Thursday, September 24, 2009

Financial Headlines 9/24/2009

  • The Fed left interest rates unchanged yesterday, and said it would slow down and extend its MBS purchase program until March of next year. Since the Fed has purchased 80% of all MBS issued by Fannie and Freddie in the past year, I'll let you guess what direction mortgage interest rates are headed when its buying binge comes to an end.
  • In some slightly encouraging news for the job market, initial claims for jobless benefits fell 21,000 to 530,000 for the week ended Sept. 19. Continuing claims fell by 123,000 to 6,138,000 from the preceding week's revised level of 6,261,000. Still, claims are high, indicating it'll be awhile before we start adding jobs.
  • The SEC is actually going after someone for insider trading in the options market. This comes as a complete surprise to me, a former options market maker, as it seemed like suspicious insider trading happened all the time ahead of merger news without arousing any action from regulators. In this case, the SEC has filed a civil lawsuit against an employee of Parkcentral Capital and accused him of making $8.6 million in profits from buying Perot Systems options ahead of Dell's announcement that it would purchase the company. The man accused has worked for various Perot entities and allegedly spoke to a director from the firm about the impending deal. Nice to know that the SEC is getting off its duff and finally taking insider trading in the options market seriously.