This might be too much financial news for political junkies, so fair warning.
The put/call ratio has finished above 1.0 for the past 18 trading sessions. [more puts than calls]
Wouldn't you love to know what is behind that? The list
- Some made a lot of money on the way down, outright.
- A lot of people are hedging debt via the equities markets.
- Credit derivatives guys have reached into the equity markets for potentially very, very expensive "protection".
Back to the future with this emerging scenario (and aren't these conditions what got some folks financed so short-term in the first place?):
- Best-credit, short-term interest rates continue to fall (T-Bills through 2-yr notes).
- Credit sensitive issues, even short term ones, show no change.
[Therefore, it pays, once again, to "lend long" and "borrow short", which is a liquidity-101 no-no, if you are leveraged to the hilt and buying potentially illiquid assets!]
Funniest thing of the week:
- Hearing Jim Cramer say today (paraphrase), "Now that we don't have to worry about losing our jobs, ..."
- When job loss is localized, everyone wants the government (in this case, Ben Bernanke) to smooth it over; otherwise, it's just a job-cut statistic in a press release.
