Afternoon Reading – December 9, 2010

The Big Picture: Arms Index Extremely Overbought

Dick Arms notes that the short term and longer term ARMS Index (TRIN) is extremely overbought. The ARMS index has a pretty decent track record.

This suggests that the Fed’s QE2 and euphoria over tax cuts and FICA holidays are up against a rather overbought condition.

Traders should tread cautiously here…

The Big Picture: Google Map Foreclosure Tricks

…But the maps do reveal an entire nation littered with foreclosure sales. It is an ugly and graphic depiction of how much inventory is out there, and why housing is stillmany years away from being healthy.

Let’s try to zoom in and see exactly the extent of foreclosures in Florida, one of the biggest boom & bust regions…

Calculated Risk: Freddie Mac: Mortgage Rates rise to Five-Month High

U.S. mortgage rates surged to a five- month high … The average rate for a 30-year fixed loan increased to 4.61 percent in the week ended today from 4.46 percent, Freddie Mac said in a statement. Alphaville: Italian sub debt differenza

So what’s up with Banco Popolare and Monte Dei Paschi Di Siena?

We ask, because credit default swaps on these two Italian banks’ subordinated debt have recently rocketed off from their peers. Alphaville: The bloodbath dries up, for now

Treasury auctioned $13B re-opened 30-Yr bonds at 4.410% versus a 1pm level of 4.463% so the auction came through by -5.3bps. Bid/Cover 2.74X (4-reopening average 2.75X) Indirects 49.5% (4-reopening average 35.5%) **Best since July 2009** Directs 8.1% (4-reopening average 13.5%) *below average* Dealers 42.4% (4-reopening average 51.1%) *below average*

Reuters: Citi names Orszag global banking vice chairman

Orszag, currently a visiting fellow at the Council on Foreign Relations, had worked as director of the Office of Management and Budget under President Barack Obama, and left last July.

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