FOMC Minutes from Aug 7th meeting published

The minutes from the Aug 7th FOMC meeting were released today. Below are a few noteable observations from the minutes: growing apprehension that turmoil in markets for subprime mortgages and some low-rated corporate debt might have adverse effects on economic growth led investors to mark down their expectations for the future path of policy considerably [...]

Market Internals

As of today’s close , the 60-day put/call has registered another all-time high of 1.07 (1.0678). Over the past 3.5 years, this indicator has marked awesome buying opportunities. Rallies generally begin before the indicator begins to fall.

S&P 500 sector weights

Bespoke Investment Group has published a chart of the current S&P 500 sector weightings. Also included is a comparison between current weights and 1998 weights.

Back from vacation

While out last week, the put/call data improved somewhat. The 10-day closed the week at an elevated 1.23 reading. The 60-day has set a new all-time record high level of 1.064 as of the close Friday.

Today’s Fed action

William Polley has a good summary of the actions taken today by the Fed’s discount window. This is not bailout. It is a very short term (3 day!) loan that accepts MBS as collateral. Borrowers (i.e. BANKS!) have to pay the prevailing fed funds rate 5.25% on all borrowed money. The Fed will likely need [...]

Liquidity versus Credit Crunch

A good article by Tim Rogers at Briefing.com explaining the difference. There is no evidence yet of a credit crunch, only the need for cash to stand in for the subprime assets less able to be valued and used as collateral.

More contrarian sentiment

Mark Hulbert, courtesy of Barron’s, provides an update on investment newsletter sentiment.

Top stories on Bankrate last week

Lucky 13 savings strategies — Following these tips can help you get in control of your finances. Bankrate’s 2007 New Car Guide — The automotive times, they are a-changing and Bankrate follows the trends from smaller cars and hybrids to the burgeoning desire among Americans to “go green” with a information-filled package of stories, interactives [...]

Daily quote

Just came across this timely quote at The Kirk Report : “Disregarding the big swing and trying to jump in and out was fatal to me. Nobody can catch all the fluctuations. In a bull market your game is to buy and hold until you believe that the bull market is near its end. To [...]

Sentiment

from Between the Hedges The ISE Sentiment Index hit an all-time low of 39.0 this morning. It is extraordinary that this gauge of retail option trader sentiment this morning was showing more bearishness than during the major bear market lows during late 2002/early 2003. As well, the CBOE total put/call hit a very high 1.39 [...]

Easy Credit

Great article by the Wall Street Journal on the path to the easy credit market. This one is required reading.

FOMC statement

full text: Release Date: August 7, 2007 For immediate release The Federal Open Market Committee decided today to keep its target for the federal funds rate at 5-1/4 percent. Economic growth was moderate during the first half of the year. Financial markets have been volatile in recent weeks, credit conditions have become tighter for some [...]

FOMC meeting today

Today the FOMC meets to discuss monetary policy. No change in the fed funds rate is expected today. You can view the post-meeting statement at the FOMC website after 2:15pm eastern time.

ETF performance

Bespoke Investment Group has a chart of the day’s ETF performance

New York Times on MBS/CDO

The New York Times has a great, simple graphic which explains the MBS/CDO process. If you want to fully understand the securitization process, this is required reading. The only missing piece is how the agencies such as Ginnie, Fannie, and Freddie back MBS. It appears to be left out in order to focus on the [...]