As if on cue...

written this half an hour ago:
<<... the SPX down 1.7% as we speak... giving up yesterday gains... on numbers which in theory were expected (consumer spending down, consumer confidence steady at low level)

Silly market indeed. Good to be long gamma!
>>
now down an additional 1%

Yesterday and today's move "sort of" cancel out, though volume is higher on the down moves (as it has been for a while). But they are big moves. We are entering interesting territory: the views confirmed. We stay long gamma.

EDIT: I can't resist one more line: VIX is at 30 again. There is a whiff of panic around. One feels like head-shaking

Big bounce yesterday in equity markets, with everything else as expected (bonds down, short term rates up, oil up, gold up, etc).

Of course driven by the first estimate on US Q3 GDP, coming in at 3.5% annualized on previous quarter, which was marginally higher than the 3.2% the median expected. So what... what's statistical uncertainty on it? 0.5%~? Physicists get my drift.

This morning european numbers are not so good.

PPI and CPI numbers in Germany, France and Italy are lower than expected or negative, continuing the deflationary trend, EU official unemployment stays at 9.7%.

So what's new?

Nothing has changed.

Don't get too excited: Markets remain very nervous and volatile.

Outlook remain the same.

Stay the course.

Listen to Bob Dylan .

Whatever.

UK NS&I mystery rates

For those who have not yet noticed.
The UK National Savings and Investment 
"is an Executive Agency of the Chancellor of the Exchequer"
whose
"products offer 100% security, because NS&I is backed by HM Treasury".

They are offering 1 year bonds yielding 3.95% gross, for up to 1MGBP: http://www.nsandi.com/interest-rates/index.jsp

The gilts issued by Treasury with ~1year to maturity are trading at less than 0.7% yield.
It is difficult to arb for technical reasons, (see discussion on: http://www.nuclearphynance.com/Show%20Post.aspx?PostIDKey=135448 )
but it still begs the question of why is the Chancellor undercutting his own treasury.

The haruspex agrees with others thinking that it is a politically inspired move to placate the legions of grey haired British savers  whose hard earned cash is earning zilch.
We should probably expect soundbites soon.

But a nagging doubt remains.
Do the crafty accountants at NS&I know something that we don't?
Are they frontrunning the treasury?
Is it time to short gilts big time?

Who knows. Too late to slaughter a pigeon.

First post

Let's be short. This blog is supposed to be a series of short burst from the haruspex, mainly on the state of finance and the economy.
The background is in trading, wholesale trading of derivatives and toxic stuff, volatile slaughter and gaussian random walks.
The eternal faith is in the nudity of our sovereigns of the universe, and the void left by the death of  rational expectations, replaced by  just a few expectorations.
The main website www.haruspicy-finance.com will hold more stuff, including practical examples of how to apply the discipline of innards contemplation to the task of  trading  securities.
Good luck.