A cyber-bud just posted the fact that the five-year Treasury Note has traded at 0.75% yield, another record low.
Think about it. The world capital markets are willing to give the US money for five years, and get their dollars back with a whopping 0.75% interest per year.
The real money is shouting at us that our deficits are not the issue. Are you listening?
On another front, speculators and hedgers got a new toy today, or, more precisely, gave the unwashed masses access to one of their leveraged toys. My inbox this morning had a short blurb from Jody Shenn at Bloomberg about a house price index opening up for public trading on the CBOE (the options market).
It’s not ground-breaking, since the cross-town rivals at the CME have traded the Case-Schiller contracts for a while now, but the Radar Logic data set is so much larger that we may see some very sophisticated players look for arbitrage between the two, especially on a city-by-city basis.
More to the point, offering a way to hedge against falling home prices to the public at this point sounds like nailing the barn door shut to make sure the horses can’t get back in.