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Hooray for Helicopter Ben

Helicopter Ben yesterday announced that the Fed would lend $200bn of Treasuries to banks in return for AAA rated collateral. Equity markets were delirious – the S&P recorded its biggest one day jump in over five years. Risky credit also staged a rally, but the reaction was a bit more muted. The iTraxx Europe Crossover Index, an index measuring the default risk of the most liquid European high y…

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US economy: hard landing or soft landing?

A stream of poor economic data and some horrendous writedowns from the big banks have meant that risky assets have been walloped. The iTraxx crossover has shot out from 340 to 470 since the start of the year, and most of the world’s equity markets are down between 10 and 15%.

The recent release that I’d like to focus on is last week’s Philly Fed number (or the Federal Reserve Bank of Philadelph…

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