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- The Mechanics of a Graceful Exit: Interest on Reserves and Segmentation in the Federal Funds Market
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- The World’s Riskiest Sovereign Debt (Update)
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Blogs The Epicurean Dealmaker
The Downside of Anger
An angry man opens his mouth and shuts his eyes.— Cato the ElderAnger is seldom without argument but seldom with a good one.— Lord HalifaxAnyone can become angry — that ... [Link]
Money Supply
Geithner eyes economic reinforcements
As it turns out, the Federal Reserve System has about 20 times the number of economists as the US Treasury. Tim Geithner, Treasury secretary, noted the diminishing number of US ... [Link]
The Aleph Blog
The Rules, Part III
Okay, here is tonight’s rule: The assumption of normality for asset price changes is wrong in virtually every financial market setting. The proper distributions are fatter tailed and more negatively ... [Link]
Le blog d'éconoclaste
J'hésite
Chers lecteurs, mon temps et mon énergie sont comptés et j'ai envie de parler de trois sujets, mais ne peut dans l'immédiat en traiter qu'un. Quelles sont vos préférences? J'hésite ... [Link]
A Dash of Insight
Requisite Investor Skills: Think Critically and Accept New Evidence
Critical thinking helps in any field. I have the pleasure of participating in a discussion list that explores many issues where critical thinking is a focus. The members have a ... [Link]
contact
jck [at]
aleablog [dot] com
January 8th, 2009 at 7:24 pm
Good to have you back.
After seeing this post on the Fed’s purchase, I checked to see if the bid helped Markit’s ABX indices. Strangely enough, all of Markits’ AAA indices dropped today, by 10%.
Here’s a very quick summary http://special—-k.blogspot.com/2009/01/fed-starts-buying-mbs-paper-markits-abx.html
Strange that you would see such a drop, anyone have any ideas why?
January 9th, 2009 at 12:42 am
Jon Jansen, at Across The Curve, has suggested one possible reason for the drop in ABX (http://acrossthecurve.com/?p=2416) — Citigroup has agreed to allow bankruptcy judges to alter loan balances. Nothing to do with the Fed’s purchase of MBS securities.
January 9th, 2009 at 6:32 am
I agree with John Jansen, Citi has agreed with lawmakers not to oppose a new law that would allow bankruptcy judges to alter the terms of a mortgage. This is not a good thing, it puts more uncertainty as to the value of mortgage paper, at least the ones not guaranteed by uncle sam.
The Fed is purchasing MBS, nothing to do with subprime and the link I put up shows they are buying “long” paper i.e 30 year, the objective being to manipulate conventional mortgage rates downwards.
January 9th, 2009 at 11:33 am
Mortgage bonds hit by cram-down legislation advance