Market Soapbox 07/02/07
MON, DJIA +127 on lower volume with pretty internals. All UP BIG.
Bonds up, 10 yr yield -4 bps 4.99, $ clubbed vs 1.3624E & vs 122.435Y, WTI crude up $71.09, gold up 1.3% $659.2
Understatement of the Decade? In a recent report, the Bank for International Settlements (BIS) noted:
"Behind each set of concerns lurks the common factor of highly accommodating financial conditions. Tail events affecting the global economy might at some point have much higher costs than is commonly supposed."
Bank of America estimates that approximately $500B of $1.5B in adjustable rate mortgages have yet to reset upward in 2007, and will do so by an average of over 200 basis points.
25% of ALL mortgages are ARMS, over 2007-09 20% of ALL mortgages will reset. 2008 holds even more surprises with nearly $700B in ARMS subject to reset for the FIRST TIME, nearly 75% of which are subprimes.
Thank you sir, may I have another?.... Also in 2008, if the first time wasn't good enough, another $1 Trillion will reset for the 2nd time, and another $1 Trillion will reset for the 3rd time. Today $6.25B in Fed reanimation
Friday: "The month & quarter ending window dressing is done, now lets see what falls out the window. We sense NDX 1955 is a very key number." Today, NDX hit 1954.24 on start of month & quarter fund inflows.
Last week: "a change in Fed verbiage could light a roman candle under this dead man walking".
Today, the dollar hit a 26 year low vs Sterling Pound on a lower rate outlook as operation "Yen for Uncle" took the 10 year back below 5%, driving equities up.
Our sense, BOE will raise, ECB will hold. Until SP500 breaks 1550 closing and remains there for 2 days, we reserve judgment on a change in market direction.
Often wrong, but never in doubt, this is the Nattering Naybob and your not!
Bonds up, 10 yr yield -4 bps 4.99, $ clubbed vs 1.3624E & vs 122.435Y, WTI crude up $71.09, gold up 1.3% $659.2
Understatement of the Decade? In a recent report, the Bank for International Settlements (BIS) noted:
"Behind each set of concerns lurks the common factor of highly accommodating financial conditions. Tail events affecting the global economy might at some point have much higher costs than is commonly supposed."
Bank of America estimates that approximately $500B of $1.5B in adjustable rate mortgages have yet to reset upward in 2007, and will do so by an average of over 200 basis points.
25% of ALL mortgages are ARMS, over 2007-09 20% of ALL mortgages will reset. 2008 holds even more surprises with nearly $700B in ARMS subject to reset for the FIRST TIME, nearly 75% of which are subprimes.
Thank you sir, may I have another?.... Also in 2008, if the first time wasn't good enough, another $1 Trillion will reset for the 2nd time, and another $1 Trillion will reset for the 3rd time. Today $6.25B in Fed reanimation
Friday: "The month & quarter ending window dressing is done, now lets see what falls out the window. We sense NDX 1955 is a very key number." Today, NDX hit 1954.24 on start of month & quarter fund inflows.
Last week: "a change in Fed verbiage could light a roman candle under this dead man walking".
Today, the dollar hit a 26 year low vs Sterling Pound on a lower rate outlook as operation "Yen for Uncle" took the 10 year back below 5%, driving equities up.
Our sense, BOE will raise, ECB will hold. Until SP500 breaks 1550 closing and remains there for 2 days, we reserve judgment on a change in market direction.
Often wrong, but never in doubt, this is the Nattering Naybob and your not!
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