ouch ouch ouch
Bond rally nearing an end?
- Thread starter gharghur2
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Massive insurance for CPI. Paper now long close to 185,000 (maybe more, look at OI tomorrow) October 106 puts in the 10yr options. Mostly for 3 ticks. Most accounts about 20,000 of these on average. I don't think bulls are out of the woods yet. They do dominate these ranges mid-day though. Every day this week we manage to open weak on Japan or Europe, then straight higher by the 2pm close.
That sounds exactly like the Gold market acted before it broke.
But 40% of the core inflation index is tied to rents. The "owners equivalent rent" index (derived from how much homeowners say they could charge in rent), rose by just 0.2%. (There was also a 0.9% drop in apparel prices, a 1% drop in new car prices).
"There are powerful forces holding the inflation rate down going forward, most importantly the weakness in the rental housing market," commented Dean Baker, co-director of the Center for Economic and Policy Research in Washington, in a research note today.
"There are powerful forces holding the inflation rate down going forward, most importantly the weakness in the rental housing market," commented Dean Baker, co-director of the Center for Economic and Policy Research in Washington, in a research note today.
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It's good for the economy and the stock market that inflation remains low. But are we really getting a true reading on inflation when home price appreciation isn't added into the mix? I think not.
BW/Aug 16, 2005
"There are powerful forces holding the inflation rate down going forward, most importantly the weakness in the rental housing market," commented Dean Baker, co-director of the Center for Economic and Policy Research in Washington, in a research note today.
"There are powerful forces holding the inflation rate down going forward, most importantly the weakness in the rental housing market," commented Dean Baker, co-director of the Center for Economic and Policy Research in Washington, in a research note today.
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It's good for the economy and the stock market that inflation remains low. But are we really getting a true reading on inflation when home price appreciation isn't added into the mix? I think not.
BW/Aug 16, 2005
And, not done yet
A beginner question: which kind of implicit scenario this 'insurance' refers to?