1) Please translate that into "traderese". 2) Money market funds are going to have trouble paying out any interest to customers if "this" keeps up much longer. We'll see.
not sure what you mean. the front contract sold off all the others rallied, I guess they didnt lost control over the effective they were just too scared to hike
1) Translate that into "English". 2) The November and December contracts got too far ahead of themselves? There can be an expectation that the rate will remain below the target for the rest of this year but the 2009 contracts will stay closer to the actual target rate.....for now. 3) Will the Fed "stick to its guns" or be a slave to the market? We'll see.
Wow...interesting.. I wonder if this is going to be a blowoff top for the long end of the curve...???
0.23% yesterday even after the bank interest hike! this could be due the FDIC interbank guarantee program. a bank can pay .75bps to the fdic and get a loan backed by the government and be able to borrow at close to the ultra short-term t-bill rate(its an overnight loan after all) Its possible that the entire fed funds future curve is underpriced here and fortunes can be made if this liquidity trap is not solved so I will stick with longs here
http://www.econbrowser.com/archives/2008/11/the_new_improve.html What is the trade here? Is this a scheme to capitalize the FDIC? If they lower the FDIC insurance rate below .75, then fed funds are a sell.
if they lower the insurance then deferred fed futures just wont be a home run, if they fail to contain these and coming issues then the EFF should be close to zero for months maybe years. plus the target should continue to come down anyway