tag:blogger.com,1999:blog-6616959642391988608.post2461162426220744748..comments2024-03-28T00:18:25.641-07:00Comments on Calafia Beach Pundit: Market to Fed: get ready to tightenScott Grannishttp://www.blogger.com/profile/14028519647946868684noreply@blogger.comBlogger10125tag:blogger.com,1999:blog-6616959642391988608.post-32237371103985549972009-06-10T12:31:08.148-07:002009-06-10T12:31:08.148-07:00I meant to say that if you compare 3-mo Libor to 3...I meant to say that if you compare 3-mo Libor to 3-mo. T-bills (the TED spread), you get almost the same result as if you compare 3-mo. Libor to OIS.<br /><br />You can use eurodollar futures out to 10 years to see what 3-mo. Libor is expected to be. In normal conditions, Libor tends to trade about 30 bps or so above the fed funds rate. Thus you can use eurodollar futures to back into the market&Scott Grannishttps://www.blogger.com/profile/14028519647946868684noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-40026272726197682392009-06-10T12:05:23.962-07:002009-06-10T12:05:23.962-07:00I'm not sure I understand your response ("...I'm not sure I understand your response ("OIS and the TED spread are pretty much the same thing"). If you mean that one can take OIS, add the TED spread and get a Eurodollar rate, you're wrong --- you'd need a FRA/OIS spread (adjusted for convexity) not a TED spread. And Eurodollars trade out to 10y, while OIS trades out to 30y. <br /><br />Given the above that, I'm __https://www.blogger.com/profile/18426730906924848636noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-69996433876753663942009-06-08T08:41:13.910-07:002009-06-08T08:41:13.910-07:00You're exactly right. Erratic monetary policy ...You're exactly right. Erratic monetary policy that gets too tight (1996-2000) then too loose (2003-2005) then extremely loose (2008-current) is one of the major factors behind the financial crisis. <br /><br />Bad monetary policy from the Fed and outrageously bad fiscal policy from the Obama administration are going to mean that the U.S. economy grows much slower in the future than it has in Scott Grannishttps://www.blogger.com/profile/14028519647946868684noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-77524401707366632012009-06-08T06:26:52.957-07:002009-06-08T06:26:52.957-07:00It's past time that the Fed reverse course wit...It's past time that the Fed reverse course with it's q-easing withdrawing liquidity from the markets until we see gold in the $550 price range . Stable money = low and stable interest rates.<br /><br />The idea that the Fed is going to get back on the rate hiking see saw scares me. If I remember right that's part of the reason we find ourselves in the economic mess we are in.davehttps://www.blogger.com/profile/01173750820649272172noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-54910102374394837402009-06-05T11:36:44.619-07:002009-06-05T11:36:44.619-07:00Donny: a further thought on the "hints."...Donny: a further thought on the "hints." Slowing money growth is not necessarily a sign that the Fed is tightening. More likely, it is a sign that the public's demand for money is falling, and that velocity is rising. This is what is going to drive the recovery and the rise in inflation. The Fed needs to offset that by shrinking their balance sheet. They haven't done that yet.Scott Grannishttps://www.blogger.com/profile/14028519647946868684noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-84466675141053357502009-06-05T10:59:47.628-07:002009-06-05T10:59:47.628-07:00MW: OIS and the TED spread are pretty much the sam...MW: OIS and the TED spread are pretty much the same thing; both are short-term indicators. Eurodollar futures give you a good look at where long-term expectations are, which can be much more volatile.Scott Grannishttps://www.blogger.com/profile/14028519647946868684noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-42107462901338257832009-06-05T10:58:29.537-07:002009-06-05T10:58:29.537-07:00I've seen what could be hints of the beginning...I've seen what could be hints of the beginnings of the mop-up operation, but so far they are only hints. They've got $1 trillion of heavy lifting (i.e., selling) to do to get rid of the extra assets they have taken onto their balance sheet.<br /><br />What the Fed should do and what they end up doing are two different things. I think they should have started the mop-up operation already. Scott Grannishttps://www.blogger.com/profile/14028519647946868684noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-37874523787652131162009-06-05T10:18:00.383-07:002009-06-05T10:18:00.383-07:00Why not just look directly at OIS?Why not just look directly at OIS?__https://www.blogger.com/profile/18426730906924848636noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-5381883011510009862009-06-05T10:03:12.777-07:002009-06-05T10:03:12.777-07:00Scott: What are your thoughts to Bill Gross's...Scott: What are your thoughts to Bill Gross's comments this morning stating that tightening and removing the money from the market will not happen anytime soon...only when we stop seeing all the job losses. He clearly is not in the camp that the Fed should start tightening sooner rather than later.Jeffhttps://www.blogger.com/profile/00939788327871137653noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-38218239516623003792009-06-05T09:08:42.585-07:002009-06-05T09:08:42.585-07:00Scott-
Dick Bove's note today is entitled &quo...Scott-<br />Dick Bove's note today is entitled "Bernanke Does His Job" and posits that there are hints the Fed is backing away. He cites cessation of growth in Fed balance sheet, higher qaulity assets, slowing MZM growth, plummeting growth in M3.<br /><br />Bove thinks we can't call it a done deal, but that these constitute early signs that Bernanke has a mop up operation in Donny Baseballhttps://www.blogger.com/profile/08040288585224426073noreply@blogger.com