The Credit Crisis Financial Stocks Short Journal

The hugh hendry secret trade its probably options on the Australian central bank rates futures, which last time I tried was not avaliable through IB
 
Quote from Daal:

The hugh hendry secret trade its probably options on the Australian central bank rates futures, which last time I tried was not avaliable through IB
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It may also be CDS on Tokyo Electric and Tokyo Steel. These currently cost about $25K-$50K/year to insure $10M.

IB does not offer Aussie Bank Bill futures, but others do. I opened up an account with another broker and expect to purchase my first options this week.
 
Bullard makes some revealing comments
http://blogs.wsj.com/economics/2010...elling-mortgage-securities-gradually-in-2010/

-"He also said the market was putting too high the odds that the Fed’s first rate hike will come in November."
-He did admit that at the last meeting of the Federal Open Market Committee “a lot” of officials thought higher short-term rates should come before asset sales

Also, it looks like Greece will be getting a bailout
http://www.businessinsider.com/ecb-...-meeting-on-the-escalating-debt-crisis-2010-2
 
http://www.cnbc.com/id/15840232?video=1407777272&play=1

Here's a better clip from yesterday. This sharp dude Jim Rickards was on for a few minutes w/Krozner.

Krozner of course, spent the entire program patting the himself and the Fed on the back for saving us. Rickards destroys his arguments in about one sentence, and he's so smooth about it that I'm pretty sure Krozner didn't even realize he was being totally owned. Fed mouthpiece Liesman had to interrupt Rickards at one point just to try and save poor Krozner.

Its always fun to see one of these statist central bankers actually have to go one on one w/somebody in their own intellectual league - they get completely abused every time. Normally, we just see these guys giving speeches or being questioned by even bigger idiots in Congress.
 
Rogoff and Reinhardt found that banking crisis are usually followed by sovereign debt crisis. The world had the worst banking crises since the 30's, so this sovereign debt crisis is only beginning in all likelyhood(specially given that deficits are still running quite high globally).

This Greece situation had already quite a bit of impact on the US stock market, if the government debt crisis is only starting, more uncertainty should come down the pipe and stocks will fall as a response. I'm expecting the S&P500 to trade at a 8 handle as these issues continue to dominate the headlines, not to mention the V shaped recovery that is unlikely to come and banking issues that still exist(Also the end of QE).

Even if the US economy does well, stocks might still fall as a result, back in 98 with the economy booming the LTCM and Russia situation lead to a sharp decline in equities(getting GS to postpone its IPO), markets hate uncertainty and the start of global sovereign debt crisis should provide plenty of it

Anyone heavly long stocks here should consider locking profits, in particular the high beta EM that are up 100% since the lows
 
Time to sell those options :D ...

http://www.marketwatch.com/story/feds-exit-may-leave-rates-low-until-2012-bullard-2010-02-09

Fed's exit may leave rates low until 2012: Bullard

WASHINGTON (MarketWatch) -- The Federal Reserve's exit strategy may leave traditional rate hikes until 2012, said James Bullard, the president of the St. Louis Federal Reserve. The Fed may focus initially at mopping up the money that it has poured into the markets to keep credit flowing, he said "You could take back some of the quantitative easing, not in a really rapid way, but in a slow way as the economy improves -- that might be a helpful way to proceed while you are waiting for the day to raise interest rates," Bullard said in an interview with Fox Business News. On any decision to raise the Fed funds rate, Bullard said: "If you look at...how the FOMC has behaved in the past, it's been two-and-a-half to three years before we've raised rates after the end of a recession. So if you think the recession ended in the summer of 2009, two-and-a-half years later is a long ways -- it's all the way to 2012," Bullard said.
 
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