I’m seeing potentially significant moves in several areas of the currency and bond market this morning. Most notably, the Dollar Index is breaking out to the upside (+89 ticks to 87.55) and the 2-year swap spread is blowing out (+15 basis points to about 73 bps as I write). These are “yellow alert” signals that suggest something is awry in the credit markets again. Take notice.
I should also note that the cost of 10-year CDS on U.S. government debt continues to increase, touching a record-high 88 bps on Friday. This recent post explains the potential causes and effects of this development. Finally, gold continues to rise — with the yellow metal up about $28 an ounce in the spot market last I checked.
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Hi Mike,
I just read your Excellent current article on the Obama real estate plan-Foreclosure Moratoriums (bail out for consumers)-I retired from the third largest bank in the world-I was a senior loan officer and a senior mortgage foreclosure specialist (I know the process from the beginning of a home mortgage loan to its foreclosure process)-your article is on the money-you did an excellent job of pin pointing the problem areas with this plan-while working in foreclosures, I saw allot of abuse by the home owners-after they had their payments reduced-they went out and spent the monies they saved on the mortgage and put additional debt on their charge cards-then the LTV shot up again!!!–they were under water again!!-I agree with you-this bailout plan will be a failure and a waste of tax payer’s monies!!
Kent