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Commentary

Lending rate news, and signs of bullishness?

  • TED Spread at 2.57, way below the highs of 4.5 or so. Still, a little high, but should get better.
  • 13 week treasury bill yield at 1.24%, which means people aren’t flocking to buy T-bills.
  • NSE Overnight MIBOR at 6.23%, but 14-day to 3-month values are still higher than 10%. Earlier overnight MIBOR had reached 16+%.
  • LIBOR’s getting lower and lower, says WSJ.
  • Large improvements in (lower) Euro borrowing yields, and lots of liquidity.
  • The US will fund $600 billion to money market funds, taking commercial paper as collateral, to ease redemption pressures.

The easing in the credit markets is getting more and more obvious. What isn’t, is that home prices aren’t going up, so the basic reason for the whole crisis (and probably, the recession) remains.

I can’t find the article now, but it seems a number of FIIs had lent shares to other entities who would short sell them, and take the money and put it in the Euro money markets. That spread has gone now, so will they come back in and buy? There still seems to be a lot of shorting going on – the index futures are sitting at almost no premium today. Is this a bullish indicator, all of it?

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