Yeah. The August FF futures have taken out their highs from Dubai Friday last Thanksgiving. Meanwhile the GE Mar 11 futures and the GE Mar11 99 calls are well below the highs they hit that day. Its actually even worse than that considering that 2 months have passed. All else being equal, these options should rise in value over time. I would say these options are about 30% below where they should be had LIBOR not blown out. Bummer.
Well, lots of Greek paper sitting on banks' balance sheets, but LIBOR/OIS and VIX were both back to pre-crisis levels. Moreover, various questions arising about the new bank regulations. Can't blame people for wanting to buy some protection against a LIBOR blowout. Someone lifted 50 bags of GEH0 99 puts, paid Jun10 FRA/OIS and sold the front contract outright throughout Friday. Similar flows in Euribor...
If the Democrat's loss of the Kennedy senate seat is really a big deal to the point it could swing the vote on health care, Bernanke and possibly a new stimulus package it just goes to show how random and unpredictable the world can be, where the health of a single man can change the course of history
I thought there's some cross-section between the below and some of the ideas posted in the thread, so here goes a couple of relevant paragraphs from Eclectica Capital's December 2009 report:
As far as Bernanke, there was a pretty amazing shift from Friday afternoon (he's a goner) to Saturday afternoon (he's in). Looks like the WH and the Senate leaders "got their minds right" about Bernanke during that time. It was an important election on Tuesday, but I think "changed the course of history" is a bit much. Health care is still a gov't induced mess and the big banks still own the WH and Congressional leadership.
Thanks Ralph, I was going to ask the same question. For what it's worth, here is a link to the November report: http://www.safehaven.com/article-15039.htm I haven't read it word for word as yet, but I do notice there are some sentences about steel in there.
Here's Eclectica's monthly report for 12/2009. It's just the monthly update, not the longer "quarterly thoughts". See attachment.