One look at the repo market ahead of today's $26 billion auction of 2Y paper explains why with the When Issued trading at 1.235% at 1pm, the auction stopped through by 0.5 bps, printing at 1.230% - the reason was familiar: with the OTR issue trading negative in repo, it suggested there were quite high odds of a squeeze into the auction, and the headline print confirmed as much.
Sometimes you just have to laugh...
Minneapolis Fed's Neel Kashkari said earlier...
"we are keeping our eyes open for asset prices to try to look for signs of bubbles” but admitted that it is "very hard to see asset bubbles in advance."
Indeed it must be... if your salary depends on it.
The S&P 500 has now gone a stunning 50 days without a 1% swing...
The S&P 500 Tech Sector has gone a record 14 days without a single loss...
Moments ago, the stocks of the nationalized GSEs - Fannies and Freddie - tumbled by over 30%, after a federal appeals court upheld a ruling that barred hedge funds from suing to overturn the U.S. government’s 2012 decision to capture billions of dollars in the profits generated by the mortgage guarantors Fannie Mae and Freddie Mac after their bailout.
Submitted by Satyajit Das via MarketWatch.com,
Easy money masks global economy’s precarious health
Too much of economic growth and the accompanying bull market in stocks is the result of financial engineering. Increasingly, companies seek to improve earnings or increase their share price by means that are not necessarily directly linked to their actual business.
Just over 10 years ago, HSBC was the first canary in the world's financial crisis coalmine to signal trouble ahead. Today's 7% bloodbath in the banking behemoth is the biggest drop since the financial crisis after reporting fourth-quarter profit that missed estimates on a surprise drop in revenue, which it warned could fall again this year.