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Morning Notes For November 1st 2010 at Trader’s Narrative




Morning Notes For November 1st 2010


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The following is a guest post by a buy-side analyst working in a US asset management firm. The author’s comments are in italics. I welcome your feedback in the comments:

  • On the Fed: The word from the pits in Chicago is that the average response from primary dealers to the Fed’s poll of how much quantitative easing will be announced on Wednesday was $930 billion. We are highly skeptical the Fed will announce much more than $500 billion. Meanwhile, the Washington Post says the Fed’s QE announcement will test the Fed’s credibility. People are highly skeptical the program will actually do much to help the economy, in part because the Fed Chairman himself has downplayed its likely usefulness. – FTN Financial
  • Hedge Fund equity positions rise to April peaks - By looking at the rolling betas of daily HF returns to global equities, it appears that HF exposures to equities have increased further and are now at or close to the most bullish levels of the past two years. JP Morgan – Nikolaos Panigirtzoglou
  • Treasury sitting on ~$20B AIG gain - Treasury today expected to say AIG pulled in about $37 billion in proceeds from the sale of its Alico international life unit (which closes today) and the AIA IPO. That total includes over $27 billion in cash, more than enough to pay down the Fed’s line of credit to AIG and move forward with the recapitalization. Treasury is now about $20 billion in the money on a mark-to-market basis on AIG. – Politico
  • The two package bombs intercepted by authorities in Britain and Dubai last week appear to have been built to detonate “in flight” and to bring down the planes carrying them, President Obama’s top counterterrorism adviser said. – WP
  • Rich nations face increased debt burden - The government debt burden shouldered by employees in the rich world will more than double between 2007 and 2015 – FT

US Debt as % of GDP (1946 to 2014)
US debt relative to GDP Nov 2010

  • “Merkel consigns Ireland, Portugal, and Spain to their fate” - Germany has had enough. Any eurozone state that spends its way into a debt crisis or cannot adapt to a monetary union set for Northern rhythms will face “orderly” bankruptcy…Currency unions do not eliminate risk: they switch it from exchange risk to default risk.London Telegraph
  • Ted Sorensen, the admired longtime assistant to President John F. Kennedy who provided his chief with many of the words and thoughts that still resonate through American life, died Sunday at New York Presbyterian Hospital of complications from a recent stroke. He was 82. – WPthat means he was in his early 30’s when he was writing for Kennedy.

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One Response to “Morning Notes For November 1st 2010”  

  1. 1 Mr. E

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    This debt to GDP graph does not match with the data that i have seen for the same information.

    Debt to GDP after the war was much higher than it is now.

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