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Thanks for the reply. That makes sense. So, if I go into the paper market and I bought my 10Yr - yielding 4.75% - and shorted my 2Yr - costing me about 2.1%+; then I would obviously have some positive carry. Is the effect of this "carry" impossible to replicate in the futures market? It...

Gents (and Ladies)... I am trying to structure a flattener trade in the Italian 2s/10s BTP futures. The Bloomberg Index would indicate that, in the paper, there's about 265bps between the two positions at the moment; Bloomberg also says that the ratio for the futures is 4 to 1 (short four 2's...

it's a sweet deal for the Abu boys, there's no denying that... you could sell a fair few leaps against that position :D

hmmm, thanks.

How so? It's a killer coupon is it not?

There must be a few banks out there in a really dire position if Citi are this desperate.

interest payments near $1 Billion p.a can that be good?

these boys are in serious crap: "As of Sept. 30, the company's mortgage portfolio, including home loans and home-equity lines, was valued at $29.3 billion, and the company owns mortgage-backed securities valued at $12.4 billion. To date, it has announced $197 million in pretax write-downs...

quality post :D

I think we're flat to lower from here for some time. There's going to be a decoupling on US markets between stocks with genuine global exposure and those without. It's going to be a stock pickers market. The US economy has recession written all over it and Ben is losing the inflation fight...

But it's only a couple of months since the Jap's were saying exactly the opposite that "the carry trade is not only a one way bet" or some-such....

well if you're in Europe you should, like me, definitely BE IN BED!!! That's absolutely true, and BMW have suffered recently because of it. I don't think it will hurt us fatally though and the fact is that Trichet's remit is not growth BUT inflation. He will not ease until commodities fall...

fseitun, agree with much of that and I'm in Europe. The credit crunch has already hit here and will hit markets. The thing is that Trichet won't cut rates to stave it off. He appears to realise, unlike Benjamin, that it won't make a damn bit of difference. And his focus (and mandate) is on...

Just watch the Yen. We fall through 108 convincingly. Then you're looking at much, much further falls. It should ultimately hurt the commodity bubbles too though so that will, eventually, help the US get back on the comeback trail.

If we hold beneath 108, I think we'll see 103.

haha, obviously 4928 wasn't the resistance I thought it might be we're up to 4950 now. Will we see the 1.50 fall tonight..?

Yeah, but people were saying that plenty back at 1.28 against the Euro. The reality is that the US has inflated it's way out problems previously, but they're running out of gas. Looking at the fundamentals I think there's a good probability (75%+) that you'll see 1.70+ against the Euro within a...

surely the risk of rate cut in CAD has hit the Loon.

yep, took a massive hit last Thanksgiving night aswell. Just rode it from 4804 to 4828, my calcs say resistance there. 1.5045 next stop I'd imagine.

"robust" they may be. Doesn't matter, it's still inflation. The Zimbabwean consumer is very robust too, doesn't mean 500% inflation ain't a problem.