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Guest Post: The Bond Bust Has Begun
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Pity half of you won't make it - Jay Z
that is still a very healthy chart. Nothing to see here yet. Move along! However there are some troubling signals.
Almost the last sentence:
"Speaking of the secular bear, it is for this reason that my longer-term target for the S&P remains 425 and my investment view bearish."
Guess I'll keep my precious metals and positions.
For gold and silver, 1400 and 30 are key levels. There seem a lot of options were written on these key levels. So I expect there will be a lot of fight in the coming 2 weeks
..and we'll see who shakes the pinball machine better to their favor..
great market we got
Levering up to your eyeballs on a fixed rate mortgage - like three months ago - could turn out to be the best trade of your life. Especially if can you pair it with (variable rate) rental income on same.
It's very possible you are correct. Often it is the rigid and the virtuous who lose out in transitions when the rules change.
BD Jr,
"OFTEN",
How about always.
Play the game by the rules, and you lose in THIS arena 100% of the time.
Anyone with ANY FRN's, in IRA's, and 401k's, had best get them out of CONUS.( move em' or lose em')
Time is growing VERY short.
In Weimar during the hyperinflation, you could get an entire city block of aparments for 25 oz of gold.
I don't believe that a house is a good inflation hedge for a number of reasons.
1. In a currency collapse, what makes you think that your debt won't be revalued into the next currency? Remember that inflation is for the banks and gov, not you.
2. Owning a home waves a flag that says "tax me".
3. The housing market is still overpriced.
4. And this is a big one... Many of the houses in the US are going to turn into ghettos and get bull-dozed. All those track homes, miles away from work that were built too big, aren't going to be affordable to heat, maintain, or commute to and from for all the Americans who will soon be riding bicycles as a primary means of transportation.
If you were really smart, you would have gotten a Home Equity loan, Pre Approved @ 80% of the value of your home.
Guaranteed for x rate for 7yrs.And not USED it.
If the wind up starts, and I see no way out, I might just take that 80% and buy PM's, and let em have my paid for pad.
Win/Win.
Feds ZERO
425 in 2010 dollars. That would be 1200 in 2011 dollars!
A good point was made in the report, the sovereign debt crisis in Europe was like a test run for the real thing. It is likely the Elite will do more and more of this, to help in their own 'analyses'. How will people react to an end to unemployment benefits?
"I don't know, lets see how students in Britain react to 200% tuition hikes, and make a computer model based on that."
So basically, expect small scale food riots, election rigging, martial law, military as law enforcement, stock crashes and rallys, mini dollar crashes, and so on. Afterwards will come the full-scale 'tests'.
http://psychonews.site90.net
PsychoNews: Exposing the Oligarchy, one psycho at a time.
So you are predicting volatility! A trader thrives on that. Prays for that actually.
An inside trader loves it even more. I imagine some of these people get phone calls in the morning when they are about to put a dump on silver and gold, you know, so every one "in the club" can get in on the act!
An end to unemployment benefits? Probably not in my life. The new welfare/entitlement program
You forgot the hoards fleeing over the border. Not sure which way at the moment.
10Y Note
http://99ercharts.blogspot.com/2010/12/10y_8197.html
http://www.zerohedge.com/forum/99er-charts
Have a great weekend!
There are an epic amount of crucial levels!
ot sorry but, WTF was that at the wh today?!? desperation time!
i cannot believe that ! complete none-sense! im for once utterly speechless. eugene robinson is fellator extrodinaire. guess not that speechless. bill clinton is criminal and should stfu, and now we seethe one party monster in full bloom! on national tv from the white house, a fucking JOKE of a tragedyof a joke played in our faces by these fucking bastards. bernie sanders broke my heart today, for an old man to do what he did with the energy and verve he did it, i could not have done it, the man was inspiring.
http://www.youtube.com/watch?v=2q495K2aEN0
Thieves, thieves and liars, murderers
Hypocrites and bastards and lechers
"Get up! Get up, get on your feet!"
Hey, thanks for nothing
Morals in the dust
Two-faced intellectual cripples
No trust
"We are all fighting for a new race of man
Not the race of these pigs
And their racist society"
Take off!
Thieves! Liars! [x6]
Inside, outside, which side we don't know
My side, your side, their side, we don't know
Who started it? Who started it?
Who started abandoning abolishing hate?
Who started it? Who started it?
Who started affecting freedom?
Inside, outside, which side we don't know
My side, your side, their side, we don't know
You're like a great big fucking cock
Just waiting to get squeezed
"We're gonna rip this mother fucker off
We're gonna tear this mother fucker down"
"Get up! Get up, get on your feet!"
Breathe! Forfeit erection!
Toxic our injection
Geriatric fuck-fest
With a scintillating lie
"I hope they realize this is their last goddamn chance!"
"Kill him!" "Kill, kill, kill ..."
Take off!
Thieves! Liars! [x4]
Inside, outside, which side we don't know
My side, your side, their side, we don't know
Who started it? Who started it?
Who started the fight between color and hate?
Who started it? Who started it?
Who started affecting freedom?
Inside, outside, which side we don't know
My side, your side, their side, don't wanna know
You're like a really big hit of acid just waiting to be taken
"Power to the people!" "Sieg heil!"
"Power to the people!" "Police officer!"
"Kill, kill, kill ..." "You will not kill!"
"I like peace, you want peace"
"I can't hear you, I still can't hear you!"
gangland why are you on zero hedge? Do you feel alienated and believe that your lack of success in your life is due to the evil rich? Do you like the slightly anarchist, libertarian, and apocalyptic doom and gloom we sometimes hear? Does it fit with your world view? Do you seek out sites that confirm your beliefs? Confirmation bias is a sin you know. You will fry in hell for that.
I'm calling bull shit on this. We've seen the bonds drop and yields rise before in the last two years. They rise and then drop when BB feels it's needed. I see no difference here. Sales are still drawing buyers. This time is no different. Ramping markets until christmas. I'm taking bets that just after the holidays, there will be some "reason" that buyers flock back to bonds. Haven't we all seen this play before?
Be careful. I tend to agree with you. there is a natural floor on bond prices, particularly when the conservative loss averse types are scared. However there is not as much control of the economy by the evil rich and their minions as some people on zero hedge would like to believe. However I tend to agree with you. Expect a counter trend rally about mid January?
How did you get the idea that there is a natural floor on bond prices? When inflation gets rampant, those conservative loss averse types will dump bonds as fast as they can.
Let's just see what happens over the next six months. Even Keynes who is considered the devil on zero hedge mentioned that the masses are fooled by nominal returns, and a hedonic adjusted cpi doesn't hurt!
I tend to agree. The current yield rise might have something to do with the year-end profit taking. But it will be dangerous to think next year investors will come back and bonds will enjoy another bull market. If that's the case every year, the bond market will never go down. However, just go and look the bear market in the 70s.
yes next year is dangerous for sure. I'm not expecting another bull market. I just hope the drop in bond prices is slow enough that the economy gets chugging along first. All of us should hope for that actually. No one wants to live in a crack up boom or a deflationary depression.
Good luck with that. If you think this ends with a 50 percent reduction in consumption of manufactured goods then you aren't going to like what happens next year.
Speak for yourself. SOME of us realize it is the only FIX left.
I am contemplating dipping my toe in the 3 year at l5%
Geriatric fuck-fest
With a scintillating lie
Trout, incidentally, had written a book about a money tree. It had twenty-dollar bills for leaves. Its flowers were government bonds. Its fruit was diamonds. It attracted human beings who killed each other around the roots and made very good fertilizer.
The Big Board . . .
It was about an Earthling man and woman who were kidnapped by extra-terrestrials. They were put on display in a zoo on a planet called Zircon-212. These fictitious people in the zoo had a big board supposedly showing stock market quotations and comodity prices along one wall of their habitat, and a news ticker, and a telephone that was supposedly connected to a brokerage on Earth. The creatures on Zircon-212 told their captives that they had invested a million dollars for them back on Earth, and that it was up to the captives to manage it so that they would be fabulously wealthy when they were returned to Earth. The telephone and the big board and the ticker were all fakes, of course. They were simply stimulants to make the Earthlings perform vividly for the crowds at the zoo--to make them jump up and down and cheer, or gloat, or sulk, or tear their hair, to be scared shitless or to feel as contented as babies in their mothers' arms. The Earthlings did very well on paper. That was part of the rigging, of course. And religion got mixed up in it, too. The news ticker reminded them that the President of the United States had declared National Prayer Week, and that everybody should pray. The Earthlings had had a bad week on the market before that. They had lost a small fortune in olive oil futures. So they gave praying a whirl. It worked.
Olive oil went up.
Keep fucking that chicken...
Interesting comment. You are not a trader or an investor are you? I'm going to fuck that chicken until it falls apart. What else can I do?
At the end of boot camp, my drill instructor said:
"You guys are going to fuck anything with two legs. Except a chicken."
I guess the bar has fallen.
Parris Island, bitchez!
Oo-rah! Mine said, "Don't you worry boy, when you go home on your first leave, you're gonna find your girlfriend just like you left her. Freshly fucked!"
I will fuck anything for a ten percent real return over ten years.
Looking for reality in unreal market(s)...interesting.
Excellent review. And I thought they were turing into euphoric bulls until I saw the "long term picture". Spoos 435... Gulp.
Keeping a small bond position keying higher interest rates, miners, physical gold and silver, a little DIG and no shorts. It has been so long since I shorted may have to ask Tyler how to do it. Probably hold up into next year.
I do find it troubling that it is going to take at least another year before it all blows up.
Nice weekend all.
If you want to just short sectors that is easy with etfs. You can even de facto use margin even without qualifying for a margin account by using the 2x and 3x short etfs. I got burned double shorting gold a while back. Took my losses and repositioned. I am short again.
The reason interest rates are going up is that the market is now aware that there will be $70 trillion of bailouts. So why not charge higher interest, knowing you will get it?
Silver, which has outperformed every asset, levels out, and the tops in. Yeah right. Look at Treasuries! Why are they doing poorer? The bull says, 'Because the dollar is stronger. Dollar strength.' Yeah right, the dollar has its first good week of the year vs gold and the tops in on gold. Look at Treasuries, canary in the coal mine. Why didn't the PDs come in and sweep more under the rug? Because even they are done with it. Plan B here it comes; what they gonna do when the well runs dry?
what is plan b in your opinion? I may lose this bet but I think gold and silver are at intermediate tops and I am hoping to come back in at a lower price. I'm looking at 24 on silver. I'm probably wrong on this one.
Plan be is to continue to monetize/sell bonds (to themselves) as rates rise, take the loss, discount the dollar, and pray the bottom doesn't drop out.
that's what I thought. I am assuming that the chinese will learn to play nice and cooperate so the bottom doesn't drop out. They have more to lose than us. Every big player has a lot to lose by failing to pay tribute to the hegemon. that's why I think we can get away with it until the economy sputters back to life. We really should be praying hard for some inflation and hope that there are bond martyrs out there willing to take a bullet for the rest of us.
No they have nothing to lose. It's already lost.
They just would rather pretend that we aren't screaming this shit is OVER in their face.
A debt saturated economy doesn't sputter back to life.
Especially when oil is going to $100.
Yep, you are off by about $4, though I would love to see silver at $24. It would last maybe a day. Silver is ready to break out to $32 by the end of February, likely sooner. Too much demand, and most of it for physical, of which there are already reported shortages.
Good luck, but tis the season to be buying silver.
This may very well be a trend reversal. However even if a new trend is established there will be times that try men's souls and will shake out even the most hardened short. I don't see how people short or use margin unless they are always watching the ticker. That's what I have to do. And have a hair trigger. However there is a silver lining here. Bond prices naturally start going down when the economy picks up. Even if it is sunshine all the way from here on out there will be several scares along the way, and most people will get stopped out a few times if they are lucky, and lose a big bundle if they are stubborn.
I AM BIGGUS DICKUS (but they call me junior). My wife is back home and she says I have to quit playing for now. Wank you later.
yes on the silver lining.
junior dick sucker,
gangland is one the personalities I choose to split here on zh. yes, cognitive bias is what I go for....and...your point is: that 'hedonistic' dildo up your fat ass don't make you sore so much, right? they have creams for that you know, quoting keyenes out of context I mean, keep smiling ; )
> gangland is one the personalities I choose to split here on zh.
Oh, shit. I hope the other few aren't as worthless.
Love the name, Abigail Doolittle. Almost as lovely as Holly Golightly.
Anyway, the charts are legit, but interpretation is a little premature imho. Many thanks.
...I had quite a good time 'governing'
It's scary how much dumb money is in this. I recommend just buying land or farm land, but just land.
Question.
My TIAA-CREF account gives very few options www.tiaa-cref.org
I am averse to equties and was thinking gold...but thats not an option,..so am have been going long TIPS.
That said,...TIPS have gotten massacred in the bond market implosion.
Anyone with reasonable advice based on limited choices?
Cash ? ?
Pull your money out and take the tax penalties. Then buy physical silver, freeze dried food and farmland.
lol. thx spinone.
actually, I am managing a family members money and that is not an option [although I agree]. No way am I going to be allowed to liquidate the account.
Assume that I can only allocate based on the options presented.
I was only half serious. Looks like you are limited to picking up dimes in front of a steamroller.
Then money market is your least bad option IMHO. Let's hope Mish is right again and that the dollar will still have some value a couple of years from now. Being the reserve currency does seem to give the greenback an almost Wolverine-like a ability to take a beating! I'm guessing the yen is the major currency with a glass jaw.
There was a story about TIAA-CREF buying farmland a couple of months ago: http://www.zerohedge.com/article/tiaa-cref-investing-farmland-harbinger-...
Not sure when/if TIAA-CREF will let you put your family member's 403b (or whatever) savings into a slice of farmland. If they do, I'd say it'll replace money market as their least bad option.
Buy CEF, GTU, monsanto, ADM. Don't use leveraged plays or options.
Hundreds of billions a year are handed to pension managers. What are they to do with the money? Property? Stocks? Bonds? Take your pick. Which will it be?
Still do not get it huh?.
They will get it seized from them, and the Fed will use it to monetize the Bond/Treasury mkts.
Private individual funds, are going to be STOLEN, and these poor fools will get a Gv't guarantee of 2-3% return,until implosion, say end of 2012.
yeah, am wondering how soon (besides right now) I need to worry about forced allocation of my self-managed IRA? Have 401(k) that I plan to roll into IRA April 30, 2011..... unrelated paranoia: how safe is safe box at credit union vs. bank?
Better, but locket closet with tamper proof lock is much better. My advice to friends over the past two years has been cash, gold, silver, land, tools of trades. All except the last two can be easily locked away in one's home. Tell nobody, trust nobody.
What people fail to realize is that any anemic recovery is being promoted, funded as all the rest have been....with debt that can't be repaid.