• Sprott Money
    05/06/2016 - 06:03
    The US, in its own decline, is showing this same self-destructive tendency. The worse things get, the greater the inclination of the citizenry to say, “Carry on, everything’s fine.”

Long Bond Futures Down

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

this is bullish for equities...

 

/snark

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 gone.....you 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

deleted

 

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:

http://mintnewsblog.blogspot.com/2011/07/2011-gold-commemorative-coins.html

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.

http://stockcharts.com/freecharts/candleglance.html?$GOLD:FXE,$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
#1446461

 

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

Tyler...LMAO

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

No NFLX or LULU.

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

  NEITHER...

Do NOT follow this link or you will be banned from the site!