SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Pastimes : Clown-Free Zone... sorry, no clowns allowed
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: stomper who wrote (47373)12/13/2000 9:53:59 PM
From: pater tenebrarum  Read Replies (2) of 436258
 
o.k., point by point: we saw huge buying in t-bills today, on the heels of a big ongoing rally in other govt. paper. that means, money is fleeing into the most riskless investment alternatives, as risk is suddenly perceived to be very high. at the same time, we know that many big players in these markets like to put on huge leveraged bets on yield curve spreads, and today's action means someone has been hurt. concurrently, corporate spreads are widening to fresh highs, both in the highly rated and the junk arenas. this is discounting a sharp increase in default risk. the FOMC's open market desk has lately been supplying liquidity to the system in stunningly large gobs...which led to my speculation that one or more big players may already be encountering liquidity problems (i may be wrong, and it's perhaps just seasonal demand for funds...not likely when you look at how retail sales growth rates are diving).
if indeed a liquidity problem looms, we can expect more panic buying of risk-free and at the same time panic selling of risky asset classes like e.g. stocks and all sorts of non-governemnt debt, which in turn would exacerbate what is already a tenuous and fragile situation for the financial system. that could lead to the famed, mythical MCHVE, a.k.a. LLCF.
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2025 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News