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Long Bond Futures Down

Tyler Durden's picture


Wait, what is this? Selling in both ES and bonds? Surely you jest: after all money just goes from one to the other right? Guess not.


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Wed, 07/13/2011 - 18:50 | 1453997 Gubbmint Cheese
Gubbmint Cheese's picture

this is bullish for equities...



Wed, 07/13/2011 - 18:54 | 1454010 camaro68ss
camaro68ss's picture

its Transitory BITCHEZ

Wed, 07/13/2011 - 19:30 | 1454125 knukles
knukles's picture

Fellers, lets not forget a small reality that seems no-body's addressed, as of yet.

But it will be bigger than a shrug.

Many state and local deposit accounts at commercial banks Must By Law be secured/collateralized with AAA rated paper.  Some guidelines simply say AAA, some direct obligations of the US Treasury and it's federally chartered agencies...yadda, etc, adhoc, vootie, BurmaShave...

But, many do say just plain and simple, AAA

Now, lemme see here.  If Treasury goes to less than AAA, so to does every other piece of paper guaranteed by Treasury/US gubamint.  GNMA. AAA get the picture.

Money Market Mutual Funds.  Similar plights of antsy in some circumstances, depending upon the way the guidelines are written.

Repo collateral..... see investment guidelines, and what about overcollateralization levels?

NAIC reg bounded insurance companies.  There go the capital haircuts!
Oppppps same with the banks, eh?

So, aside from the political side-shows, there are indeed some real and salient ramifications with respect to simply, a downgrade, even if there is no payment lapse.
And that's possible my little reptilian friends, for the AAA designation assumes payment in full on a timely basis.  The difference between AAA and AA, for example is predicated upon the Probability/Possibility of a deferral/missed payment.

Groan away, folks.  If the downgrades happen, there'll be some market disturbances, mostly unseen to the common folk, but a shift in the composition of the playing field, including increased market segmentation....

Wed, 07/13/2011 - 19:55 | 1454244 Bastiat
Bastiat's picture

You got it--but I disagree that they will be "mostly unseen" disturbances.  It would be catastrophic.  There is no place for that money to go: literally. 

Wed, 07/13/2011 - 22:14 | 1454719 DoChenRollingBearing
DoChenRollingBearing's picture

Bastiat!  You surprised me!

It could go to physical gold.  Then we head to $55,000...

Thu, 07/14/2011 - 00:34 | 1455053 Harlequin001
Harlequin001's picture

It will go to cash first, these institutions can't exist if everyone is invested in gold. They can't make a margin...

Thu, 07/14/2011 - 01:18 | 1455102 RockyRacoon
RockyRacoon's picture

Define "cash".

Thu, 07/14/2011 - 03:55 | 1455225 A.W.E.S.O.M.-O 4000
A.W.E.S.O.M.-O 4000's picture

You know, things of value that can be easily traded.


Like cigarettes, razor blades, a metal spoon that can be sharpened into a shank, stuff like that.

Thu, 07/14/2011 - 05:15 | 1455259 Harlequin001
Harlequin001's picture

That's what individuals will do, but not institutions currently invested in money market funds...

Thu, 07/14/2011 - 05:15 | 1455258 Harlequin001
Harlequin001's picture

Gold is the death Nell for these institutions; they cannot afford to have everyone run to gold. As such I think they would prefer to leave it in bank deposits rather than invest it wisely in gold for their clients...

Thu, 07/14/2011 - 02:41 | 1455114 void_ptr
void_ptr's picture



Wed, 07/13/2011 - 21:32 | 1454555 jm
jm's picture

This is all very true, which is why an actual downgrade is so unlikely.

Then again, even if entities are mandated to collateralize with AAA paper, there is effectively none if the US goes, unless everyone wants to scramble for Bunds and such which just isn't feasible.  So people will just continue going through the motions until the house burns down around them.


Thu, 07/14/2011 - 00:33 | 1455051 Harlequin001
Harlequin001's picture

They will simply change the funds' mandate....

Thu, 07/14/2011 - 07:41 | 1455392 Urban Redneck
Urban Redneck's picture

An alarming number of people seem to want to continue going through the motions of mindlessly scrambling into CHF, regardless of the European instability it causes or the fact that by way of relative scale- it would be like cramming not just a dozen circus performers into a mini clown car, but rather the entire circus troupe and its zoo auxiliary (including the elephants).

Wed, 07/13/2011 - 21:30 | 1454571 bigwavedave
bigwavedave's picture

funny... you think they wont change the rules?

Thu, 07/14/2011 - 00:36 | 1455056 Harlequin001
Harlequin001's picture

ands that's what happens when you start at the top and work down commenting as you go. At least we can agree on a likely outcome...

Wed, 07/13/2011 - 22:06 | 1454700 CrankyOldCreditGuy
CrankyOldCreditGuy's picture

No problem, I am going to put some UST/GNMA/FNMA  into a structured vehicle and tranche it up into several layers and get the agencies to rate the top layer AAA – presto a new levered market for gov’t bonds.

Wed, 07/13/2011 - 23:54 | 1454974 slewie the pi-rat
slewie the pi-rat's picture

junk bonds will soar!

Thu, 07/14/2011 - 00:05 | 1454997 Yen Cross
Yen Cross's picture

 No they won't Slewie. They have pegs to short term yields. Go rent a cool movie. it has nothing to do with numbers. It's called Less Than Zero.  If you have already seen it, see it again. {LEGALLY}  YEN...

Wed, 07/13/2011 - 18:53 | 1454004 JW n FL
JW n FL's picture

Gold Lift Off in 3 - 2 - 1... we have Lift! Off!!

Wed, 07/13/2011 - 19:08 | 1454050 DoChenRollingBearing
DoChenRollingBearing's picture

Two more days and I am BACK in the USA buying more!

If there is any physical left...

Thu, 07/14/2011 - 01:21 | 1455104 RockyRacoon
RockyRacoon's picture

Watch the U. S. Mint commemorative products.  They can't raise prices like they can on the bullion products.   It takes time and you might catch a deal.

Check this out:

Wed, 07/13/2011 - 18:53 | 1454005 caerus
caerus's picture

damn this is fun

Wed, 07/13/2011 - 18:56 | 1454015 CrashisOptimistic
CrashisOptimistic's picture

Guess what, sports fans.  

Society cannot function with its alpha asset priced near or higher than $100.

The game is over.  

Wed, 07/13/2011 - 18:57 | 1454021 caerus
caerus's picture

RJA anyone?

Wed, 07/13/2011 - 18:59 | 1454026 EHM
EHM's picture

Tradition bitchez!!

Wed, 07/13/2011 - 19:11 | 1454058 Mae Kadoodie
Mae Kadoodie's picture

And don't call me Shirley..

Wed, 07/13/2011 - 18:59 | 1454027 SMG
SMG's picture

Tyler = relevant, but funny too.

Wed, 07/13/2011 - 19:00 | 1454029 Cdad
Cdad's picture

Ummm...don't we have an auction tomorrow?

Wed, 07/13/2011 - 22:45 | 1454811 Yen Cross
Yen Cross's picture

  Good call cdad  ! Like a glove as always... Ya better run for cover , 2-5 auctions should be really interesting coming up. Yield curves and all.  13 week and 26 week on the chart.

Wed, 07/13/2011 - 19:01 | 1454032 HungrySeagull
HungrySeagull's picture

I cannot comment on this because I know nothing about it.

If it drives Gold and Silver up, then great! If not? heh.

Wed, 07/13/2011 - 19:02 | 1454033 RobotTrader
RobotTrader's picture

All TPTB needs to do is throw in a couple of "Fear Curveballs" like another country is on the brink of default, and investors will once again dump foreign sovereigns and pile into U.S. Treasuries.

Meanwhile, gold continues to rocket up in foreign currencies as well, as each country is in a desperate race to the bottom of the tank.$GOLD:FXE,$GOLD:FXY,$GOLD:FXC,$GOLD:FXS,$GOLD:FXA,$GOLD:FXM,$GOLD:FXB,$GOLD:FXF|D


Wed, 07/13/2011 - 19:04 | 1454040 camaro68ss
camaro68ss's picture

Did someone hack robo traders account? he sounds normal

Thu, 07/14/2011 - 00:40 | 1455059 Harlequin001
Harlequin001's picture

just playing both sides of the coin old stick...

Wed, 07/13/2011 - 19:09 | 1454054 Tyler Durden
Tyler Durden's picture
by RobotTrader
on Mon, 07/11/2011 - 22:47


Watch the yields on Uncle Gorilla notes plunge to
unheard of lows, while commodities of every stripe get poleaxed as
screaming scared investors pile into U.S. Dollars.

Wed, 07/13/2011 - 19:16 | 1454078 Robslob
Robslob's picture


Wed, 07/13/2011 - 20:53 | 1454432 Bay of Pigs
Bay of Pigs's picture

Bitch Slap Bitchez!

Wed, 07/13/2011 - 19:17 | 1454079 Infinite QE
Infinite QE's picture

Classic. Still need a ten x inverse robot trader ETF!

Wed, 07/13/2011 - 19:56 | 1454246 AccreditedEYE
AccreditedEYE's picture

LMAO! Ohhhh Robo... He did it to you!!! haha

Thu, 07/14/2011 - 01:25 | 1455108 RockyRacoon
RockyRacoon's picture

Is this why his ability to post pics of boobies has been revoked?

I'll miss them -- they were his most relevant comment.

Thu, 07/14/2011 - 08:27 | 1455487 SheepDog-One
SheepDog-One's picture

LOL! RoboTrader is down for the count! Poleaxed by Tyler!

Wed, 07/13/2011 - 19:15 | 1454075 kito
kito's picture

robo, you sound soooo bearish

Wed, 07/13/2011 - 20:28 | 1454352 lieutenantjohnchard
lieutenantjohnchard's picture

meanwhile, a stopped clock being right twice a day outperforms the contract 1099 processor and his predictions.

robottrader: the ultimate contrarian indicator.


Thu, 07/14/2011 - 08:29 | 1455489 SheepDog-One
SheepDog-One's picture

Momo just ultimate faded himself.

Wed, 07/13/2011 - 19:04 | 1454038 plongka10
plongka10's picture

OT, but has the Moody's story been censored? Can't get anything but the headline when I click on the comments link?

Wed, 07/13/2011 - 19:09 | 1454056 cougar_w
cougar_w's picture

it's werking for me

Wed, 07/13/2011 - 19:11 | 1454065 janus
janus's picture

yeah, this article was doing the same for me just moments ago...I'll go try moody's again

Wed, 07/13/2011 - 19:10 | 1454060 n00b tube
n00b tube's picture

This is bullish for LNKD, right?

Wed, 07/13/2011 - 22:10 | 1454704 bankrupt JPM bu...
bankrupt JPM buy silver's picture


Wed, 07/13/2011 - 23:50 | 1454965 Yen Cross
Yen Cross's picture


Wed, 07/13/2011 - 19:13 | 1454069 Atlantis Consigliore
Atlantis Consigliore's picture

rename the US long bond "The Greecer"


rename the 10 year the "Berflunky"


rename the US dollar the Barney.


rename Congress Parliament of Whores.


QE 3 is Kick the fanny cans up the Barney Rear.


Ill see you 2.5 Trillion Barneys in funny

lisping kick the cans and crash the Berflunkies

and the Greecers into oblivion.

Be Bold with Gold.  $ 5000  cans coming.

Wed, 07/13/2011 - 19:58 | 1454256 Bastiat
Bastiat's picture

LOL! Nice!

Wed, 07/13/2011 - 19:15 | 1454077 lizzy36
lizzy36's picture

Cantor: President 'Abruptly Walked' Out Of Debt Talks - Areas Of Agreement 'Not Even $1.4T' In Savings - DJ

So this is going really well. Next couple weeks should be interesting.

Fricking muppets in Washington.

Wed, 07/13/2011 - 22:18 | 1454731 DoChenRollingBearing
DoChenRollingBearing's picture

No matter what happens this all ends badly.  Even Ron Paul can´t stop the flood, he would do a relatively good job, but this will still end ugly...

And if it is not Ron Paul in 2012, uglier still.

Wed, 07/13/2011 - 20:53 | 1454098 buzzsaw99
buzzsaw99's picture

the recent up trend was never in any danger.

Wed, 07/13/2011 - 19:27 | 1454118 gianakt
gianakt's picture

In this type of enviroment cash is king, all other assets get hammered.

Wed, 07/13/2011 - 20:29 | 1454357 El Viejo
El Viejo's picture

I thought Money Markets were all invested in European Banks.

Wed, 07/13/2011 - 19:28 | 1454120 sbenard
sbenard's picture

I just love you people. Always, funny and witty, entertaining and insightful!

Wed, 07/13/2011 - 19:40 | 1454175 treemagnet
treemagnet's picture

This ought to shake something loose - but theres so damn much to shake.

Wed, 07/13/2011 - 23:45 | 1454951 HungrySeagull
HungrySeagull's picture

It won't shake, only crush. You want not to be the crushee.

Wed, 07/13/2011 - 19:56 | 1454248 cpnscarlet
cpnscarlet's picture

Did I mention I paid my barber this week with a Franklin Half? I did? Well it's worth repeating.

Wed, 07/13/2011 - 22:19 | 1454741 DoChenRollingBearing
DoChenRollingBearing's picture

Paid the lady who cut my hair two days ago less than $5.00, which included a decent tip.

But, I am here in Peru for a visit!

Wed, 07/13/2011 - 22:26 | 1454761 JuicedGamma
JuicedGamma's picture

Some advice, any haircut under twenty bucks is going to look like shit.

Wed, 07/13/2011 - 23:08 | 1454871 Captain Benny
Captain Benny's picture

Since when does fiat determine the value of goods and services?  The value of goods and services are valued relative to environment and local demand for MONEY.  Remember that dollars or any other fiat based currency is NOT money.  Money will never have counter party risk.

Wed, 07/13/2011 - 23:46 | 1454953 HungrySeagull
HungrySeagull's picture

Wife hacks at my hair now and then. I am too old to care how I look these days.

Thu, 07/14/2011 - 00:08 | 1455003 Yen Cross
Yen Cross's picture

  You 2 sound like a couple of { PEZ DISPENSERS

Thu, 07/14/2011 - 00:56 | 1455076 Bananamerican
Bananamerican's picture

clippers bitchez....

america's about to get leaner (& meaner)

(sustained) selling in both ES and bonds is an "oh shit" moment

Thu, 07/14/2011 - 00:36 | 1455055 DoChenRollingBearing
DoChenRollingBearing's picture

My less than $5.00 (13 soles, three soles tip was the tip) haircut looks great!

Going rate where I live is $25.00 (USA).

Thu, 07/14/2011 - 00:47 | 1455062 Harlequin001
Harlequin001's picture

$3.30 ish, twice a year whether I need it or not...

To cut costs I'm thinking of moving to Japan, where it will all fall out of its own accord after a few days, or so I'm told...

which is good for me, or so I'm told...

Wed, 07/13/2011 - 20:00 | 1454268 chump666
chump666's picture

Total chaotic trading going on, overbought risk trades in less than 12hrs!  The market gets a double whammy of BS rhetoric 1st from China, then Ben Bernanke rambling.  Thankfully the rating agencies are lurking.  Cause a 2008 blowout is due and they don't wanna be accused that didn't warn the market this time.

Watching Asian indexes particularly China, thanks to their maniacal commie overlords...thy just got Tsunami of oil inflation coming



Wed, 07/13/2011 - 20:10 | 1454291 pitz
pitz's picture

About motherfucking time.  US Treasuries to $0.

Wed, 07/13/2011 - 20:13 | 1454295 10kby2k
10kby2k's picture

Americans havent learned yet that all asset classes can lose value at the same time... or that one asset class can get crushed while the others stay flat. In other words; people can lose with nowhere to hide on paper. This lesson will culminate in the universal realiztion that the farce that the debt load is in any way managable is just that...a farce.

Wed, 07/13/2011 - 20:31 | 1454364 El Viejo
El Viejo's picture

I believe a guy got a nobel prize for the idea that multiple assets going up and down at the same time was an indicator of a coming recession. I think he was on Charlie Rose a couple of years ago.

Wed, 07/13/2011 - 20:44 | 1454410 Itsalie
Itsalie's picture

why do they need to learn anything? the last 3 POTUS held the land's highest office without ever having had a proper job all their lives, this is disneyland, education is so passe, watch tv, eat bigmac, no pay mortgages, and buy cheap ipads made in some sweatshops in the east using plastic (or soon, using your iphones).


btw, long bonds are up again, sorry, I am amerikan, my memory span is only 3 seconds longer than goldfish :(

Thu, 07/14/2011 - 00:50 | 1455068 Harlequin001
Harlequin001's picture

That's er 6 seconds or somethin...what was that again... er yes, two lumps please...

Thu, 07/14/2011 - 07:08 | 1455328 Miss Expectations
Miss Expectations's picture

Thousands of North Americans are complaining of acute asthma-like attacks, gastrointestinal problems, and lingering severe flu-like illnesses including a persistent dry hacking cough that eventually goes away – only to return. Other symptoms of chemtrail-related illness include sudden acute gushing nosebleeds, dizziness, migraines, joint pain, twitching eyelids and sudden extreme fatigue. Short-term memory loss and the inability to concentrate or enunciate simple thoughts are also common complaints. In Espanola, exposed townspeople all started forgetting where they’d parked their cars.

Wed, 07/13/2011 - 20:19 | 1454317 monopoly
monopoly's picture

Tyler, you miss absolutely nothing. Or, do you have 200 on your staff. Amazing. :))))

Wed, 07/13/2011 - 20:38 | 1454387 The Axe
The Axe's picture

ha ha ha Tyler that's funnier then when Moe hits Curly in the head with a pick-axe..and the axe bends...

Wed, 07/13/2011 - 20:39 | 1454389 chump666
chump666's picture

If anyone is interested Asia markets are trending down via debt market fiasco. CDS spreads are widening and there is a fat 4400 option strike on the ASX200.

China meltup talk is good for 48hrs, it ends.

Point is you got oil bid, that freaks out the ghost city planners of China.

Sell is back on.

Wed, 07/13/2011 - 20:42 | 1454399 Boston
Boston's picture

Aaaaaand it's gone.  The Treasury sell off, that is.

The 5 year is back to unchanged.


Wed, 07/13/2011 - 21:16 | 1454521 zorba THE GREEK
zorba THE GREEK's picture

 It's all a bluff, the rating agencies would never take away the AAA rating.

 Who would be brave enough to yell "The emperor is wearing no clothes"

Wed, 07/13/2011 - 21:41 | 1454613 bigwavedave
bigwavedave's picture

seems to me that Obama can end this stalemate with a very simple offer.... "Raise the debt target by 2.5T and I will not seek a 2nd term"

Thu, 07/14/2011 - 00:11 | 1455008 Yen Cross
Yen Cross's picture

  This isn't rocket science...  4Trillion =  2billion in tax increases, Entitlements, Union pals(pensions) Illegal votes.


                                        2 Trillion = all of the above minus the tax increases and otool care...

Wed, 07/13/2011 - 21:50 | 1454640 rsnoble
rsnoble's picture

I like the 'bzzz' part of the article.

Wed, 07/13/2011 - 21:55 | 1454655 dcb
dcb's picture

it's because we are playing the trading game, long bonds may end up higher, but it won't be much higher, so starting to buy into tbt at the lower closes may be good. but buying treasuries will be about buying the higher low until in breaks the ascending traings.

Wed, 07/13/2011 - 23:45 | 1454949 chump666
chump666's picture

lets see if Italy can offload more junk to the ECB 5s and 10s auction due.

c'mon ECB your unrealized losses must be a trillion + by now...

and you are now on a tighening bias = FUBAR

Thu, 07/14/2011 - 00:40 | 1455060 chump666
chump666's picture is sinking, tight.  48hr china bid is toast.  it's back on.

greece, italy the whole damn EU.  endgame baby

Thu, 07/14/2011 - 01:25 | 1455109 e_goldstein
e_goldstein's picture


Thu, 07/14/2011 - 05:50 | 1455277 chump666
chump666's picture

check the ES now, italy flopped

Thu, 07/14/2011 - 08:15 | 1455458 dcb
dcb's picture

It's all hft crap, and yesterday was a great example. we went up to exactly the downward trend line top on the s and P, then had a massive sell off. on normal trading the going above the prior high would have indicated a buy signal. Of course a false one here. generated by hft algos who can push up and dump in a moment. and there are people who don't think hft is a problem. It's a rape the retail investor market and that's they way the powers that be want it. Hard to figure out why we aren't having a very good recovery with these idiots in charge (LOL)

Thu, 07/14/2011 - 08:24 | 1455483 dcb
dcb's picture

OH, notice it is good for the euro which is up today. shows how screwed up the system is. since we haven't gotten to the top of the down trend on udn, it hasn't dropped.

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