Category: Trading

Probability of Near-Term Rate Hike Plunges

Today’s comments from Fed Chairman Janet Yellen on rates pushed the probability of any near-term rate hike sharply lower.

The implied probability of an April quarter-point hike fell from 11.5% to 4.6%.

Aprilhike

The implied probability of a June quarter-point hike fell from 34.6% to 28.4%.  The probability of a 50bps-hike went in June went from 3.5% to 1.2%.

junehike

 

Morgan Stanley Channels ‘Glengarry Glen Ross’ to Sell Risky Loans

The New York Post exposed a “Glengarry Glen Ross”-type sales environment for risky loans at Morgan Stanley (NYSE: MS) in an article over the weekend.

In a follow-up to a March 2nd story, the Post said a twilight selling program split advisers into teams and offered them financial incentives to sell highly-profitable securities-based loans, or SBLs.

The program, original thought to only run in the New England regions, was wider than they original thought.  One of the bank’s Florida complexes was also involved, the follow-up story said.

“They held it at night so that the advisers could focus on just selling the SBLs and not being distracted by trading and other work,” said Mitchell, who runs Incite Wealth Management.  “It’s kind of an old-school sales ritual type of thing similar to the movie ‘Glengarry Glen Ross,'” he noted.

 

 

Head of Goldman Sachs Inflation Trading Placed on Leave

What’s the vampire squid up to now?

The Journal is reporting this afternoon that Goldman Sachs (NYSE: GS) put its head of U.S. inflation trading, Josh Schiffrin, on leave while it reviews certain trades.

“Goldman’s compliance executives are seeking to determine whether Mr. Schiffrin’s desk may have violated the firm’s policies in booking certain inflation trades, in which government bonds and their derivatives are used as hedges,” the article stated.

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