This page has been archived and commenting is disabled.
Dispersion Between Pre- and Post-"Default" Cash Management Bills Hits 11 bps
Yesterday we reported of a dramatic dispersion between the just maturing July 28 Bills and the "post default" August 4th version of short-term funding. We also suggested that this is probably a spread that should be promptly collapsed as in the very unlikely event there is a default, the last thing on your counterparty's mind will be trying to collect the several MMs owed to him. Well, the July 28s matured today, and the spread appears to have evaporated. Not so fast. Those who so wish, can still put on the compression trade, although not using plain vanilla bonds, but CMBs instead. In fact, as of today, traders can capitalize on the Treasury's D-Day, with the spread between the August 2 and August 4 CMBs rising from 5 bps to 11 bps in 2 days. Now the reason why this trade, with lots of leverage would be ideal, is that, as mentioned above, if the US does default, Repo desks and Prime Brokers will have much muich bigger problems, and two, as we pointed out, it will imminently become "uncovered" that the Fed has a secret stash of cash, up to the amount of about half a trillion, which may easily carry the Treasury through the new year, in which case the spread will immediately collapse. Of course, we could be wrong, and everyone who plays the compression will blow up in an epic supernova that will make Boaz Weinsten's legendary basis trade annihilation seems like amateur hour.
- 4644 reads
- Printer-friendly version
- Send to friend
- advertisements -



politicians will most likely have already hedged accordingly.
they will reap millions while the sheeple starve.
Why do I get the feeling this is Tyler's bread and butter.
hey buddy,this is one of the best posts that I’ve ever seen; you may include some more ideas in the same kamagra theme. I’m still waiting for some interesting thoughts from your side in your next buy viagra post.
Your blog has some of the most fascinating viagra without prescription information! I've read several pages here and I just had to comment and let you know that I thought you've been doing a great job here. Keep it up!
Any way to play this using ETFs?
if you want to short 7-10s check out TBX
Uhh lol, these are used for like 7-10 days.
uhh..lol..like totally...for sure...
Thx
Aug. 15, 2011 marks the 40th anniversary of Tricky Dick's removal of gold backing the dollar. And thanks for sicking China on us, too, while you were at it. Hell of a guy.
may he rest in piss
ok may he rest in peas...i guess you enjoy your government stealing your childrens money...gratz
That just goes to show ya how far back they've been planning this fiasco.
yeah the fed will have to pump hard to send yields down on a default/not default, yeilds are still going up and USD is sell. Stocks who knows, maybe flat trade. but once LIBOR and CDS spreads from EZ start to widen again, which is around about now. For me it's short EZ indexes, short Asia. August Sh$tstorm is about to hit. Debt markets are going to BLOWUP
This whole thing is staged in order to create trading opportunities for the squid.
Reports are coming out on several undrafted rookies being signed by the Seattle Seahawks. As reported earlier, the most significant is Jeron Johnson, whom many had a fourth round draft grade for until a hamstring injury smacked his draft stock. Also signed this was cornerback Jesse Hoffman out of Eastern Washington. If you follow High School sports avidly, you should know Hoffman holds virtually every state rushing record and finished with a combined 50 touchdowns on offense and 5 interceptions on defense during his senior season. He is small for a Carroll cornerback, and may be converted to safety. Jesse Hoffman will wear Custom NFL Jerseys and play for Seattle Seahawks next season. You can log on our Yahbooks Online Minnesota Vikings Jerseys and select our best quality Vikings Jerseys but Steelers Jerseys if you are true fans of Seattle Seahawks.
WTF is that all about? Are those guys going to be pledged as collateral like Cristian Ronaldo? If not, take that bullshit to the ESPN website.
removed content (spam)
i liked that arsenal home shirt | chelsea home shirt | liverpool home shirt | manchester united home shirt
Wholesale Calculator
Wholesale Pin
Wholesale Puzzle
Wholesale Gift Bags
Solar Products
Fishing Supplies
Silicone Products
Medicine Instrument
Wholesale Fan
Wholesale Kitchenware
Wholesale Mat
Cleaner Products
Wholesale Thermometer
Wholesale Vuvuzela
Home Appliances
Wholesale Memory Card
Poncho Raincoat
Reflective Safety Vest
Giveaway Material
Wholesale Sticker
Money Bank
Wholesale Keyboard
Wholesale Speakers
Wholesale Binoculars
Bottle Opener
Baby Products Suppliers
Promotional Items
Mouse Pad
Wholesale Scissors
Wholesale Thermometer
Automotive Products
Wholesale Glove
Wholesale Wallet
Vocal Concert Products
Wholesale Bangle
Lighting Products
Flash Gift
Writing Instrument
Arts Crafts
Wholesale Tag
Wholesale First Aid Kit
Wholesale Cards
Electroluminescent
Entertainment Supplies
Wholesale First Aid Kit
Hey I am so glad I home and gardening found your website, baby products I really found you beauty products by mistake, while cheap books online I was browsing on Digg for car and motorbike something else, buy Classical Music Anyways I am here shop clothes online now and would just computer online store like to say thank computer and video you for a marvelous buy tools post and a all round DIY & Tools thrilling blog buy DVD online (I also love buy electronics online the theme/design), groceries online shopping I donâ t have health & beauty products time to browse it jewelry online all at the moment kindle store but I have book-marked kitchen shop it and also lighting products included your RSS feeds, katy perry firework mp3 download so when I have buy music instruments time I will be back office products online to read a great Shoes & Accessories deal more, Please do keep buy cheap software up the awesome toy stores online work. buy vhs online / buy a watch / Pet supplies