Ben Loses The Long End

Tyler Durden's picture

Today's NFP data has sent the treasury complex in a tizzy: the 30 year has now lost its support levels and the yield is up 6 basis point to 4.72%. And since this move would have been expected in the case of a huge NFP beat ('economy improving' rhetoric), but not on today's atrocious result (and if the BLS needs the services of snowy apologists, like DB'a LaVorgna whose only job lately is to explain why economic data are subpar due to the motion of celestial bodies, perhaps it needs to refine its seasonal adjustment to account for snowfall in, gasp, winter), this is merely yet another indication that the long-end vigilantes are once again making a push for an outright QE3 announcement, a development which was predicted by Zero Hedge at the time QE2 was launched.

Below one can see the massacre in the long-end ever since the launch of QE2.

The 2s10s are about to take out highs.

And the only winner is...

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franzpick's picture

I'll venture Shumway would have outperformed this year using TBT and short long bond strategies;  5, 10 and 30 year bond yields today jumping to 8-9 month highs, with the 30 year challenging 5 year support, and below that, par.  Get ready Ben, your "100% confidence" game is falling apart.

nope-1004's picture

But, but....

He said he can turn it around in 15 minutes?

But he also said that rising prices in food staples were a result of "more sophisticated diets".  Watching starving people line up for food somehow leads me to think that sophistication is quite far down the list.

Yes, get ready Gen Ben.  Your idiot banner is being made now.... somewhere offshore no doubt.


Quinvarius's picture

Eating raw corn and wheat is all the rage at Martha's Vineyard.  No more slicked back hair, long thin cigarettes, and small sandwiches.  The sophisticated are now all about munching the raw grains.

william the bastard's picture

Have the resupply boats been embargoed?

franzpick's picture

Maybe Sarah is right:  If you can't pick it, or shoot it, don't eat it

economessed's picture

Franzpick, Sarah Jessica Parker got the saying wrong.  It goes:  if you can't drink it, drive it, or take it to bed, it's not worth having.

snowball777's picture

Curiously, despite all that fiber, they're still completely full of shit.

B9K9's picture

In war, truth is the first casualty. Aeschylus

Reacting to lies spewed by the minions of the Evil Empire is like falling for a pseudo-troll like Hamy.

All you need to do is remind yourself as to the true extent of the situation we collectively find ourselves. If you believe humanity is actually fighting a shadow war against an array of powerful enemies, then everything becomes perfectly clear.

TruthInSunshine's picture

Dire warning directed squarely at Bernanke, from the mouth of Richard Fisher, President of Dallas Federal Reserve Branch in Dallas and FOMC Member:

“The new Congress and the new staff in the White House have their work cut out for them. You cannot overstate the gravity of their duty on the economic front. Over the years, their predecessors — Republicans and Democrats together — have dug a fiscal sinkhole so deep and so wide that, left unrepaired, it will swallow up the economic future of our children, our grandchildren and their children. They must now engineer a way out of that frightful predicament without thwarting the nascent economic recovery.

“I have been outspoken about the limits of monetary policy as a salve for the nation’s fiscal pathology. The Fed has done much, in my words, to provide the bridge financing until the new Congress gets to work restructuring the tax and regulatory incentives American businesses need to confidently expand their payrolls and capital expenditures here at home.

“The Federal Reserve has held rates to nil. We have expanded our balance sheet to unprecedented levels. After much debate — which included strong concern expressed by one member with a formal vote and others, like me, who did not have voting rights in 2010 — the FOMC collectively decided in November to temporarily undertake a program to purchase U.S. Treasuries that, when added to previous policy initiatives, roughly means we are purchasing the equivalent of all newly issued Treasury debt through June.

“By this action, we have run the risk of being viewed as an accomplice to Congress’ fiscal nonfeasance. To avoid that perception, we must vigilantly protect the integrity of our delicate franchise. There are limits to what we can do on the monetary front to provide the bridge financing to fiscal sanity. Last Friday, speaking in Germany, [European Central Bank President] Jean-Claude Trichet said it best: ‘Monetary policy responsibility cannot substitute for government irresponsibility.’

“The entire FOMC knows the history and the ruinous fate that is meted out to countries whose central banks take to regularly monetizing government debt. Barring some unexpected shock to the economy or financial system, I think we have reached our limit. I would be wary of further expanding our balance sheet. But here is the essential fact I want to emphasize today: The Fed could not monetize the debt if the debt were not being created by Congress in the first place.

“Those lawmakers who advocate ‘Ending the Fed’ might better turn their considerable talents toward ending the fiscal debacle that has for too long run amuck within their own house. The Fed does not create government debt; fiscal authorities do. Deficits and the unfunded liabilities of Medicare and Social Security are not created by the Federal Reserve; they are the legacy of those who control the purse strings — the Congress, working with the president. The Fed does not earmark taxpayer money for pet projects in local communities that taxpayers themselves would never countenance; only the Congress does that. The Congress and administration play the dominant role in creating the regulatory environment that incentivizes or discourages job creation.

“… A reader of Shakespeare will recall the dialogue between Glendower and Hotspur in Henry IV. Glendower claims, ‘I can call spirits from the vasty deep.’ And Hotspur replies, ‘Why, so can I, or so can any man; But will they come when you do call for them?’

“We shall see if the new Congress will prove worthy of the power the American people have ‘loaned’ them, and, together with the president, actually draw the spirits of fiscal reform and sanity from the ‘vasty deep’ to at long last implement meaningful fiscal and regulatory policy that incentivizes private-sector job creation here at home while arresting the hemorrhaging of our Treasury. If they do, then more Americans will find work and be better off, better paid, and freer to make their own decisions about the economy.

“If they don’t, then woe to our children, their children, and the American Dream.”

Cindy_Dies_In_The_End's picture

He's just as disingenous as the rest of them, he pays lip service, then acts right in line with his masters.



spekulatn's picture

Get ready Ben, your "100% confidence" game is falling apart.


Well said franzpick.

Jay Gould Esq.'s picture

LaVorgna is the Knucklehead Smiff to Liesman's Paul Winchell. Yet another monetary policy apologist.

plocequ1's picture

Does this mean no POMO?

redpill's picture

no mo pomo? say it ain't so joe!

Urban Roman's picture

just when we were getting used to the pomo mo-mo

plocequ1's picture

When i see it, I will believe it

Cocomaan's picture

Guess we need that 100 year bond so we can start the interest rate march all over again.

franzpick's picture

Any such 100 year bond will some day trade below 50, or does everyone want the under ?  I traded 30 year futures back in '81 below 57, and it can happen again.

Cursive's picture

Remember the British Consuls!

IQ 145's picture

 I love your screen name. One of my life-time favorite quotes is from Franz Pick; ":Bonds are instruments of guaranteed confistication". The issuing agent will never, never, return to you your purchasing power; never. There's no reason whythey should, and they will not do it. It's absolutely imperative that American Citizens begin thinking in terms of purchasing power; there is no unit of account; no unit of money. Such a thing does not exist. To make calculations in terms of "dollars" is the most egregious folly.

EscapeKey's picture

Personally, I'm waiting for a 5,000 year bond. All this nonsense about civilizations falling... won't ever happen in the US.

cxl9's picture

The British government issued perpetual bonds in 1751 which are still paying coupon today.

IQ 145's picture

 Please, please, think. use your brain, do your homework. the "coupon" payment today on a bond that represented several years of wages for a skilled worker when it was issued is sufficient to buy a hamburger. The subject under discussion here is inflation. Please engage brain.

Caviar Emptor's picture

It's all in the packaging. Along with the 'Century of Golden Progress' Bond you get some real estate in Michigan. 

Uncle Sugar's picture

I'm thinking a zero coupon 100 year bond would work. Then they could boost the inheritance tax to recoup and interest paid to heirs.

JasperNewtonDaniel's picture

Welcome to QEternity, where there is no timeline long enough to see Ben's madness drop to zero. 

william the bastard's picture

A double bind is an emotionally distressing dilemma in communication in which an individual (or group) receives two or more conflicting messages, in which one message negates the other. This creates a situation in which a successful response to one message results in a failed response to the other (and vice versa), so that the person will be automatically wrong regardless of response. The double bind occurs when the person cannot confront the inherent dilemma, and therefore cannot resolve it or opt out of the situation. For example, if your employer tells you to do a job but doesn't allow enough time for you to do it and you are in danger of losing your job if you question the situation you are in a double bind.

New_Meat's picture

" that the person will be automatically wrong regardless of response."

Oh, like being a husband?

umop episdn's picture

I love the smell of burning bankster paper.

MsCreant's picture

Removed because it was in bad taste.

Hephasteus's picture

You are so awesome MsCreant. You know when it's time to bring the mean and when it's time to stand down.

Temporalist's picture

The Bernank didn't lose!  The Bernank never loses!  If the yield is up there is recovery; if yield is down that is what they wanted. 

TrihumpTheInsultDog's picture

Don't worry, with crude at about $100/b it won't be long before that money needs a home on the long end of town.

Part of the plan.

The facebook investments go to the Chinese communist party leaders so they don't engage in selling. The gas tax goes to the towelheads so they do engage in buying.

SpeakerFTD's picture

Dear Ben,

You can either save the bond market or the stock market, but not both.  

Your choice, mate.


The Market


<Irwin M. Fletcher, you choose.....And I lost again.>

Boston's picture


It would be interesting to compare the total losses in US Treasury and Agency paper since the sell-off began in early November vs. the US equity market gains over the same time period.


thepigman's picture

Ben can't hold the long end of his

fraud down. The wizard has no clothes.

A Man without Qualities's picture

He's given birth to a monster, turned the laws of the markets on their head.  Weak data  causes commodities to rally, equities to follow and bonds to sell off, in expectation of more free money.  Big corporations have zero incentive to hire domestically, sensible investment choices are rendered meaningless.  What a fucking mess.

thepigman's picture

Interesting, eh? It's all bullshit

and the only reality is QE handouts.

FunkyMonkeyBoy's picture

"Order out of Chaos"

- The New World Order

aerojet's picture

He was supposed to bring balance to the force, not destroy it!

Sudden Debt's picture

And as expected, the market will go down soon untill they get what they want.

The dow will go red today and the next 2 to 3 weeks will start to get bloody for the braves that went long.

CrashisOptimistic's picture

I am certainly confused about the unemployment report.

Are there demographics built in?  The baby boom is retiring.  Would that not shrink the total of those looking for work?

EscapeKey's picture

How would that be a good thing? That would put a substantial extra burden put on Medicare/aid + SS.

CrashisOptimistic's picture

It's not good vs bad.  It's why?  Why is the workforce shrinking as population rises?  Answer: Retirees?