A yen for understanding

Let’s see if I can make sense of Jansen’s penultimate post today.

Exotic option hedging contributed to the flattening of the Treasury curve today.

Recall that a “flattening” yield curve means that the spread between yields on shorter maturities and longer maturities declines. Like in this picture from Bloomberg (orange = yesterday, green = today):

That may [...]

Warsh, rinse, repeat

Federal Reserve Governor Kevin Warsh has written an op-ed for today’s WSJ. He has some surprising things to say.

Judgments made by policy makers in the current period are likely to be as consequential as any made in the depths of the panic. That means policy makers should continue to communicate as clearly as possible [...]


Do not worry; I will not make this a habit. And I certainly will not talk about “head and shoulders patterns” or “Elliott waves” or any such bollocks.

If the only market indicator you watch is the Dow, you might not think very much is happening… But some strange things seem to be afoot.

First, [...]


As I mentioned, the primary purpose of the bond crash/course is to record my personal quest for a greater understanding of John Jansen’s daily commentary. I have added a new category to tag posts with specific efforts along these lines.

Let’s try one from today and see if we can apply what we have covered [...]