I’m Not Sure What This Means, But The Euro Basis Swap Just Hit

I’m not sure what this means, but the Euro basis swap just hit   a new low for this crisis.  Maybe it will just take time to catch up, maybe it is a sign that the rate cut isn’t transferring through the system (yet).

We have moved 40 points on the SPX from the overnight lows to the morning highs.  Fortunately a chunk of that move was on the quashing of attempted democracy in Greece.  If it hasn’t been surreal up until now, it certainly is now.  I have to believe there are some unintended consequences from all of this and they strike me as being potentially dangerous.

Source: Bloomberg