• Are Treasuries The Last Diversifier Left?
    Leo Kolivakis
    07/30/2010 - 17:29
    In the first quarter, the US economy grew by 3.7%, revised up from an originally reported 2.7% increase. But growth estimates all the way back to the start of 2007 were revised lower. Moreover, the level of real GDP in Q1 was revised down by $100 billion. Does this mean the secular bull market in bonds will continue? And are Treasuries the "last diversifier left"?
  • Japan: Land of the Rising Debt
    Vitaliy Katsenelson
    07/30/2010 - 13:51
    The Japanese economy operates on the assumption, soon to be proved false, that the government will always be able to borrow at low interest rates. As internal demand evaporates, the government will have to start hawking its debt outside Japan — in a more realistic world, where interest rates are a lot higher.
  • An Open Letter to President Obama
    Phoenix Capital Research
    07/30/2010 - 09:55
    Dear Mr. President, You don’t know me, but I was one of the millions of Americans who voted for you in the last election. I have since been fairly critical of your Presidency largely because I, like many others, feel betrayed by the policies you have enacted upon winning said election.

Another Record: Treasury-Mortgage Spread Just Took Out 60 bps Support

Tyler Durden's picture
Submitted by Tyler Durden on 03/10/2010 16:00 -0500



The 10 Year Treasury To Mortgage spread just broke the 60 bps barrier, and is now trading at a record tight 59.61 bps, after dropping as low as 58 bps earlier. Is the Fed now launching a short squeeze in MBS as well? Pretty soon Mortgages will be trading at negative rates, when the Fed realizes that the only way to get house prices higher is to pay Americans to take out a mortgage.

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by AR15AU
on Wed, 03/10/2010 - 16:04
#260974

SRS is feelin the pain... 

by HelluvaEngineer
on Wed, 03/10/2010 - 16:07
#260985

Gotta get everyone out by April 30 to spend those ObamaBux.  Anyone think this administration has a plan that goes past this spring?

by Whizbang
on Wed, 03/10/2010 - 16:13
#261001

They are posting flyers all around D.C. for a huge healthcare rally in june. So yes, they are planning that. Interesting to see that this push in march is all facade.

by Postal
on Wed, 03/10/2010 - 17:11
#261073

Wait... How can we afford more gov't run health-care? I thought we were broke as-is.

by BlackBeard
on Wed, 03/10/2010 - 16:09
#260989

Monster sized musical chairs bitches.  Just make sure you don't sit down on a stiff hard one when the music stops!

by Hondo
on Wed, 03/10/2010 - 16:10
#260992

Why would anyone "invest" in these government manipulated markets?

 

 

by Anonymous
on Wed, 03/10/2010 - 21:00
#261281

There are no more "investors", only traders... or is it "traitors"?

by merehuman
on Wed, 03/10/2010 - 16:12
#260999

Thank you for stating the obvious!

by assumptionblindness
on Wed, 03/10/2010 - 16:15
#261005

And they have accomplished this between the expiration of QE1 and in the face of the expiration of continued MBS purchases in 3 weeks...amazing!  I completely underestimated the power of the PPT to orchestrate such a lopsided win by the home team. 

Larry Summers is chewing on a cigar right now in a meeting with Ben Bernanke saying; "I love it when a plan comes together."

by gunsmoke011
on Wed, 03/10/2010 - 16:20
#261009

Just when you thought it couldn't get any more Bizzare. Hell - I am about to come around to the idea that this time IS Different - and we can be trading DOW 30,000 with 15% Unemployment and an Insolvent Banking System.

by deadhead
on Wed, 03/10/2010 - 17:07
#261067

i know you are likely being sarcastic, but it is NEVER different. NEVER.  there are variations naturally, but this has all happened before.

the variation we have this time is a major banking crises (similar to Great Depress.) that is more global and interconnected than in the 30s.  this is combined with historical debt levels on the corp and consumer side and historically high levels of federal gov't debt.  several of the US States are flat out broke.  unlike Great Depress., we now have a credit based economy, which is contracting.  housing is a historical high of GDP and I think it represents ~20% of GDP (could be wrong, someone correct me please) and it is shot and my read of the numbers is that it is getting worse.  i could go on but you have heard it before.....just a matter of time.

by Miles Kendig
on Wed, 03/10/2010 - 17:28
#261092

DH - For a historical from recent history I look to the collapse that kicked in 1869 with the epic gold collapse via President Grant battering Jay Gould, really caught on with the collapse of an epic real estate bubble, this time in Europe leading to the calling in of notes taking out  Jay Cooke & Co in 1873.

by deadhead
on Wed, 03/10/2010 - 20:22
#261256

thanks miles.....i admit to forgetting all about that one.  I did recently read "this time is different" which is a nice piece of some economic history.  worth the read.

by Miles Kendig
on Wed, 03/10/2010 - 21:09
#261294

No doubt.  It was one of my gifts to an esteemed economist from the Berkeley mafia of my acquaintance this past year. :-)

by Ripped Chunk
on Wed, 03/10/2010 - 16:21
#261012

Sign me up

by bugs_
on Wed, 03/10/2010 - 16:26
#261021

As the russian agents on South Park said

"I want to get paid before I die!"

by BlackBeard
on Wed, 03/10/2010 - 16:33
#261033

Fuck! I want to borrow @ these rates TOOOO!!  I wanna borrow a gajjilion dollars!

by AR15AU
on Wed, 03/10/2010 - 16:47
#261045

Psst...  hey kid...  wanna buy a mall?

by Anonymous
on Wed, 03/10/2010 - 16:47
#261046

3 words:

"Fuck the Fed"

by ghostfaceinvestah
on Wed, 03/10/2010 - 16:50
#261051

TD, this is basically the equivalent of Brewster's Millions - the Fed has said they are going to spend $1.25T total by March 31st.  So they are going to spend $1.25T total by March 31st, supply/demand be damned.  Supply is really light, being the first of the year and all, but the fed is buying anyway.

The snap back in spreads is going to be violent when the Fed steps out.

by deadhead
on Wed, 03/10/2010 - 20:24
#261258

ghost.....any guess as to 30 yr fixed?

 

by ghostfaceinvestah
on Wed, 03/10/2010 - 21:38
#261330

The spread will go out to at least 150bps in short order, not easy to say what will happen to treasuries, should be dragged up via servicer selling.

by Anonymous
on Wed, 03/10/2010 - 22:02
#261366

There will be no snap back. Look at the UK and the end of their QE experiment.

by Miles Kendig
on Wed, 03/10/2010 - 17:10
#261071

...when the Fed realizes that the only way to get house prices higher is to pay Americans to take out a mortgage.

I thought this is how we got to this position in the first place.

by Postal
on Wed, 03/10/2010 - 17:13
#261076

I can't afford to buy RE. Artificially high prices have priced me out of the market. The only way I could ever hope to get in is if the prices are allowed to fall to reasonable levels.

by ghostfaceinvestah
on Wed, 03/10/2010 - 17:48
#261134

They will, just be patient.  It make take several more years, but it will happen.  We could see 5% house price declines per year for the next several years.

by Postal
on Wed, 03/10/2010 - 17:59
#261146

Thx. I'm really not in any hurry, it's just annoying to hear pols chanting, "Buy, buy, buy!" and my only response is, "With what?"

Of course, "overpriced" is relative, I suppose. If I had more disposable income and fewer other debts, then RE prices would be more managable. If only. :)

by viahj
on Wed, 03/10/2010 - 18:50
#261194

I expect local property taxes to explode starting this year in order to incorporate into 2011 budgets.  I almost feel sorry for those who took the tax credit and put zero down on a US Taxpayer backed FHA loan at historical, manipulated low interest rates.  Values are still falling which lowers tax revenue on current tables which will also spur tax increases, the likes most have never seen or will be able to afford. 

by ghostfaceinvestah
on Wed, 03/10/2010 - 21:36
#261326

i feel even more sorry for those who put their own equity into real estate.  At least with a 3.5% down FHA mortgage you don't have much to lose.

by deadhead
on Wed, 03/10/2010 - 20:25
#261259

agreed that it will definitely take several years for this to play out to a bottom.

by Anonymous
on Wed, 03/10/2010 - 17:38
#261118

Benny and the Inkjets are about to learn what extension risk is all about.

by Postal
on Wed, 03/10/2010 - 21:02
#261284

Benny and the Inkjets

LMAO!!! Now that is funny! Probably better than "Intellectually subprime."

by Anonymous
on Wed, 03/10/2010 - 18:01
#261151

...when the Fed realizes that the only way to get house prices higher is to pay Americans to take out a mortgage.

The second way is to tear down every vacant home.

That signals the end.

by viahj
on Wed, 03/10/2010 - 18:52
#261197

so, invest in demolition companies?  imagine when China gets to our RE position in a couple years....that's a lot of demolition.

by Anonymous
on Wed, 03/10/2010 - 22:29
#261387

No way, haven't you heard Buffett says housing will be fixed in 2011!

by Anonymous
on Wed, 03/10/2010 - 18:05
#261156

Home prices will not go up for at least 5 years. Enjoy renting until then.

1) Employment will be soft for years with wages flat.

2) Real mortgage rates do not reflect likely default rates.

3) The next wave of Alt-A, Prime defaults have not hit.

Nobody is planning for an unexpected event in the economy.
They always happen when we least expect them.

by Postal
on Wed, 03/10/2010 - 21:04
#261288

Hmm... new word: "Planning." Gonna have to look into this.

by Anonymous
on Wed, 03/10/2010 - 21:07
#261292

I've received a couple of prospect calls for point of sale systems for restaurants that will be opening!
Pollyanna's!

by Anonymous
on Wed, 03/10/2010 - 21:12
#261301

Bill Bonner at the Daily Reckoning has a great piece to read!

http://dailyreckoning.com/private-sector-de-leveraging-a-rally-in-a-bull-costume/

by mark456
on Thu, 04/15/2010 - 08:38
#301819

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