And Now The 10 Year Is Surging

Tyler Durden's picture

After the USD has confirmed it is no longer a flight to safety currency, and stocks can only go up (91 days until we pass the all time highs at the current rate of no volume HFT-inspired, Primary Dealer facilitated and Fed funded levitation), suddenly we see a dramatic pick up in bond buying, for no reason, aside from the fact that full blown war may join the revolutions in the Middle East. And since nobody will ever sell one share of stock (if they did there will be an immediate congressional hearing to establish whether selling should be, in fact, made illegal) the only way to protect capital is to jump into the 10 Year. That this ongoing divergence makes no sense is irrelevant: such is life under Chairsatan Vissarionovich Jr.


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jus_lite_reading's picture

I was wondering when this might happen. I'm still certain the last man standing will be the US as the whole world goes down in flames.

Mr Lennon Hendrix's picture

This is like watching a cage fight, real monie vs. fiat, and Bernanke's in fiat's corner yelling "Hold on!" with 4 minutes left in the round.  Fiat is about to have its arm dislocated and broken in three seperate spots....'Just tap Bernanke!'

Larry Darrell's picture

Maybe he saw the Forrest Griffin fight from a few years back where Forrest had a broken arm but still won the fight?


Mad Max's picture

If I wanted to pick "last man standing" I would look at southern South America generally, and Brazil in particular.  The US isn't likely to be unscathed if there's any global war this time.

monkeyfaction's picture

Is this what it felt like in late 2007 before everything fell apart?

Cyan Lite's picture

Real Housewives of Atlanta must've been canceled to cause this big surge in the 10yr.

nonclaim's picture

There are too many PhDs turning the knobs on the economic machine. Pressure is building up, steam hissing from many cracks and nobody can find the relief valve...

Well done Bernanke.

No Mas's picture

"And since nobody will ever sell one share of stock (if they did there will be an immediate congressional hearing to establish whether selling should be, in fact, made illegal) the only way to protect capital is to jump into the 10 Year."

So, if no shares are sold, how then does the price of an equity share increase?

firstdivision's picture

bid flashing.  it gives the appeance of an interest to buy w/o a transaction taking place.

Dick Darlington's picture

Every single market (except equities of course, those are Vissarionovitch's pet project destined to levitate to the moon) getting more and more unstable. When the wheels finally come off it'll be hell of a show.

koot's picture

With the Fed now conducting high frequency trading in "Flip that Bond", does anyone on this planet doubt who runs the Fed?  GS runs the feds trading desk of course.

truont's picture

Someone BTFD.

Simple as that.

geminiRX's picture

According to Mark Armstrong, this is why there will be NO crash in the stock market like so many others predict. There is no confidence in government debt instruments and little confidence left in the US dollar. In order for there to be a stock crash, there has to be high investor sentiment to the US greenback - which there is NOT. The most important message the Armstrong makes is that we are witnessing a fundamental shift of wealth from the public sector to the private sector. This will result in a stock market surge as well as surge in precious metals (Armstrong stated that $5000 gold is not out of the question). Out of all economists, I respect Armstrongs theories - they have held up well.

Janice's picture

Who dat? Mark Armstrong?  Not Marc Faber, Not Ed Steer, Not Eric King, Not James Rickards...who dat?

Boston's picture

As QE2 winds down, and a Risk Off period begins, where ELSE will the big money go, other that US Treasuries!?  Just as in 2010, Treasuries will rally...if only for a few months.


When enough pain's been inflicted in other markets, the Fed will be able to trot out QE3.  Then Treasuries (prices) will resume their fall.



SheepDog-One's picture

So what? Equities go up, backed by ever more worthless dollars. Stocks are irrelevant.

Hephasteus's picture


Hurry it's almost 3pm.

Dr. Richard Head's picture

If only the public watched the ticking clock of this upcoming margin call as they do any of the circuses (baseball, football, basketball, et. al)

NOTW777's picture

when do they raise margin on fraud and corruption? how about koolaid margin

StychoKiller's picture

POMO-ADE!  It's got the mind-fscking that Brainz crave! :>D

jobs1234's picture

And meanwhile, Bernanke has decided to give your debt holders the finger:



The Federal Reserve isn’t going to fall on its sword to save the world economy, Ben Bernanke said Friday.

The Fed is not going to raise interest rates or tighten U.S. monetary policy prematurely just to satisfy the demands of emerging markets, he said in a speech in Paris ahead of this weekend’s meetings of the Group of 20 finance ministers. Read our full story on the G-20 meeting.

Many critics argue that the Fed’s easy money policies are having bad unintended consequences in emerging markets. They say that all those dollars being created by the Fed are flowing into commodity markets and emerging markets, creating inflation, currency imbalances and asset bubbles. They insist that the Fed stop trying to reinflate the U.S. economy.If emerging markets have a problem with too much capital flowing into their economies, they should fight back with their own monetary policies, rather than demand that the Fed do their dirty work, he said.Read our full story on Bernanke’s speech.

Bernanke’s response: The Fed is doing what it thinks is best for the U.S. economy. If China, or India, or Egypt have a problem with that, it’s up to their authorities to recalibrate their own policies. It’d be really good, for instance, if China would allow its currency to appreciate.

Bernanke spoke from his own painful experience. The Fed failed to effectively handle the massive inflows of capital in to the United States during the credit bubble. The result was a global disaster.

In a pointed rebuke to current critics who blame the Fed for the capital flows today, Bernanke refused to blame the foreign investors who poured money into the U.S. during the housing bubble.

Instead, he owned up to his share of responsibility for the disaster: “The primary cause of the breakdown was the poor performance of the financial system and financial regulation in the country receiving the capital inflows, not the inflows themselves.”

The Fed can’t set U.S. policy based on what’s best for others, but it can’t completely ignore the interconnected global economy, either. That’s why international cooperation and coordination is still needed.

But as the current dispute over global imbalances shows, cooperation is easier said than done.


Andy_Jackson_Jihad's picture

Translation:  Fuck yo' couch China, fuck yo' couch!

SheepDog-One's picture

Yea and China will surely just sit there and say 'Oh well, guess we lose'. I dont think so!

Bernanke and this bunch in DC think theyre chess masters but theyre total amateurs taking on those who wrote The Art of War a couple thousand years ago. Anyone thinks China just takes their debt lumps and goes home is full of delusion!

trav7777's picture

Fuckin Art of War LOL.

How many wars has china won again?

SilverRhino's picture

>> taking on those who wrote The Art of War a couple thousand years ago.

And they did jack shit with it, gunpowder and the most bada$$ed navy in the 14th century.   China could have dominated the world 3 different times and did nothing.

Dont be afraid of the inventor, fear the maniac that takes that newfound power and uses it to kill people.

camaro68ss's picture

is the end near?

Fíréan's picture

yes the end is near.

I read this morning a great article posted by John Maudlin,,, called "End game", the most was quoted material from BIS ( bank of international settlements).The wording was strone to say the least, and no holds barred, the end is now ineviable as there are no more viable  options.

jus_lite_reading's picture

Wait! You mean endless printing is NOT a viable option?


sbenard's picture

I noticed the surging 10-year yesterday, and I am still stumped as to why. Except for short-term flight-to-safety, I can't comprehend why anyone would buy U.S. government debt unles they want to throw it away to inflation. Thanks, Tyler, for also noticing and suggesting a possible reason.

SheepDog-One's picture

I dont see how anyone figures stocks, bonds, or anything else backed by Fiatsco currency is any kind of safety at all. May as well say an umbrella in a Cat 5 hurricane is shelter.

StychoKiller's picture

The so-called financial gurus are probably the same Idjuts that said, BUY Real Estate, they're NOT making any more of it!

IQ 145's picture

 Well, let's see; this is supposed to be an investing blog, so maybe someone should say something about investing, instead of what wild-eyed crack brain comment we could make about the end of the world; so here goes; sell this rally in the 10 year. it's a CME contract; sell it short. Why ? because it's a headless chicken logic reaction; this is how you make money in investing, you take advantage of waves of stupidity that move through the world. In 1987 I made enough money buy the dip in Bonds that appeared while the market was crashing on Monday that I could sell the calls on Thursday and spend the whole winter in Mexico on the profits from that one trade; which is what I did.

tmosley's picture

If you want an "investing blog", you should look elsewhere.

poor fella's picture

Well, in my opinion, the 'headless chicken' arguments are those given by bullish clowns on CNBC each and every day... I know plenty of people doing great playing momo and swing, but not one of them thinks this is investing (ask them the company name of the ticker and they have no clue).

The ratchet is clicking each and every day - I for one refuse to buy anything valued so off-kilter as 'this market' which is being bought by people under the influence of said 'waves of stupidity'. There's too many high-speed computers and idiots dinking around within this animal, believing economic synergies exist between this ponzi and Main Street, that the wisest choice is to buy PMs, forget 'em, profit, turn off the t.v., and live your life to the fullest. No grey hairs baby!

Make a phone call to Options Action (or whatever the hell that CNBS show is) next time you want to bounce those wild-eyed crack brained investment ideas.  ;)  

(to be honest, it is interesting seeing what others are doing. You can glean what my plan is obviously)

StychoKiller's picture

No worries, the T-1000 will be happy to tie one trading arm behind its back!  Let's get ready to ruuuummmbbllle!

StychoKiller's picture

You wanna make money (in this case, FRNs) gambling?  Buy a casino!

99er's picture


Yet more upside possible...

Have a great weekend!

AUD's picture

Interest rate volatility. If there's one thing the financial types love it's the ability to 'make out like a bandit' whilst doing absolutely nothing.