $22 in two weeks. Lots more of this out there I suspect.

 

http://biz.yahoo.com/rf/040517/financial_n...ity_sale_1.html

 

 

More on swaps here:

 

http://www.sandspring.com/charts2004/cdj051604.html

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Don't forget this is OPEX week. :blink:

 

This market will move right along over the backs of daytraders, bear or bull. :unsure:

 

Be damn careful. Use protection. :o

 

Crashes are rare. The PTB haven't begun to fight back. :ph34r:

 

Too much Schadenfreude will screw the bears. :(

 

Have fun, whatever you do. :lol:

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Am I the only one who thinks this administration is completely insane?

 

Is the rest of the world supposed to believe that we have now found the WMD that justified the war...and that the timing of this discovery just happens to coincide with the death of the new interim leader of Iraq AND and imminent stock market crash?

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The yield curve has flattened from 5 years to 30 years by about 70 basis points since last July. That is putting pressure on the leveraged trades as many sold long the fixed rate and bought the short-end floater. Short rates have jumped much more than long ones

 

from Hussman last night:

 

" corporate balance sheets were improved not by debt reduction, but by swapping to short-term interest rate structures, so there is considerable yield curve risk to balance sheets. This also implies that unlike past experience, it is not at all clear that the next recession will require any sort of inversion in the yield curve ? even a flattening could create sufficient strains on the economy."

 

http://www.hussmanfunds.com/wmc/wmc040517.htm

 

This, not PPI,CPI, FBI, or evil eye, is the issue for the markets.

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Am I the only one who thinks this administration is completely insane?

 

Is the rest of the world supposed to believe that we have now found the WMD that justified the war...and that the timing of this discovery just happens to coincide with the death of the new interim leader of Iraq AND and imminent stock market crash?

No you are not the only one

The situation continues to sink to new lows

The Soviet Union of old looks like democracy at its finest when compared to the brainwashing campaign that the media continues to support

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If they are going to be this blantant about stick saving the war, why should we assume they would be any more subtle about stick saving the markets?

 

They may just come right out and make the announcement:

 

"We are intervening in all markets.

Mortgage rates will remain low.

Interest rates will remain low.

Gold will never be allowed to rise.

The stock market will never be allowed to fall.

Don't worry...be happy!"

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Gold market slightly in "backwardation" this a.m. In other words, spot price higher than future price, i.e., the June contract. http://www.kitco.com The June contract now trading at 381.40.

 

It's normally in "contango."

 

A Dr. Antal Fekete, among others, view the emergence of such a market as highly significant, implying some skepticism about ability of futures contract sellers to deliver.

 

I mention this here because of my suspicion that it affects a lot more than just gold trades.

 

Intuitively, it just seems to fit in with all the other developments posted on this thread this morning.

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