Gotta love ZERO RISK in the SP500 = $$$

who is feeling a long on ES into the meeting tomorrow? Debating on buying an ES call tonight but feel like we might see some form of pullback before the meeting announcement or right around it.

Short a small amount of vol currently as well.
 
romik said:
IMO it's a mistake to think that stock market's upside performance is pinned to the potential hike as if it's some sort of psychological issue. Can US government afford this hike as the national debt has doubled since 2007? Raising by just 0.25% will immediately increase current national debt repayment by $900 billion per year.
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Refinancing / rolling forward maturing debt at a potentially higher rate may be the result. (We dont pay principal on debt to my knowledge) .Also new debt will be auctioned at the new rates as usual.
What if growth and inflation expectations decrease due to the fed rate hike resulting in decresing yields 5 years To 30 years. Debt servicing costs due to refinancing and new issues may go down.
Cant just .0025 * 18 trillion or, maybe i am not understanding what you mean.
Anyway, i will get out of you traders way here, but this is an important issue.
Debt service presently is a small absolute amount and percentage of GDP.
I think its about250 bil. presently and this is probably less than the dollar amount in the 80's and like any good borrower, hope the curremcy is devalued over time.
 
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romik said:
IMO it's a mistake to think that stock market's upside performance is pinned to the potential hike as if it's some sort of psychological issue. Can US government afford this hike as the national debt has doubled since 2007? Raising by just 0.25% will immediately increase current national debt repayment by $900 billion per year.
More...

Interest payments definitely won't increase by 900b per year if rates go up by a quarter pt, only about a third of all outstanding treasuries need to be rolled over each year, the increase in interest payments would probably amount to no more than 40b per year.
 
current thoughts...90% chance of rate hike tonight, 0.25% only. still 10% chance no rate hike, in which case stock indices crash 5 to 10 %. might be worth buying otm puts to hedge tail risk. gc would rise 10% as well.

if as expected, rate hike, stocks fluctuate, but strong buying opp, due to less uncertainty...strong xmas rally to follow in next few days leading to record highs by yr end.
 
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