Rumors, Rumors
3rd June 2008
The market got hit again today after rumors started flying in the afternoon. First, it was a rumor of a bank in California having problems. Then, Lehman had to come out and deny that they had tapped the Fed for cash. The bottom line is that risk aversion is in full swing. The yield curve rocketed steeper for a second day in a row as people ran for the 10 year again. I don’t know whats going on, but things are smoking so there must be a fire somewhere. Bernacke briefly helped things in the morning when he made some comments to support the dollar. Hopefully, everyone took advantage of the rally we had a few weeks ago and either did some selling or bought some protection.
BA