Greek problem might have been stabilized but not solved
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Global Macro Trading Journal
- Thread starter Daal
- Start date
Why not? Unless you believe in some sort of total armageddon and/or QE, I think one of the most obvious trades here is to be long 10y+ USTs (or, better yet, a flattener).Quote from Daal:
UST futures to hit limit up before 'default'?
The question is how to position before the close. The most obvious development over the weekend would be a status quo deal (with entitlement reform to be 'seriously' looked at at some point in the future, maybe even a commission, 
).
In this scenario, Treasuries get sold off hard, stocks rally, possibly the dollar gains vs. the yen and franc.
Other scenario is no deal, in which austerity will be forced on the U.S. within days - meaning Treasury prices go to the moon, stocks crater, dollar no idea.
In neither scenario does default occur as the U.S. has more than enough in tax receipts each month to make its payments. Government contractors ... sorry, will an IOU do?
As for downgrades, who cares? Treasuries will remain the benchmark risk-free asset no matter what the agencies do.
NLY opened -6% in a bit of a panic this morning, and I bought a slug on the dip. The only other time I've bought NLY (other than my initial purchase in the late 90s and reinvestment of divvies) was during 2008. The company model is at risk with all this shenanigans about Treasuries, but I believe it will be passing.
).In this scenario, Treasuries get sold off hard, stocks rally, possibly the dollar gains vs. the yen and franc.
Other scenario is no deal, in which austerity will be forced on the U.S. within days - meaning Treasury prices go to the moon, stocks crater, dollar no idea.
In neither scenario does default occur as the U.S. has more than enough in tax receipts each month to make its payments. Government contractors ... sorry, will an IOU do?
As for downgrades, who cares? Treasuries will remain the benchmark risk-free asset no matter what the agencies do.
NLY opened -6% in a bit of a panic this morning, and I bought a slug on the dip. The only other time I've bought NLY (other than my initial purchase in the late 90s and reinvestment of divvies) was during 2008. The company model is at risk with all this shenanigans about Treasuries, but I believe it will be passing.
I can do it, i feel great.
