I was hoping the Goldman (ball)Sach prediction of $600 gold would happen next we so I could load up... but that's just me and I could be wrong...
Pabst, lets say you think newsflow is going to deteriorate markedly and the likelihood of 50 BP is going to 70% by close of business Friday.
Easiest to do is to buy Dec or Jan Fed Fund Futures. Margins are around $600 per 5mil in notional. A 20bp move would be about $400 in profit per contract. I'd be afraid to extend duration. The spreads can be wicked in this environment.
Thanks Pabst. I'll start watching it the next few months. I see an electronic offering under ZB I didnt know we had on IB.
I don't like the Fed at all, but my beef with the folks around here is that a) they think it's part of some vast conspiracy, and b) they personalize it with insults to Bernanke and Greenspan, which is both silly and rude. As for a central bank being a cornerstone of the Communist Manifesto, Alexander Hamilton is probably doing somersaults in his grave on that one. Communism didn't exist when he was around, but he was one of the U.S.'s most far right founders, and he liked the idea of a central bank. In short, show me.
We've got big news this morning and the reason overnight futures are up. http://www.bloomberg.com/apps/news?pid=20601103&sid=a_rZj7Ta608Q&refer=us These are the important problems discussed above that the Fed is looking at. But the Fed can only go so far with FFR and discount rate. They NEED help too - from the private sector, which brings up the next point. I'm astonished, really astonished, that with all that is at stake here and all the fees involved, a handful of these Wall Street houses and their law firms haven't gotten together to redo the specs on theses securitization contracts. Make no mistake about it - these are contracts, not even difficult ones in the grand scheme of things. Sure there are a gazillion tactical issues that would have to be dealt with, in particular the effect on the existing contracts, but I'm confident a hundred or so of the nations premier lawyers in a Working Group could come up with some real solutions. Please - no lawyer jokes if you have a response. That's not helpful.