DISQUS

dirk So far they are holding the line on MBS - only down 5 ticks as I write, so they could just compress the spread more by continuing to overpay for MBS (relative to treasuries). 4% Fannies still at 99-30+, they are clearly targeting a par price for that coupon, I am not sure even a 3.3% treasury would move them off that price.

steak Word is there be strong resistance at 3.24% I concur that there will be a treasury crash but its just too soon for that to happen. It will be in many countries interest to have it happen 6 months or a year from now (when Yuan clearing is set up and tested), but at the moment no one benefits from a treasury crash so those who can keep it from happening will for the time being. See: French support of the Pound in the early 30's.

So yeah, just saying that in my humble opinion you're on the right track but jumping the gun.

lizzy36 I have a client who trades crude and nattie for one of the big banks (the one with the best looking CEO)

He has said to me for the last 3 months that there is no volume, no liquidity. He attributes some of this to lack of liquidity and deleveraging. He further attributes it to the lack of prop desk activity (GS aside). He said in the past 3 weeks they have seen some players return. He attributes this to the money that has been made in trading in Q1. But the uptick in activity is minor at best (5%). Spreads are wide and liquidity remains difficult.

As an aside he told me that he will not make the same amount of money that he made in Q1 for the rest of the year (perhaps come close in Q4).

isis42 Thanks for that link, q.
Good grief - Conor Roberts looks like he should be at home playing with his train set! I wouldn't mind betting that Melissa Lee could give him a hammering in a debate. He doesn't exactly look as if he is over-endowed with brains, does he? ( As I mentioned, the lack of brains will be the case by definition, given that he's a Labour candidate. )