Tuesday, 21 July 2009

"if you don't know where you going, any road will take you there"

Should be the focus today. Bernanke has done a great job in very difficult circumstances, he's been responsive to the situation in the early stages of the crisis and now appears to be on the front foot treading a tight rope from here; making clear how and that he will remove the monetary stimulus measures but also that he's not going to do it too early and only when the threat of deflation is clearly been avoided. He doesn't get any of the media and political backing that he deserves, perhaps that because he doesn't spend so much time posturing like those lurking the the wings in Washington or that tool in the ECB, JCT.

L: 72% S:268% G: 340% N: -195% ~ $D 0% $G 0% $V 0% $P 0%
The Raven has increased his short positions and cut some longs. Yesterday was interesting, his longs lagged the market down 14bps on the day, yet his shorts took a relative beating down 180bps. He's looking at the way the different sectors are trading and trying to read something from it, but struggling to take much away from it other than a big punt on China and the system being restarted.

The Raven thinks NRG shareholders vote on EXC today, he's been a bit surprised and hurt by the sell off into this vote, but he thinks thats a lot more to do with the natural gas market and how important that is to demand for NRG. He's going to look to put another couple of clips on at these levels with the view that the stock is oversold, that shareholders will see more value than in the EXC deal and hence reject it (this isn't the best short term outcome as the uncertainty on what EXC comes back and does will weigh on the stock as nobody likes uncertainty) or they'll accept it and push NRG's board into talking - in which case the wide spread should close. Either way there's a short road and a long road, although both head in the right direction.

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