Tuesday, February 19, 2008

Quick Takes: Another $50B and some theories to test

Banks hit up the Fed for another 50 billion

Hoping to pour some liquidity into the credit squeeze, the Fed loaned banks $50 billion over the past few weeks. The Financial Times reported that the use of the Fed's Term Auction Facility (TAF) program increased greatly by mid-February.

The Swimsuit Indicator

Bespoke has recently discussed a leading indicator which defines the performance of the S&P 500 for the upcoming year – The Swimsuit Issue Indicator. I am not so clear if the correlation between the Sports Illustrated Swimsuit Issue and index is justified quantitatively. It appears that I will have to study the issue in great detail over the upcoming the weeks to see if the theory is valid... carefully researching all of the reference material.

The Subprime Primer

Finally, a subprime explanation that providers a suitable overview of the situation. The Subprime Primer slide show is a humorous look at the subprime lending fiasco and properly hits the key points. [Note: some NSFW written language near the end].