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.
Gary Shilling, 50% chance of 'global double dip' http://www.cnbc.com/id/15840232?video=1533431311&play=1
Evans cautious on more stimulus but says if thing falter, they are ready to act on more asset purchases http://www.cnbc.com/id/15840232?video=1533905832&play=1
Dallas Fed: Inventory lead recovery coming to an end, no substitute for growth driver seen http://dallasfed.org/research/update-us/2010/1004.cfm
Interesting article about jobless recoveries http://www.econbrowser.com/archives/2010/06/jobless_recover.html It appears that jobless recoveries are more of a symptom of mature economies that have slower growth rates(and robust labor force growth) rather than some technicality regarding the last few cycles
Great article on the continuing (and not yet priced in) disaster in CRE. http://www.realestatechannel.com/us...ommercial-mortgage-backed-securities-2778.php Is There a Bottom in Sight for Commercial Real Estate?
Global Manufacturing Shows Weakening From China to Europe http://noir.bloomberg.com/apps/news?pid=20601087&sid=aaqOeS4Rmf24&pos=1 Lets see what the US data today shows, it would have to start to drop and slow significantly to signal some kind of double dip recession