The Credit Crisis Financial Stocks Short Journal

This ZQ bet I will put in a way that either I will make 20-25% or lose about 13%.
I'm figuring in the best scenario the Dec 2011 pays 55bps, at worse it loses 25bps in a Hoenig scenario(1% Fed funds then wait and see). There is the chance of some scenarios in between, but they are mostly profitable so I'm not worried.

There is also the chance the fed starts a real hiking program(something like 200-300bps in 12 months), but I believe its unlikely I wont be able to short near term contracts as a hedge and unwind the back as that becomes clear. I'm going watch everything they do carefully. At even a small hint of some kind of tightening, I'd be short Jun 2011 with more contracts and be on the ask at the Dec 2011 trying to unwind
 
There is something that the people who advocate more US fiscal stimulus seem to be missing. If they expect that more stimulus will improve debt to GDP ratios as compared to a gradual exit, they are essentially claiming stimulus 'pays for itself', which begs the question, why they criticized the supply-siders in the 80's and Bush years so much when they said the tax cuts would pay for itself(and those tax cuts were made when the economy wasn't at full employment)

Krugman did that many times, it seems that he puts anyone who doesnt advocate more stimulus in the 'austerity' camp. Truth is, US or German austerity might not be needed, they can gradually decrease the deficit without implementing quick or strong cuts in spending or tax hikes and thats probably a better solution to either more fiscal stimulus or quick austerity, specially if combined with looser monetary policy
 
Not sure if there is anything particular to Canada going on, but their BAX futures have gone through the roof over the past week. They've moved way more than any other short term curves I follow - way more than even Oz.
 
Quote from ralph00:
Not sure if there is anything particular to Canada going on, but their BAX futures have gone through the roof over the past week. They've moved way more than any other short term curves I follow - way more than even Oz.
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Have you seen the CAD GDP number today?
 
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