May 29th, 2014

"The Bond Bear Is About To Emerge From Hibernation" BofAML Warns

"Get ready to change your thinking on US Treasuries. The larger bear trend is set to emerge," is the ominous warning from BofAML's MacNeil Curry. As yields keep tumbling lower, he believes, US Treasury yields are either testing or fast approaching levels from which we should see a base and eventual resumption of the larger, long-term bear trend.

Dust Bowl Conditions Have Returned To Kansas, Oklahoma And North Texas

When American explorers first traveled through north Texas, Oklahoma and Kansas, they referred to it as "the Great American Desert" and they doubted that anyone would ever be able to farm it. But as history has shown, when that area gets plenty of precipitation the farming is actually quite good. Unfortunately, the region is now in the midst of a devastating multi-year drought which never seems to end. Right now, 56 percent of Texas, 64 percent of Oklahoma and 80 percent of Kansas are experiencing "severe drought", and the long range forecast for this upcoming summer is not good. In fact, some areas in the region are already drier than they were during the worst times of the 1930s.

Third Tailing Treasury Auction Concludes This Week's Bond Issuance

Moments ago, the Treasury department concluded its auction activity for the week with the issuance of $29 billion in 7 Year Notes (Cusip WN6), which in keeping with the prior two - 2 and 5 Year - auctions earlier in the week, also had a modest tail: the bond priced at a 2.010% yield (73.9% allocation) compared to a When Issued of 2.009%. Then again, considering the big drop in yield from April, when the same auction priced at 2.32% this is perhaps not too surprising.  Notably, this was the first 7 Year auction tail since December, and is once again notable considering the overall strength of the secondary bond market.

Over A Thousand Soldiers Killed As Ukraine Fighting Escalates, Russian Media Reports

According to RIA, quoting Slaviansk people's mayor Vyacheslav Ponomaryov, about 1,200 Ukrainian army soldiers have been killed during a special operation in Slaviansk, and eight helicopters and 15 armored vehicles were destroyed. Supposedly this includes the 1 helicopter whose crash was reported previously. "According to our information, the Ukrainian army has the following losses and damages: 1,200-1,300 people were killed, eight helicopters, 15 armored transport vehicles, and three [artillery] weapons destroyed. They are suffering huge losses. I’m speaking only about Slaviansk," Ponomaryov said in an interview with the Latvian radio station Baltkom.

Peter Schiff Slams PikettyMania

There can be little doubt that Thomas Piketty's new book Capital in the 21st Century has struck a nerve globally. In fact, the Piketty phenomenon (the economic equivalent to Beatlemania) has in some ways become a bigger story than the ideas themselves. However, the book's popularity is not at all surprising when you consider that its central premise: how radical wealth redistribution will create a better society, has always had its enthusiastic champions (many of whom instigated revolts and revolutions). What is surprising, however, is that the absurd ideas contained in the book could captivate so many supposedly intelligent people

10Y Treasury Yield Hits 2.40%

It seems shorts keep covering and the Chinese keep buying (through Belgium of course - as they sell CNY, buy USD, and grab the extra yield on Treasuries). Despite stocks relative stability, 10Y yields have just hit 2.40% for the first time in over 11 months (as USDJPY broke down). It seems this morning's dismal GDP print was just enough to confirm the growth/inflation slowing meme (in bond investors' minds) and the yield curve is flattening even further...

GoldCore's picture

Financial expert, Pentagon insider and bestselling author James Rickards has warned that “typical investors” may not be able to acquire physical gold when prices begin to surge hundreds of dollars a day as “massive shortages” will take place. In another fascinating interview,, Rickards said that gold will become the preserve of the “big guy” in the form of sovereign wealth funds and central banks.

Someone Is Dead Wrong About The Economy

Bottom line: someone is dead wrong on the economy, but we are glad that the weathermen formerly known as economists are putting all these timestamps out there in the public domain. Because we eagerly look forward to seeing just what the scapegoat will be when Q2 GDP mysteriously fails to soar to 4%. And judging by what the bond market is doing, the only place that may see 4% growth in Q2 is China (net of all the fabricated data of course).

Texas VA Run Like A "Crime Syndicate" Claims Whistleblower

"For lack of a better term, you’ve got an organized crime syndicate," a whistleblower who works in the Texas VA told The Daily Beast. "People up on top are suddenly afraid they may actually be prosecuted and they’re pressuring the little guys down below to cover it all up." What’s worse, the documents show the wrongdoing going unpunished for years...

"Pent-Up" Pending Home Sales Demand Missing; Down 9.4% YoY

But it's the weather... nope... NAR blames excess inventory as giving people too much choice and slowing their purchasing decisions for the notable miss on both MoM and YoY sales. This is the 7th month in a row of declining YoY sales. The 0.4% rise MoM missed expectations of 1.0% as the pent-up demand from a cold winter appears to be missing in action. Of Course NAR is optimistic (but even they are cautious), "an uptrend in closed sales is expected, although some months will encounter a modest setback."

Consumer Comfort Plunges To 6-Month Lows

Despite record highs in stock markets and talking-heads explaining that a terrible Q1 GDP print is nothing to worry about, Bloomberg's Consumer Comfort index collapsed to its lowest level in 6 months as 'Buying Climate' collapsed and economic expectations plunged from 48 to 42.5 (7-month lows). Those earning over $100k are happy and comfort soared but the comfort of those earning under $40k plunged to new cycle lows. The Fed won't be happy... need S&P 2,200 for animal spirits to come back again...