30 Year Prices At 4.38% In Very Weak Auction; Indirects Flee

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Thu, 05/12/2011 - 13:20 | 1268431 FOC 1183
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and just like that.  a terrible auction triggers the purchase of 200k e-minis.  algos love their correlations

Thu, 05/12/2011 - 13:35 | 1268510 camaro68ss
camaro68ss's picture

And just like that silver and gold rebound!

Thu, 05/12/2011 - 13:36 | 1268532 Clowns on Acid
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Well ID'd.

Thu, 05/12/2011 - 13:19 | 1268434 Hondo
Hondo's picture

All new securities immediately leveraged with proceeds put into equity

Thu, 05/12/2011 - 13:19 | 1268444 baby_BLYTHE
baby_BLYTHE's picture

Markets GREEN. You cannot make this shit up!

Thu, 05/12/2011 - 13:23 | 1268452 Sudden Debt
Sudden Debt's picture

Calculating in QE3 trough 12


Thu, 05/12/2011 - 13:38 | 1268526 Cassandra Syndrome
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Grim news is growing, so its practically a certainty. At the very least QE2 lite.

Thu, 05/12/2011 - 13:51 | 1268620 legal eagle
legal eagle's picture

Baby blythe kinda looks like the cover of the first evanescence album, like it.

Thu, 05/12/2011 - 14:22 | 1268756 baby_BLYTHE
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That was there only good album too!

Here is a better female fronted band (the lead singer is a friend of mine!):


Thu, 05/12/2011 - 13:19 | 1268446 Sudden Debt
Sudden Debt's picture



cnbc said so last week....



Thu, 05/12/2011 - 13:22 | 1268447 LawsofPhysics
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Okay, ZH has reported on the debt ceiling breach several times now.  Is this really it guys?  There should be a huge carry trade in here somewhere for this limbo period, right?  What's up and what will the next set of treasury shenanigans be coming from Turbo Timmy?

Thu, 05/12/2011 - 13:25 | 1268465 Tyler Durden
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Dont take our word for it. Here is Dow Jones: "US Treasury auction to take US over debt ceiling on Monday."

Thu, 05/12/2011 - 13:28 | 1268480 Sudden Debt
Sudden Debt's picture

Maybe nobody will notice?


Thu, 05/12/2011 - 13:37 | 1268523 camaro68ss
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Awwww Debt ceiling is just a number right

Thu, 05/12/2011 - 13:47 | 1268581 tickhound
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Debt target resistance breached, becomes support, set sights on new target

Thu, 05/12/2011 - 14:28 | 1268795 SheepDog-One
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If The Bernank keep his hands over his eyes, he's pretty sure no one can see him.

Thu, 05/12/2011 - 13:32 | 1268502 6 String
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The thing about Boehner is will he really hold the line? What is the history on this guy. In the linked article he is quoted and indeed right...."it's more irresponsible to hike the limit without serious budget cuts."

Boehner sounds steadfast. And if this were true, we can expect a U.S. default....but it's happened a couple times in the late 90s and the markets went up. Any take on this?


Thu, 05/12/2011 - 13:42 | 1268570 Sancho Ponzi
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I'm sorry to say this, but Boehner can't hold the line. Hell, nobody can. You can't run huge deficits without increasing the debt limit, and there's zero chance spending cuts could come anywhere close to balancing the budget, especially with the economy in the shits. 

The problem with having your own currency and printing presses is that nothing can stop the goons in DC from spending us into oblivion. With the Fed and PD's as enablers, Timmy can continue to sell bonds and finance deficits forever. Of course at some point all hell will break loose and either the Gov't will be overthrown or a new currency will be issued. Welcome to the wonderful world of true fiat currency.

Thu, 05/12/2011 - 13:51 | 1268616 6 String
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Why, though, don't you think he can hold the line? I understand the thesis:

No increased limit, shutdown of government funding, economy goes into deflationary death spiral.

But, even then, if Boehner gets his way, massive spending cuts but a 2 trillion debt-limit raise, economy noise-dives, and the Bernake prints--again.

Since all roads are irresponsible now--Congress and the Federal Reserve are boxed in, why the hell can't Boehner hold whatever line he wants? It's all fucked anyway, right?

I know the problem is we all just want to get the Weimar rally on now--since at least the outcome is somewhat more predictable....but the Boners of the world, excuse me, Boehner, can just cause a deflationary hell instead. And who's to say that is not ulimately the better course?

So, Boehner knows this, and it doesn't asnwer my question. Why can't he hold the line?

Thu, 05/12/2011 - 14:15 | 1268666 Sancho Ponzi
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The Fed spent $3.55 trillion in 2010, which comes to a little less than 25% of GDP. Revenue for 2010 was $2.13 trillion, and the deficit was $1.42 trillion, so the deficit contributed to about 10% of GDP.

With revenues not improving significantly, cutting spending would crush the economy, along with the re-election hopes of the Beltway Bandits. There's no political will to allow this to happen, and any politician who tells you otherwise is being disingenuous. Politically speaking it can't happen, so it won't happen. 

*Added: I'm not saying there won't be temporary shutdowns, as there may well be. But temporary shutdowns are almost always politically motivated and will do little or nothing to remedy the mess we're in.

Thu, 05/12/2011 - 14:21 | 1268736 6 String
6 String's picture

Sure there is a political will...if Boehner and Co. successfully destroy the economy while blaming Obama and Co. for reckless "status quo" then there's your incentive.

I believe in what you're saying Sancho, even agree. But perhaps if a half-bright like me can understand we're damned if we do and damned if we don't I think there enough in politics that fully understand this too. In fact, I'm sure Boehner has seen the Lindsay report and many others as well...

Which mean they can hold the line and pick any fucking fight they want and default be damned--because it's going to end up a voluntary default or otherwise.

Thu, 05/12/2011 - 14:36 | 1268842 Clorox Cowboy
Clorox Cowboy's picture

Yeah, but if you're a politician there's a huge difference between knowing the end of the US ponzi scheme is near, and actually signing its death sentence.  If Boner causes us to default and worst-case scenarios come to pass, we could be looking at a complete "changing of the guard" (from inside or outside the current system, take your pick).  He would effectively be putting his job in more jeopardy by defaulting than by pretending to be a tough guy.

Nobody in Congress will ever do it.

Thu, 05/12/2011 - 18:28 | 1269865 chubbar
chubbar's picture

What if the Repukes are worried about winning the whitehouse and having the majority in congress next year when they KNOW this puppy is going down? Would that be incentive enough to pull the trigger early on Obummers watch???

Thu, 05/12/2011 - 14:55 | 1268928 Sancho Ponzi
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The dollar is the world's reserve currency. Much of the wealth of foreign countries is held as dollar currency reserves, and is used for international trade and purchases of crude. 

There are times I'd love to tell the rest of the world to 'stick it', but that could be viewed an act of war by other nations. Undoubtedly all hell would break loose. A default would be much more plausible if there were another reserve currency.


Thu, 05/12/2011 - 14:20 | 1268740 DeadFred
DeadFred's picture

Because he is a politician who believes that long term he can do good for his constituents (and himself) by staying in office. He will stay in office if he can 1) bring in contributions and 2) avoid giving his future opponents deadly soundbites for their attack ads. His consultants have told him that a US default will produce very,very nasty soundbites. Morally holding the line is the right thing but it is political suicide and it won't happen. Some devil's compromise will be worked out that gives soundbites to both sides, feeds the banksters and kicks the can down the road.

Thu, 05/12/2011 - 14:31 | 1268797 Clorox Cowboy
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He doesn't have to hold the line all the way to default in order to get what he wants (the same thing EVERY politician wants...to make the other side look worse).  All he needs to do is rachet up the hate-speech until late June / early July and get more cuts than the Democrats are willing to give him today and he wins...in the Charlie Sheen sense of the word "winning".

Political memory is short, therefore why would Boner choose the "correct" long-term solution (default), when the less-optimal solution above makes him look like a hard-fighting debt patriot superhero to the sheep, with none of the short-term hardships that a default would create?

Thu, 05/12/2011 - 14:48 | 1268885 6 String
6 String's picture

All excellent points, thank you.

Thu, 05/12/2011 - 13:44 | 1268575 LawsofPhysics
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From Tyler's link above;

"House Speaker John Boehner (R., Ohio) said Monday that any increase in the government's debt limit should be accompanied by trillions of dollars in spending cuts.

"It's true that allowing America to default would be irresponsible. But it would be more irresponsible to raise the debt limit without simultaneously taking dramatic steps to reduce spending and to reform the budget process," he said."


If Boner intended to hold the line, he would realize that default is the responsible thing to do.  Defense and entitlements remain the only cuts that would make any difference at all.  Anyone really think the debt ceiling won't get raised?

Thu, 05/12/2011 - 13:47 | 1268582 Chump
Chump's picture

Boehner is a boner saying whatever he thinks will get him elected over and over and over and over.  Any Republican who wants to chastise anyone else for astronomic spending needs to go eat a bag of dicks.

The US does not default if it hits the debt ceiling; it defaults if it can't pay interest and principal on its debt.  Hitting the debt ceiling means the US government cannot issue new debt (that's a good thing, unless you're a leechfuck).  The US government currently collects sufficient revenue to pay for interest and principal payments.  Entitlements?  Not so much.

Guitar picker?  I'm trying to get a handle on this here 5-string banjo.  Much more difficult than I anticipated.


Thu, 05/12/2011 - 14:52 | 1268914 6 String
6 String's picture

Chump, forget about it. Lester Flatts da man.

Thu, 05/12/2011 - 13:41 | 1268547 HelluvaEngineer
HelluvaEngineer's picture

Wonder how long it will take them to revise that article?

Thu, 05/12/2011 - 13:33 | 1268516 Alex Kintner
Alex Kintner's picture

It's like popping the cherry. I can only be done once. The virgin is now a whore. No longer a news story.

Thu, 05/12/2011 - 13:20 | 1268449 6 String
6 String's picture

Russell 2000 is all that matters. Auctions to proceed Monday without hiccup.

They are nearing the end of this tunnel, how will the other side of it look?

Thu, 05/12/2011 - 13:24 | 1268455 lolmao500
lolmao500's picture

This market is insane. Has been since 2007.

Thu, 05/12/2011 - 13:25 | 1268462 firstdivision
firstdivision's picture

My favorite headline from the day thus far "Fed warns politicians to raise US debt ceiling".  Cause daddy wants to buy more coupons!


Thu, 05/12/2011 - 13:25 | 1268463 Don Quixotic
Don Quixotic's picture

Anyone with any thoughts on how this will affect PMs and/or equities? Seems equities and PMs have both gone up in the immediate aftermath... what about the long term?

Thu, 05/12/2011 - 13:28 | 1268478 topcallingtroll
topcallingtroll's picture

My best educated guess is that in the long term we are all dead.

Thu, 05/12/2011 - 13:33 | 1268515 Don Quixotic
Don Quixotic's picture

Too true.

Thu, 05/12/2011 - 13:36 | 1268517 Don Quixotic
Don Quixotic's picture

Does that mean you're calling a top on life?

Thu, 05/12/2011 - 13:39 | 1268537 JuicyTheAnimal
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Silver shorts better cover now. 

Thu, 05/12/2011 - 13:27 | 1268467 plocequ1
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"Likely the last one for a long time now that the Treasury is in deep debt ceiling trouble"

Theres new and improved debt ceiling software that solves any annoying debt ceiling issues. Rally on

Thu, 05/12/2011 - 13:24 | 1268474 Sudden Debt
Sudden Debt's picture



June... what a beautifull month.

Woman wearing short skirts...

Woman with tops that are to small...

Imploding bonds markets...

BBQ time every day...


Live is just great :)


Thu, 05/12/2011 - 13:38 | 1268527 Abitdodgie
Abitdodgie's picture

Do you live in England by any chance.

Thu, 05/12/2011 - 13:36 | 1268533 ZakuKommander
ZakuKommander's picture

OT, except for BBQ.

Everyone ought to get one of these:


I come home from work, put in the wood charcoal, by the time I change (15 minutes) it's at 700 degrees F.  Haven't made a bad steak, burger, chop, fish in 4 years.  

No less necessary than physical silver necessary to a comfy survival.

Thu, 05/12/2011 - 14:50 | 1268899 WideAwake
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and what would the summer be without pissed off Greeks in the streets and the sweet smell of CS gas in the air

Thu, 05/12/2011 - 13:26 | 1268482 Xibalba
Xibalba's picture


Thu, 05/12/2011 - 13:31 | 1268499 Alex Kintner
Alex Kintner's picture

I see Goldman Sux is down 4% today. Are they shorting themselves? Calling RoboTrader -- do I BTFD?

Thu, 05/12/2011 - 13:31 | 1268507 Sudden Debt
Sudden Debt's picture



IAD!! IAD!!!


Thu, 05/12/2011 - 13:29 | 1268501 Clowns on Acid
Clowns on Acid's picture

Thanks for timely commentary. IMHO the ES immediately ramped up because traders think that:

  • Cash will come out of bondfs and into equities.
  • The debt ceiling has been de facto breached. For all the REP hot air regarding not increasing the debt ceiling...they will have no choice but to do so begrudgingly.
  • The Fed and lil Timmy do whatever they want and then use the Soros backed Lame Stream Media to market their kleptomania to the masses.
  • I am betting that this move up won't does not have legs. Tight stops of course....ahem.  
Thu, 05/12/2011 - 13:57 | 1268632 sbenard
sbenard's picture

Your comment made more sense to me than anything else on this page. Thanks!

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