Archive - Apr 15, 2009

• CPI below estimates at -0.1%, down from 0.4%, ex food and energy unchanged at 0.2% from prior month: so much for inflation (Bloomberg)
• Sam Zell says commercial real estate values doe 30% (Bloomberg)
• Goldman Sachs and Merrill: did December ever happen?
  

The DTCC data will have to wait until tomorrow as apparently the good folks who keep track of $24 trillion in CDS notional needed a good Easter rest.

Another administration 180 degree turn: stress test results to be announced shortly (WSJ)
Goldman's next $28 billion public handout (NYT)

Early Zero Hedge readers are aware that I have often discussed the benefits of the basis trade in the context of an improvement in overall market liquidity, especially at the pronounced mid/late-January negative basis initiation. I would caution readers who have established this position to be very careful in the coming days with any established bases, and prudent readers may do well to trim exposure here, and take the 200bps average pick over the past 3 months.

Zero Hedge has voiced its thoughts on the matter repeatedly (to the point where a broken record sounds outright creative) so I will present those of BCA Research instead, as the latter has some notable conclusions on the rationality of equity investments into the REIT sector.

REITs have historically been at the top of the yield-generating heap, but look to be in jeopardy of losing their appeal as reliable cash flow growth vehicles.