Tuesday, December 11, 2007

12.11.07 - Yippie-Yeah - 25bps All Around!

How do you spell that? Took off some of those hedges. Remember that the market typically takes an hour or more to "decide" what it all means. And you were wondering where all this mythical volatility was hiding?

P.S. - I will be looking for support just under/around SPY $149. Just exchanging IMs with J.W. speculating whether the Fed was able to respond to much of the negative news out just this week versus Mr. Market's always current expectations.

P.S.S. - Looks like I had a limited imagination yesterday because that statement isn't making anyone happy. Note the limited Window cut too.

P.M. UPDATE I - Well, more of a move than certainly I had expected and a one way trade at that, which is somewhat unusual. This is still a very tricky environment, although today did "feel" (both intuitively and quantitatively) like an overreaction to me. Yes, I also "felt" alot better about my hedges by the end of the day as compared to yesterday!

P.M. UPDATE II - What's this on CNBC after the bell about 4:55pm CST... a "secret" Fed source says that they are still considering "other means" of addressing the liquidity problem? Hmmmm. It is true that very few banks have been using the Window... Well, tomorrow is another day - as always - we will see.


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