The Credit Crisis Financial Stocks Short Journal

Lets say the snowstorm had the impact of -50K, this is probably exaggerated. So more than 6 months after the 'end' of the recession the economy still cant create jobs. This is a jobless/inflationless recovery, not the kind of enviroment where ones needs to be worried about rate hikes. I'm far more worried about things like: EFF going to 25bps, libor blowing out to 50bps compared to fed policy. Give it 2-3 of more meetings with the extended statement in and its an almost lock there are no hikes this year
 
Quote from ralph00:

4. Despite protestations to the contrary from some FOMC members, I still feel like the hawks have seized a bit of control over the debate about when to hike
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Which hawks?Just in the last 48 hours, 5 Fed members(some voters, some not) came out with either extended period support, that includeds Richard Fisher and Bullard, guys who supposed to be hawks. Hoenig is alone, the guy must have lost his voice during 2009 meetings to no avail
 
Quote from Daal:

Lets say the snowstorm had the impact of -50K, this is probably exaggerated. So more than 6 months after the 'end' of the recession the economy still cant create jobs. This is a jobless/inflationless recovery, not the kind of enviroment where ones needs to be worried about rate hikes.
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That's Rosie talking there.:)

I've been meaning to mention that I recently caught up w/a college friend after nearly 20 years. He spent several years (mid 80s to mid 90s) at the BLS and I've been asking him if the NFP report is subject to political influence. In his view, there is no question that politics intrudes.

He first noticed political pressure towards the 2nd half of GWB's (#1) term. It continued during the Clinton years. He has no doubt that it still occurs. The pressure is subtle - maybe little more than a meeting w/folks from the WH to discuss how adjustments are made - but it is there.
 
In theory the ceiling in the fed funds is the discount rate at 0.75% but I dont believe the NYFed desk would allow the ff go above 0.25%, which is a possibility if t-bills were to continue to crash. They would be authorized to buy USTs and they could effectively engineer a t-bill shortage by purchasing them through open market operations. So using the Jun July and August as reference the new EFF is likely to be around 20bps, maybe more maybe less. I just wish I had bailed out of my ZQ yesterday, I should have smelled a rat when EFF printed 15bps
 
Quote from ralph00:

I can't envision a scenario where eruodollars don't get hit pretty badly today ...

1. They've had a big run up in 2010, much of it coming in the face of a big move up in stocks - these things can't go up together for very long

2. All this talk about the snowstorms making a bad NFP number likely means that stocks should rally and bonds sell off on a bad number since its already been baked in and "its the snow's fault"

3. Possibly, all this talk about snow making a bad NFP number is just talk. The number comes in just fine and stocks rally and bonds get hammered because the job market is improving "even w/the snow".

4. Despite protestations to the contrary from some FOMC members, I still feel like the hawks have seized a bit of control over the debate about when to hike. Unless there is a serious deterioration in stocks or the economy or both, I think a hike is coming by late summer. At the moment, it appears that there isn't a force in the universe strong enough to make stocks go down in a significant manner. As for the economy, it will trudge along. The headline UE rate no longer bears any resemblance to reality, so I see no reason why the statisticians at BLS can't throw out an 8 handle sometime this summer.
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How do you think a rate hike would impact stocks & eurodollars (magnitude as well as direction)?
 
Quote from Ghost of Cutten:

How do you think a rate hike would impact stocks & eurodollars (magnitude as well as direction)?
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Obviously, if a cycle of rate hikes is upon us, then eurodollars are about to enter a bear market (they will start going way down long before the Fed hikes). As for once the hikes actually start, who knows, I suppose the contracts a year or more out could rally sharply at that point, ... or not.

Stocks are in mid-90s mode. Any news is good news. Right now, positive economic news (which makes a cycle of rate hikes more likely) is causing stocks to be bought. Negative economic news is causing stocks to be sold for about 10 minutes, whereupon they are then bought furiously because it means the Fed stays easy.

The same crew of voices who were bullish at the very top of two epic bubbles, and remained bullish through their collapse, are back again. Who could have thought we could go through the last 10 years, and these clowns would not only survive but continue to have a great deal of credibility w/the press and public.

Saw this article in the NYT over the weekend by Floyd Norris. If there is any justice in the universe, its the kind of article that gets written pretty close to market tops. He's quoting Abby Cohen for chrissakes. How in the fuck does this chick continue to have a job? Its like the last decade never happened.

http://www.nytimes.com/2010/03/06/business/economy/06charts.html

As for the Volcker quote, it means nothing. The guy has no power in Washington. Also, his quote was not a call to remain at 0-.25% FF, it was for no big increases - a huge difference if you're speculating in the eurodollar or ff market.
 
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