The future is no place to place your better days

--Dave Matthews

LIBOR futures for 2012 have fallen out of bed. The SP future bounced from a weak close back to 1240.85 resistance on Hooper. The Eurodollar structure is in a "lower first then higher" pattern, and are (as of this post) officially lower. Today's action should be wild.

The "harsh new reality" we warned of in funding metrics is getting harsher. The economic consequence of deteriorating financial conditions extends beyond the last 15 minutes of trading in the SP future. Policy is being cornered into crisis management as the outlook is notched lower. Tools are viewed as losing efficacy rapidly. Central bank policy can still be forceful when major nations are calibrated together. Clearly, other CBs need to play harder. A positive snap reaction in trading markets will not be enough to alter the headwind of already stressed conditions.

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