Chillin' out till it needs to be funded
To reiterate, today’s auctions marked the end of a very short week of seven back to back $30 bln auctions which went like a breeze for the Fed , dealers having to pick a maximum of 40% in each auction. As PDs head out of the auction the $200 bln auctions backed by investors to the hilt with the 7 yr getting a more conservative Bid cover of 2.6 but nevertheless sailing through at a 1.45% yields for the $35 bln issue, somehow does not speak to the noise outside about a liquidity crunch in the markets.
Probably a mismatch caused bythe low yield subduing of the recession tales and the tattle against the Euro going against the demand building up with more Existing home sales statistics of 4.25 mln (revised) for October and 4.42 mln for November continuing the year end closing fairy tale in housing markets and a good 3.5% uptick in retail sales. The deal business has been hot too even as JP Morgan underwriting teams come under the scanner for being too vigilant or too flippant about their collateral and/or others morals when acting on their clients’ behalf having lent to them extensively in business interest.
SEC is on the dock too, giving GOP something good to cry about as SEC finds lame ducks for prosecution and none of the promised big banker CEOs..But then the election year part never interferes with the Economy with all the Limitations on electoral funding!