Epic Bond Rout Leads To Biggest Weekly Percentage Surge In 5 Year Yield In History

Tyler Durden's picture

As the table below demonstrates, the bond vigilantes are now eviscerating the belly of the US Treasury curve: the weekly percentage move higher in the 5 Year yield is now the largest...Ever. For those wondering if PIIGS should be renamed to PIIS following the brief rescue of G, perhaps it is time to officially rename it PIISA.

The chart below is an archive picture of what one day will be seen as officially ushering in QE 3. As for the naive follow on moves in the equities, it is merely a risk transfer.

As for the statistical evidence, courtesy of John Lohman, it speaks for itself. This week's move wider is the biggest percentage move ever.

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jswede's picture

seriously ZH ?

you don't measure bond moves in yield.  it was a 1.83% sell-off in price.

wow, what a rout.

XPolemic's picture

You do realize that 45 bips over 5 years is 1.24% right?

Or were you joking?


Panafrican Funktron Robot's picture

2 year's been pretty fuggalicious as well.

alexdg's picture

Is Bernankes' oatmeal getting cold again?

Xibalba's picture

Obummer's tryin to win friends on Wall St.  Donations bitchez!

PaperBear's picture

Does this surprise any ZH reader ?

I think not.

slaughterer's picture

We knew this, but it is nice to see it documented for the public.

kito's picture

surprises me. china has come out and stated the will prop up europe and lend to any struggling countries. surely they wouldn't do it to the detriment of the u.s.

phyuckyiu's picture

Paging sheep dog, paging sheep dog, lost sheep on aisle 13, need assistance STAT. Rut Roh.

phyuckyiu's picture

Surely China isn't upset about us blowing up/locking them out of 10 billion plus in investments in Libya they had ongoing. Right?

Jack Mehoff's picture

Just getting started?

wombats's picture

So what does this indicate?  Does it mean that interest rates at banks will go up?  Does it indicate that PM or other commodity prices should go up or down?

1100-TACTICAL-12's picture

the Empire continues to crumble..

lawrence1's picture

It means BPGSFAYC .... buy as much physical gold and silver as you can as fast as you can while its still available at these relatively low prices considering the tsunami of paper flooding the world.


Stax Edwards's picture

It indicates that when the money spigot is turned off, interest rates rise quickly.  The banksters doth protest, turn the printers back on.

Dr. No's picture

Since only the biggest banks in the US control the spigot and since the spigot has been turned down, the banksters you indicate who are protesting, must be banksters outside the circle of trust.  The fat cats control the spigot.  Everyone else is on their own.

youngman's picture

we all knew this...but what we don´t know is how much??? its 29.71% this week...but will it be 297.1% in one month????? That my boys is what makes me drink.....and cry as I watch gold and silver getting hit hard...

PaperBear's picture

Will we see the yield at 10 in short order then QE-steriods ?

slaughterer's picture

"As for the naive follow on moves in the equities, it is merely a risk transfer."

A "risk transfer" that leads to what, exactly?  Please, go a little further...

Bananamerican's picture

hey, don't junk the man for asking questions....

anyone buying equities is a soon to be shorn sheep.

risk transfer=bag holder

Lone Mad Minute Medic's picture

Why isn't TBT surging? Why are the PM's down? We're being bamboooziled! Where is the deer in the headlights? Because that is what is happening to us

lawrence1's picture

You expect rationality in phony markets?  Phony PM paper prices are down, meaning you have yet another chance to exchange failing fait for real money.  Get out of all paper, stop trading, starve the beast and, of course, buy as much PM as you can as fast as you can.

nicktd's picture

Guess china had enough

ssp2s's picture

No problem.  The government's exploding cost of servicing its debt is just offset by all the capital gains taxes from everyone cashing in equities.

Algos DO pay taxes don't they?

Cthonic's picture

Algos DO pay taxes don't they?

On equity capital gains? Not if they are foreign nationals.

firefighter302's picture

ssp2s, you just gave me a "light bulb over head, suddenly illuminating" moment.



PaperBear's picture

Meanwhile paper silver price slides to $33.37/oz.

topcallingtroll's picture

waiting for the 200 dma for a quick trade.

Boston's picture

Oversold, big-time.  Buy it.  

In a few weeks, reality will set in---QE and fiscal austerity will soon begin.  Breakevens will collapse, and so will yields.

It happened in 2010 (remember, yields didn't collapse until about a month after QE1 ended).  The same thing will happen in 2011.

ssp2s's picture

It happened in 2008, and surging yields quickly choked the economy.

Well, by "quickly", a couple of months later.

Chump's picture

I thought the whole point of QE was to keep austerity at bay...How/why would both happen concurrently?

mayhem_korner's picture

Anyone else hear John Williams' Jaws score in the background?




Temporalist's picture

I hear this John Williams:


According to John Williams of Shadow Government Statistics, if the U.S. government used GAAP accounting principles the "real" U.S. government budget deficit each year would be somewhere in the neighborhood of 5 trillion dollars.  Williams believes that the U.S. government is essentially bankrupt and that our current system is not anywhere close to sustainable....

Generally, you'll find that the accounting for unfunded liabilities for Social Security, Medicare and other programs on a net-present-value (NPV) basis indicates total federal debt and obligations of about $75 trillion. That's 15 times the gross domestic product (GDP). The debt and obligations are increasing at a pace of about $5 trillion a year, which is neither sustainable nor containable. If the U.S. was a corporation on a parallel basis, it would be headed into bankruptcy rather quickly."






"John Williams at ShadowStats.com still runs the numbers the way they were in those bygone days. Let’s recalculate…

22.3% unemployment + 11.2% consumer price index = 33.5% misery index

That compares to a peak misery index of 22.0% in June 1980."


n00b tube's picture

Risk transfer out of bonds, into equities?


Misean's picture

I guess THIS is what Bernutty meant by ending inflation in 15 minutes...

Mr Lennon Hendrix's picture

Geithner's replacement is going to have to deal with a sh*tstorm of debt obligations.

Misean's picture

It's baked in. Playing brinksmanship in Warshington with the "debt ceiling" for a few more weeks while they do some maintenance work on the printer arrays. QE3 rolls out shortly after an "agreement" is reached.

The chaos caused by all of this will amplify the inflationary impacts of printing as it becomes impossible for producers of real stuff to plan production with any significant lead time.

narapoiddyslexia's picture

Why does anyone think Geithner is leaving? He's running down the ratlines, folks, ahead of the pack.

11b40's picture

He is not going anywhere.  Just another in a long line of rumors, with many more to come, I'm sure.

No way Obummer puts up a new T.Sec. for Senate confirmation between now and the election.  Period, end of story.  Timmy could be caught naked in bed with 2 sheep and doberman & would still stay on through 2012.

narapoiddyslexia's picture

No doubt the sheep and Doberman would recant after it was revealed they'd rec'd $100k each from a drug dealer.

Richard Chesler's picture

He has direct orders from Goldman NOT to speak to hotel maids.

Kayman's picture

Do you actually think there are a couple of sheep or a Doberman that would stoop so low ?