|I sent out an email earlier in the week discussing the noticeable ED-FF spread widening since the start of the year. On the right is a chart of EDH7 vs a 50-50 weighting of FFJ7 and FFK7. This FF mix matches up the Fed meetings in EDH7 exactly, and is a good reference point for the libor spread widening. The spread settled Friday at 36.75, but this looked to be a high settle in the spread (EDH7 settled a little low). The previous post-Treasury money rule high (from mid-October) was 36.5. So we are in the ballpark of that previous high. But as you can see from the August high, there is no reason to think this couldn’t go higher. I’m not saying this is likely, but the possibility exists…
…Here are some things we should consider with respect to the ED-FF spread. We should look at some of these areas for corroboration, but more importantly, to see if there are areas where we can find some cheap protection or positive expected value:: CLICK TO READ THE REST OF THIS ARTICLE FROM THE CA WEB SITE
Next Week: I uncover Trump’s Master Plan.