27Jan10 Ben is going to cut rates in exchange for his confirmation...

Discussion in 'Chit Chat' started by dhpar, Jan 26, 2010.

  1. dhpar



    this is effectively what it is - i bet they start conveniently with zero rate paid on excess reserves and let the fed fund rate collapse to about 1-2bps...

    also explains why such a big rally in treasuries in the past 10 days - friendos of ben (read GS, MS, JPM, etc) knew this...

    this is really totally insane - abolish the fed!
  2. dhpar


    how the hell can people save in this environment? i am basically passing my money for free to let banks earn nice profit on the steep curve. wtf
  3. Huh? Methinks you're a wee bit confused...

    The Fed has been paying interest on excess reserves for a while now, at the FedFunds Target rate. So how do you figure they're gonna "start conveniently with zero"?

    As to the big rally in treasuries in the past 10 days, have you heard of this small, insignificant European country called Greece? Have you seen the spooz in the last ten days?
  4. dhpar


    well yes and yes. i know that you trade in treasuries as i do so no need to give you a lesson (and vice versa...)

    i am sure you were watching the tape - that was bloody weird in the past week. maybe because of ben doubts or whatever but strange in any case.
    on top of that i trade fed funds frequently and this was even weirder....new highs everywhere - that could not be only because of the delayed employment report effect. 1% ff rate is now break-even for mar11...go figure
  5. Why are you shocked? When people are starting to have doubts about the ability of sovereigns, not banks, to fund themselves, what do you expect?

    In extremis, suppose Greece and/or Japan actually default, God forbid. What would you expect to happen to treasuries and FedFunds?
  6. chit chat
  7. dhpar


    japan's default is not in the cards even closely.

    with respect to greece i do not see why it should have a large impact on treasuries last week - it is smaller than AIG and would be bailed out as well. i am not saying it is irrelevant - just that both greece and japan are not a new info...

    p.s. ivanovich you had to cum onto your keyboard when you moved it :). please continue trading your retail fx and leave this alone (wherever it is moved to now).
  8. Dude, trust me on this, pls, if you can. What was happening in Greece last week was definitely new. Maybe not new info, more like new realization, but it was unlike anything seen before.

    As to the size of Greece, I wouldn't really say it's that small. Total Greek debt outstanding amounts to arnd EUR350bn (of which 35% is held by various private banks for liquidity mgmt). You force creditors to take a 40% haircut on that and see what happens to the banking system. I agree that it probably will be bailed out, but, here's the irony, it's not what the people that stuffed themselves full of yieldy Greek paper think.
  9. You must not be American, because in America no one cares 2 shites abt Europe, asia,Uk and all that, okay maybe China gets some mention but that's about it
  10. Is this something you're proud of (I assume you're American)?
    #10     Jan 26, 2010