Comments on: Banks buy Treasuries paying less than 0% interest: What’s going on?

By: doydum

doydum — Sat, 28 Nov 2009 18:57:10 +0000

Why don’t we interpret the buying of T-Bills in a larger context?

http://jubakpicks.com/2009/11/23/the-next-bubble-heres-a-logical-and-surprising-place-to-look/

There is no guaranty that these T-Bills will be unwound in January.

By: What Story Does the Bond Market Tell Us? | Reaction Radio

What Story Does the Bond Market Tell Us? | Reaction Radio — Tue, 24 Nov 2009 13:49:19 +0000

[...] Interesting post from Jim Jubak, detailing how banks are willing to pay for short-term (3 month) bonds with negative yields. His explanation is that as we approach the year-end, banks are window-dressing their balance sheets, to make it appear they are holding less riskier assets that are not subject to additional capital raising as mandated by capital adequacy ratio rules. Quite logical and the fact that they are short-term in nature, they could just easily let them mature (taking a minor loss on the negative yeilds) and shift them to riskier assets when their balance sheets are less under scrutiny. This is bad news for riskier assets like stocks and commodities towards the year-end, but positive once banks start to unload their "risk-free" treasuries and shift back to the former. Read more on this from Jim’s original post. [...]

By: thebanker

thebanker — Tue, 24 Nov 2009 02:36:29 +0000

JIM

WINDOW DRESSING HAS BEEN AN ART FORM OF THE BANKS FOR 20 YEARS.
WE USED TO REPO OUR ASSETS SO AT THE END OF THE YEAR, WE WERE TRYING TO LOOK LIKE A SMALL FRENCH BANK WE WOULD MAKE THE DEALS WITH THE JAP BANKS WHICH WERE NOT AT YEARS END BUT WOULD MAKE THEM HAVE MORE ASSETS
SMOKE AND MIRRORS TO MAKE THE JAP BANKS LOOK GOOD

By: faroos

faroos — Mon, 23 Nov 2009 17:37:37 +0000

Jim, how do we know that it is the banks who is buying. is there a data showing this,,

By: EclipseAgent

EclipseAgent — Mon, 23 Nov 2009 16:46:25 +0000

With the $VIX where it is now.. long term puts have been quite cheap to protect your downside.. I’m actually buying and selling some straight PUTS expecting that we’ll have a little santa rally (but expect the year to end near where we are now, or lower).