The Fed's two special meetings today

The Federal Reserve Governors are meeting today under expedited procedure. This meeting was called Friday afternoon.

I didn’t notice if there were Black SUVs lining Liberty Street this weekend, outside the NY Fed offices.

After this hastening called special meeting Fed chair Janet Yellen will meet with President Obama and Vice President Joe Biden at The White House.

Now chatter on the Street is talking about possible bank bailouts in Italy, with Spain a close second.

But my intuition is telling me this has more to do with Deutsche Bank. The ECB with a backstop from the Fed may use the Italian banks the same way the Fed used AIG.

That is to avoid a panic by bailing out Italian banks and then funneling the money to Deutsche in the form of debt payments or derivative swap payments.

I believe the tell on this is the crowded trade last week in US treasuries. The yield on the 10-year fell more than 50 basis points this year from 2.25% into 1.68 range, with acceleration last week.

The smart money always moves first.

DB’s shares in the US were down 7% last week and for this year are down 34% despite a mid-March rally, which saw the price climb above $20/share.

It’s a guess on the agenda, but look to see how DB shares do this morning to get a better read on the meeting.

The smart money will know,

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