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One Minute Macro Update
US: Futures firm this AM as the light volume week continues. Europe continues to dominate headlines as yesterday saw some firming of the front end and Fed Rate expectations as the back end sold off – erasing mid day gains. This week and next seem more about quietly positioning for next year rather than actual direction. With the CDS roll behind us, we will get a better idea of short risk activity going into the 1Q11.
Europe: Post roll, sovereign spreads are wider as news that China would stand by the EMU with respect to debt efforts failed to rally the region. Without a concrete plan, and with solvency and not liquidity the key problem in Europe, the Chinese news was inadequate to rally spreads. Spanish bill auctions resulted in yields +6bp wider for 3M and +49bp wider for 6M (b/c: 3M 2.1x v 2.34x prior, 6M 5.2x v 2.65x prior). ECB’s Stark reinforces the no-bailout clause within the EMU stating that the clause is “not disputable”. Moody’s puts Portugal’s A1/P1 ratings on review for downgrade. We still believe that haircuts are necessary for the region to enter a fiscal union and reiterate the themes contained in our “Three Threats, One Risk” piece and presentation.
Asia: Reuters reporting PBOC may drop loan quota system for capital adequacy loan capacity measures. BOF stating it will “steadily” provide liquidity to support demand as Governor Shirakawa warned of risk related to rising bond yields. BOJ credit programs and rates left unchanged.
From Brian Yelvington of Knight Capital
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Yeah, the drift up continues. I suspect all the market makers are enjoying the season, sipping champagne with their mistresses. Oh well. Back to work for me - gotta pay those taxes.
Hopefully they all get STD's that bail out money can't cure and they all die. Merry Cristmas and a Happy New Year bail out girly men.
Well, well, look who has been drinkin'...little Miss Euro...at 19:00 hours [that's military speak for seven]. Looks like she drank a WHOLE BUNCH OF MOJITOS. As usual, that is probably not going to end well, with her hanging over the railing again and hacking 'em all back up again. So one of you boys better get ready to hold her hair back because I was a gentleman for her all last week and, frankly, it would seem to me that little Miss Euro is nothin' but a bar cruising tramp.
You know, all things considered, it seems pretty funny that the fate of Europe hangs on her tiara.
I think someone saw her cruising around with Long Duk Dong in her daddy's convertible early this morning. He was quoted as saying "Me wikey provide liquidity".
;) sweet...and I get that totally, but I also know UNCLE CHINA is probably NOT ATLAS. So while he might be getting a little frisky and interested, flexing and trying to look all cool, what with little Miss Euro all bombed and hiking her skirt up, promising to make the whole world's wildest dreams come true...ummmmm...I don't think that China story means anything at all.
In fact, the more the criminal syndicate known as Wall Street applies the uni salve known as Uncle China to ALL WOUNDS ACROSS THE ENTIRE WORLD...the more I scratch my head and wonder how that is all going to look when China looks around at empty buildings, empty cities, empty mega malls, soaring food costs and so on and so on...and likely civil unrest...how is Uncle China going to look in the mirror and see.....Atlas? I wonder, really?
Buy hey...what do I know? I don't trade currencies or Chinese stocks...so....