Morning Stuff

Following the two biggest back to back volume days since early August, we’ll get today another above trend volume day solely due to quadruple witch expiration. With the open interest in the SPX options at strikes around current levels relatively small, it may be uneventful. The US$ is bouncing for just the 2nd day in the past 11 off yesterday’s one year low. The Pound is lower after a UK newspaper reported that Lloyds Banking needs to raise more capital and may have to remain in the government’s asset insurance plan until they do so and the Yen is down after Aiful, a large Japanese consumer lender, said they need to restructure their balance sheet. Its stock was offered limit down by 27%. Chinese stocks fell more than 3% to a one week low and HK also was lower after government officials expressed concern with the pricing and other risks with the enormous lending that has gone on. There is no US economic data today.

The Baltic Dry Index has fallen today to the lowest level since mid May, down for a 6th straight day at 2,356. It still remains 255% off the Dec lows but is now down 45% off the late May ’09 high and is 80% below the record high in May ’08. To give perspective on how much of an outlier though the May ’08 high was at 11,793 and compared with today’s level, the 20 year average is about 2,300.

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