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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: UncleBigs who wrote (51232)	1/24/2006 8:53:53 PM
From: mishedlo	Respond to of 110194

UB - It is simply too late to expect anything but a crash from this. Perhaps the reason he did not mention FED policy is he knows they are to blame. Mish

To: UncleBigs who wrote (51232)	1/24/2006 9:02:26 PM
From: russwinter	Read Replies (1) \| Respond to of 110194

Actually of late the Fed has been steadily removing the punch bowl, although not sure what to make of the repo blast at year end? But that's all gone, bullandbearwise.com few coupon passes, not really helping with the auctions other than the 20 year TIP scam with FCBs. And the FCBs are hit and miss. Yet the market has decided to price risk at nearly non existant (), right in the face of another rate hike, and little CB support. The Fed itself isn't making a big fuss either, just going about their "measured tightening", quite relentlessly now. I guess moral hazard has gone on so long, that Humpties refuse to see the evidence and are crying wolf. Be interesting to see what happens when the huge Treasury and corporate financings go off in February with more lackluster CB support. I think the Humpties are playing a losing game of chicken, and playing for nothing really, witness. They act like rates will remain right here, and head south as soon as Bernanke is in. How do they make money with this set up in longer riskier securities?: () 173 bp spread 1 year Treasury (4.45%)/BAA (6.18%) 13 bp spread between 3 year interest rate swaps (4.76)and 3 month Libor (4.63) 3-6 month Treasury inversion to all notes: bloomberg.com 1 month financial commercial paper (4.45%) and 5 year agency (4.67%); 22 bp spread, or 3 month Libor (4.63), a whopping 4 bp spread. libor-loans.com