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Originally posted by OBE1
Federal Reserve $31.250 Billion lube job today...Gee! How about that?
Our Fed contacts, while indirect, indicate that the suddenness of the impact of the mortgage industry on the economy is not fully appreciated. ...
A well respected asset manager wrote today in a private note to clients:
"Have the Fed's moves been successful? Our review of market liquidity conditions since the inception of the liquidity crisis on August 9 clearly shows that liquidity conditions have not improved in most of the affected short-term markets, despite the Fed's recent actions. In fact, market liquidity problems have since spread to other sectors, such as short-term municipals and auction rate preferreds. The current liquidity crisis could be much worse if it were not for the prevailing market expectation of an impending ease in the Fed Funds rate. What will the Fed do?" - source
Originally posted by Crakeur
reply to post by Rockpuck
market crash 1929 - Black Tuesday
market crash 1987 - Black Monday
the pressure is rising since there is a spike in the funding calendar each month, around the 17th, when a large amount of paper expires. Since commercial paper settles two days after it is issued, this means funding for September 17th (next Monday) will probably be concentrated this Thursday.
Dealogic estimates that in Europe just over $50bn of ABCP matures over the next week, while $109bn-worth of paper matures during September.
Ok ATSer's. time to wake up. There is so much misunderstanding on this thread that i need to step in and correct folks. I do this for a living so I know what i am talking about.
Originally posted by disgustedbyhumanity
reply to post by xenya
The $650 is for each contact. If the trade was for $4.5 billion in underlying stock, then we are talking about 3 million contracts(Index was at 1450 I mistakenly typed SPY instead SPX, but the point is the same. SPY is just the ETF representing the SPX and trades at 1/10th the price of the index.
Bottom line is that this was not an all or nothing bet. Money will be made or lost in increments about double the amount the index changes. I still believe the contract will end up being a push, as it appeears the whole trade was only to provide liquidity to some big brokerage or hedge fund.