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Strategies & Market Trends : Mish's Global Economic Trend Analysis
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To: Crimson Ghost who wrote (22376)1/28/2005 4:39:03 PM
From: mishedlo  Read Replies (1) of 116555
 
Bond market seems to be factoring in a Fed pause after today's data.

This would be positive for gold and stocks as well after their recent declines -- at least for the short term.

Eurodollars are not even close to factoring in a pause.
There are about 1 million short eurodollar contracts by the specs vs the commercials too.

If the FED pauses all of those people that employed the "greenspan hedge" are going to have their collective asses handed to them. Anyone that employed it by shorting 10 yr treasuries has already had their ass handed to them.

It was assinine for Greenspan to say that IMO. He acts as if there is no counterparty and no one loses by hedging. Then we see a bunch of idiots repeating that quote a thousand times over (no doubt short treasuries and losing their asses).
As best as I can tell the only winners were those shorting short term treasuries (13 week), or eurodollars at exactly the right time. Since there are a million ED contracts short, I guess we will see how that one plays out. EDs have been on a big whipsaw and you made money if you shorted the right month at the right time. If greenspan pauses there is going to be one F of a mad dash effort to get out of eurodollars.

Mish
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