Comments on: Finally, A Meaningful Improvement in the Money Markets http://www.nakedcapitalism.com/2008/10/finally-meaningful-improvement-in-money.html Sun, 22 Nov 2009 02:09:47 -0500 http://wordpress.org/?v=2.8.4 hourly 1 By: piglet http://www.nakedcapitalism.com/2008/10/finally-meaningful-improvement-in-money.html#comment-22316 piglet Sun, 19 Oct 2008 18:41:00 +0000 http://www.nakedcapitalism.com/2008/10/finally-a-meaningful-improvement-in-the-money-markets/#comment-22316 wendy, please don't get worked up about somebody's poor choice of words. It doesn't hurt. Just ignore it. Policing these comments and introducing censorship would do much more damage do the debate. I have seen this on other blogs. Please consider this before you cry for the "moderator". And yes this person had something legitimate to say even if you may not like the way they expressed themselves. wendy, please don’t get worked up about somebody’s poor choice of words. It doesn’t hurt. Just ignore it. Policing these comments and introducing censorship would do much more damage do the debate. I have seen this on other blogs. Please consider this before you cry for the “moderator”. And yes this person had something legitimate to say even if you may not like the way they expressed themselves.

]]> By: piglet http://www.nakedcapitalism.com/2008/10/finally-meaningful-improvement-in-money.html#comment-22314 piglet Sun, 19 Oct 2008 18:29:00 +0000 http://www.nakedcapitalism.com/2008/10/finally-a-meaningful-improvement-in-the-money-markets/#comment-22314 How is a "high" of 4.28% choking the economy? You seriously think the survival of the economy lies in the difference between 4.28% and 3.45% yield on commercial paper? Utterly ridiculous. How is a “high” of 4.28% choking the economy? You seriously think the survival of the economy lies in the difference between 4.28% and 3.45% yield on commercial paper? Utterly ridiculous.

]]> By: Anonymous http://www.nakedcapitalism.com/2008/10/finally-meaningful-improvement-in-money.html#comment-22255 Anonymous Sun, 19 Oct 2008 03:54:00 +0000 http://www.nakedcapitalism.com/2008/10/finally-a-meaningful-improvement-in-the-money-markets/#comment-22255 And in similar vein some yields and spread levels graphed for 1997-2001.<br/><br/>http://www.clevelandfed.org/Research/Trends/2001/0101/intrst.pdf And in similar vein some yields and spread levels graphed for 1997-2001.

http://www.clevelandfed.org/Research/Trends/2001/0101/intrst.pdf

]]> By: Anonymous http://www.nakedcapitalism.com/2008/10/finally-meaningful-improvement-in-money.html#comment-22253 Anonymous Sun, 19 Oct 2008 03:41:00 +0000 http://www.nakedcapitalism.com/2008/10/finally-a-meaningful-improvement-in-the-money-markets/#comment-22253 A historical comparison and some explanation for CP market conditions:<br/><br/>http://www.federalreserve.gov/pubs/feds/2004/200418/200418pap.pdf A historical comparison and some explanation for CP market conditions:

http://www.federalreserve.gov/pubs/feds/2004/200418/200418pap.pdf

]]> By: FairEconomist http://www.nakedcapitalism.com/2008/10/finally-meaningful-improvement-in-money.html#comment-22230 FairEconomist Sat, 18 Oct 2008 18:49:00 +0000 http://www.nakedcapitalism.com/2008/10/finally-a-meaningful-improvement-in-the-money-markets/#comment-22230 <i>there was a concerted effort by Chase NY to lend 1month cash (unsecured) in the market friday. Citi bank joined in after the market started moving.</i><br/><br/>Dimon is being the Fed's go-to guy *AGAIN*?!<br/><br/>How long could Chase keep this up? there was a concerted effort by Chase NY to lend 1month cash (unsecured) in the market friday. Citi bank joined in after the market started moving.

Dimon is being the Fed’s go-to guy *AGAIN*?!

How long could Chase keep this up?

]]> By: Arete http://www.nakedcapitalism.com/2008/10/finally-meaningful-improvement-in-money.html#comment-22208 Arete Sat, 18 Oct 2008 14:11:00 +0000 http://www.nakedcapitalism.com/2008/10/finally-a-meaningful-improvement-in-the-money-markets/#comment-22208 Yves,<br/>there was a concerted effort by Chase NY to lend 1month cash (unsecured) in the market friday. Citi bank joined in after the market started moving.<br/>To give you an idea of the magnitude of this, they started lending at approx. 5% (way above 1month usd libor note), and ended up lending at 3% (could have been lower after I left. The amounts involved were not trivial and it explains alot of the movement in the eurodollar strip, the swap spreads and probably even the long end of the usd irs curve. I would guess Chase got a little persuasion to start lending out the cash, it wasn't coming from trader level in any case!<br/>So what.... well USD libors should collapse monday. So what again... as one person said yesterday, "the panic to get out of panic trades has started".... and there are ALOT of panic trades out there that I think will all have to exit a very small door next week as sentiment comes back from the brink.... Yves,
there was a concerted effort by Chase NY to lend 1month cash (unsecured) in the market friday. Citi bank joined in after the market started moving.
To give you an idea of the magnitude of this, they started lending at approx. 5% (way above 1month usd libor note), and ended up lending at 3% (could have been lower after I left. The amounts involved were not trivial and it explains alot of the movement in the eurodollar strip, the swap spreads and probably even the long end of the usd irs curve. I would guess Chase got a little persuasion to start lending out the cash, it wasn’t coming from trader level in any case!
So what…. well USD libors should collapse monday. So what again… as one person said yesterday, “the panic to get out of panic trades has started”…. and there are ALOT of panic trades out there that I think will all have to exit a very small door next week as sentiment comes back from the brink….

]]> By: Doug http://www.nakedcapitalism.com/2008/10/finally-meaningful-improvement-in-money.html#comment-22164 Doug Sat, 18 Oct 2008 04:22:00 +0000 http://www.nakedcapitalism.com/2008/10/finally-a-meaningful-improvement-in-the-money-markets/#comment-22164 Is there any way to tell if the Fed has deployed capital from the new CP facility it set up? Eventually it would show up on the <a HREF="http://www.econbrowser.com/archives/2008/10/balance_sheet_o.html" REL="nofollow"><br/>Balance Sheet</a> YES? Is there any way to tell if the Fed has deployed capital from the new CP facility it set up? Eventually it would show up on the
Balance Sheet YES?

]]> By: Anonymous http://www.nakedcapitalism.com/2008/10/finally-meaningful-improvement-in-money.html#comment-22162 Anonymous Sat, 18 Oct 2008 04:07:00 +0000 http://www.nakedcapitalism.com/2008/10/finally-a-meaningful-improvement-in-the-money-markets/#comment-22162 Dollar continues to climb! That is the most important indicator going forward. It says that cash is king or deflation is king however one wants to make the statement. While the gov't throws debt at the debt mkts debt service becomes more and more dificult. Got Cash? Dollar continues to climb! That is the most important indicator going forward. It says that cash is king or deflation is king however one wants to make the statement. While the gov’t throws debt at the debt mkts debt service becomes more and more dificult. Got Cash?

]]> By: doc holiday http://www.nakedcapitalism.com/2008/10/finally-meaningful-improvement-in-money.html#comment-22163 doc holiday Sat, 18 Oct 2008 04:07:00 +0000 http://www.nakedcapitalism.com/2008/10/finally-a-meaningful-improvement-in-the-money-markets/#comment-22163 OT; this was nice, from a post in another part of The Universe, by someone named, Dr. Michael Yanakiev<br/><br/>> Richard Dooling wrote in the New York Times: "Somehow the genius quants - the best and brightest geeks Wall Street firms could buy - fed $1 trillion in subprime mortgage debt into their supercomputers, added some derivatives, massaged the arrangements with computer algorithms and - poof! - created $62 trillion in imaginary wealth."<br/><br/>Those algorithms were based on risk assessments that were seriously flawed, based only on the risk to the market at that moment, rather on cold, hard empirical data about a person's ability to pay and what would happen if a lot, rather than a few of them, stopped. As George Dyson (son of the quantum physicist Freeman) wrote in Edge last week: "The problem starts, as the current crisis demonstrates, when unregulated replication is applied to money itself. Highly complex computer-generated financial instruments (known as derivatives) are being produced, not from natural factors of production or other goods, but purely from other financial instruments." What is also becoming clear is that the financial markets are far more automated than ever before. There is a growing sense that much of this was made by machines, with the quants feeding the beast ever more intricate lines of code. Dooling has a growing conviction that we are now at the mercy of a financial system based on "arrangements so complex only machines can make". It seems we are at the mercy of the machine.<br/><br/>Not a Great Depression, a Great Rebalancing<br/><br/>http://discussionleader.hbsp.com/haque/2008/10/the_great_rebalancing.html#comments OT; this was nice, from a post in another part of The Universe, by someone named, Dr. Michael Yanakiev

> Richard Dooling wrote in the New York Times: "Somehow the genius quants – the best and brightest geeks Wall Street firms could buy – fed $1 trillion in subprime mortgage debt into their supercomputers, added some derivatives, massaged the arrangements with computer algorithms and – poof! – created $62 trillion in imaginary wealth."

Those algorithms were based on risk assessments that were seriously flawed, based only on the risk to the market at that moment, rather on cold, hard empirical data about a person's ability to pay and what would happen if a lot, rather than a few of them, stopped. As George Dyson (son of the quantum physicist Freeman) wrote in Edge last week: "The problem starts, as the current crisis demonstrates, when unregulated replication is applied to money itself. Highly complex computer-generated financial instruments (known as derivatives) are being produced, not from natural factors of production or other goods, but purely from other financial instruments." What is also becoming clear is that the financial markets are far more automated than ever before. There is a growing sense that much of this was made by machines, with the quants feeding the beast ever more intricate lines of code. Dooling has a growing conviction that we are now at the mercy of a financial system based on "arrangements so complex only machines can make". It seems we are at the mercy of the machine.

Not a Great Depression, a Great Rebalancing

http://discussionleader.hbsp.com/haque/2008/10/the_great_rebalancing.html#comments

]]> By: Wendy http://www.nakedcapitalism.com/2008/10/finally-meaningful-improvement-in-money.html#comment-22161 Wendy Sat, 18 Oct 2008 03:57:00 +0000 http://www.nakedcapitalism.com/2008/10/finally-a-meaningful-improvement-in-the-money-markets/#comment-22161 Yves,<br/><br/>One reason that I have loved your blog so much is that intelligent people were able to disagree with respect. Those who are experts have been respectful to others who are asking questions and so on. I hope that you will act as a moderator. Offering an opinion, even a very different one is always welcome. Calling others a "moron" and acts such as this are not constructive and they rob your blog of class. <br/><br/>Thank you. Yves,

One reason that I have loved your blog so much is that intelligent people were able to disagree with respect. Those who are experts have been respectful to others who are asking questions and so on. I hope that you will act as a moderator. Offering an opinion, even a very different one is always welcome. Calling others a “moron” and acts such as this are not constructive and they rob your blog of class.

Thank you.

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