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Strategies & Market Trends : John Pitera's Market Laboratory

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To: Jon Koplik who wrote (18424)10/14/2016 5:38:03 PM
From: John Pitera3 Recommendations

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How Wall St. Regulation Pushed Up Libor, and Borrowing Costs

nytimes.com

As can be seen in the increase of Libor, the cost of capital is going up for banks and ordinary Americans alike.

As of Friday, money marke funds must certify that they will no longer invest in "runnable liabilities", which is Fed speak for any security that is less than 100% safe

Money Market funds have been selling off their mortgage-backed securities and investing instead in Treasury securities, which are the gold standard.

3 month LIBOR is just going higher and higher.... de facto interest rate being pushed up....... it has really hurt the securitization market.



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The 30 year bond yield broke above it's 200 DMA today and the 10 year TNX yield which had broken above it's 200 dma a few days ago came back towards it and resumed its rate rise as well today.

we are also seeing a global interest rate spike.

The EUR/USD USD/JPY, and the GBP/ were all weak today especially the EUR.....

JP
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