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Munis Are The First Official Burning Theater: "There Is An Avalanche Of Bid-Wanteds" As Nobody Can "Accomodate This Much Sell-Side Pressure"
Over the past year, there have been many references to panicked sellers behaving like people in a burning theater. May 6 was the closest we got so far in 2010. Today we get our second confirmed spotting. Advice to parents: do not let your kids read this if your last name if Gross and their first is William: "Bondholders sought buyers for $1.4 billion in debt yesterday, the most since June 15, 2006, according to a Bloomberg bids-wanted index. “Nobody’s bidding,” Tony Shields, a principal in the public-finance department at Williams Capital Group LP in New York, said in an e-mail. There’s “an avalanche of bid-wanteds, and there is just not enough liquidity to accommodate this much sell-side pressure.” There is another words for this condition. Bidless.
Per Bloomberg:
Municipal-bond yields jumped at almost every maturity, except rates on 1- and 2-year debt, which fell 4 basis points and 2 basis points, respectively, BVAL benchmark indexes show. Tax-exempts coming due in 25 years rose for a sixth straight day, climbing 14 basis points to 4.72 percent yesterday, the highest since Aug. 12, 2009.
Amid the rising yields, New York City cut today’s tax-exempt offering by two-thirds to $100 million citing “volatile market conditions,” the Office of Management and Budget said in a press release yesterday.
But, but, the market just hit a two year high for god's sake!!?? Are you telling us it is all a scam???
Long-term rates may increase more than 50 basis points next year if the Build America program isn’t renewed, according to a research note by analysts led by John Hallacy, manager of municipal research at Bank of America Merrill Lynch in New York.
The subsidy was left out of an agreement President Barack Obama struck with Republicans, some of whom have been critical of the program. While in the minority, the party has enough power to stall the legislation. U.S. Senator Ron Wyden, a Democrat from Oregon, who previously led an unsuccessful bid to extend the program, offered an amendment this week to include it in the tax bill.
Yeah, yeah: cut to the good part:
“Look at the yields; there’s not a lot of demand right now,” he said. “Eventually the yield curve is so steep, you’re getting 5 percent yields. Empirically that’s a pretty attractive level.”
The reduced demand, coupled with mutual-fund redemptions and rising Treasury yields has helped create a “perfect storm” for the tax-exempt selloff, Shields said.
Ah... bidless, and perfect storm. Two terms we haven't heard in the same article since late 2008.
There are only two solutions now: either the SEC institutes circuit breakers in muni trading (snicker), or America lets GETCO loose to be a DMM in muni land. Of course, that may mean that the world's busiest HFT firm, may finally let GM drop below $33. Which, in turn, may make all the lemmings who bought up the world's most ridiculously overpriced IPO, realize they are staring at one very big, and very hot potato in their retail accounts.
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I noticed a few risk off warning signs this week. Fire up the blackhawk.
Meanwhile the banksters are threatening homeowners who ask to see their mortgage note:
http://fedupmontrealer.blogspot.com/2010/12/banks-threatening-homeowners-who-ask.html
Business as usual.
Why do these borrowers think they pay for title insurance? The bank demands it but the borrower is the benefeciary to the extent of his equity in the property. If the bank cannot produce the note, he has 100% equity in the property. If some court decides otherwise, let the bank and title company fight it out. Sue the title company to either produce a note or pay the claim. Set these douchebags onto each other.
The insurance one receives from a title company is for clear and marketable title to protect against title issues that originated on or before the closing date of a purchase or refinance. Anything after happens after that date, such as improper assignment of promissory note, is not covered by title insurance.
Nice try on your analysis above, but like most folks on the interweb... your intelligence is a figment of your imagination.
Back to the tin hat mines for you!
Fire up the blackhawk...
yeah... about that one. There is still the matter of the unpaid bill of the last shipments of those and the fuel bill that is also not payd yet.
I think firecrackers will do fine untill all maters are settled.
Tyler, could we get an ignore function on the site please?
TheGreatPonzi took GloomBoomDoom's avatar, and is trolling him. I wouldn't necessarily block all of his posts here.
Fair enough, but it would still be nice to block posters if you wanted to. I'm sure there a plenty who'd like to block me too :)
Another greenlight, am I right?!
Go Huskies?
LOL. Where in the world is Harry? I wonder if Harry's imaginary home domestics business is selling any decor items to real rioters in Greece.
he's stuck on a snowbound highway, trying to sell his wares!
Sales in home decor? Yea it's a leading indicator... leading indicator for gayness.
flag as fabulous (1)
Lol @ post and post above it
+1
Now that was funny, Wanker. I've often wondered if it was intentional . . . and your timing there just answered my question. Well done!
+1
That is a good idea. Popularity breeds trolls and lowest common denominators. I think it's time to install an ignore function.
(d)
LOL.....A defaulting city is the least of our worries. Ben is aiming a little higher.
He is a "15 weeker"...
I think you mean Tweeker.
I will offer you top dollar for your Detroit munis, as collector's items, next year after Mayor Bing declares bankruptcy. I want to put them with my $100 Trillion Zimbabwe notes!
Oh, do you collect wallpaper?
Better get them quickly, as you may see some competition developing . . . from confetti manufacturers.
I bought two in mint condition for $4.00. I bet it will actually be a good investment.
you know honest to God if this were a real market the price discovery would occur in which buyers would emerge at the real attractive yield. i would loan money tax free at 10%....
Really??? Do you understand anything about risk/reward? I wouldn't loan tax free money to any municipality unless they were in the Marsellus Shales at this moment and the bond had better be short term--and that means less than 3 years since those municipalities are going to be fine until Chesapeake and Haliburton are done.
I have seen some interesting material on the whole NatGas fracking thing over a ToD recently. Basically fracking is *much* more capital intensive. Compared to a conventional, the margins actually shrink dramatically even on far greater output. Well maintenance is a big part of that cost. Think area under a curve where you just bring that area forward in time at greater expense. There was also a bit of banter that the companies running these operations are gorging on debt to keep operations going.
Caveat emptor of course, I am just a spectator (but I live in the area you speak so I do pay close attention).
Cooter
I guess as these bonds age with no bids, they will be calling them municipayless bondage
+1 HAHAHAAA!
From the article:
HAHAHAHAHAHAAAA!
There's no part of this that isn't hilarious.
Oh, yeah, forgot to mention -- Both Romeo and Juliet die in the end.
As Alan Greenspan once said 'we can guarantee liquidity funds, we just cant guarantee their purchasing power'
The man behind the curtain is a punk bitch.
Apparently you don't understand the laws in the state of Michigan. A city/town is allowed to claim bankruptcy the moment they can no longer pay their bills. Basically, it's like homeowners that stop making payments so they can renogotiate, since that is the only game in town--however- Michigan municipalities can (and I guarantee you will) claim bankruptcy when they get down to nothing left to cut from the budget and can no longer pay their bills, period. Bond payments? LMAO.
Detroit is a wasteland and bulldozed town. U/E is in the range of 30%, conservatively estimated. They are stealing revenues from bordering municipalities just to stay alive. And if you know anything about the town, which you obviously don't, then I will have a great laugh when they file for fools like you that thought they were too big to fail. They are not in any way too big to fail--that is only for bankers.
The police/firefighters unions can't be cut any further due to "safety". There is nothing left to cut, GreatPonzi. Many cities in Michigan are already in default. Take a look at Flint and Plymouth. Detroit will go down and your moronic thinking that Bernanke has the power to save a city from default is beyond absurd. Ben controls the flow--not the target. No one will give a shit when Detroit goes down, the state may be forced to give them a loan but it is just the same old extend and pretend until the state goes down.
By the way, if the maturity of your bond was for more than a week, if you have children, they should spank your ass.
All these concerns would be true if the FED did not exist.
But with the FED and with unlimited bailouts, impoverishment, bankruptcies, third-world slums, squatted homes, Chernobyl ghost towns, do not matter!
Bernanke has invented unlimited prosperity! Live with it, doomers!
Sir,
It has been brought to my attention that you and Cetin have never been photographed together. I invite you to comment on this.
Well played. I get it.
Mathematics be damned!
Thanks for the chuckle, Ponzi. Your childish conflation of price and value is...er...priceless. You will discover the difference shortly in a very real, visceral, and personal way.
Have you seen my buddy, Ferdinand, the ArchDuke of Austria lately? He told me he was gonna tool on into Sarajevo and scarf up some perogies and do some shots of Ouzo -- I'm starting to get a little concerned at this point...
Live by the gun...
The with 30year is over 5% and tracking y=X2.
It's all pretty wallpaper.
Ben Bernanke is going to be eaten from the inside..... Soon
At the right level the GO's could work. Not bad.
Mish talked about this yesterday. To blame this on BAB is like blaming the Johnstown flood on a leaky faucet in Altoona.
Here's the link...ouch!
http://globaleconomicanalysis.blogspot.com/2010/12/bloodbath-in-muni-bond-funds-reasons.html
Yeh and at the end of the posting, he had to say, and this is deflationary. Deflationista to the end.
There is a radio spot running on WBBM, AM 780 in the Chicago market hawking muni bonds. Wow!
You have to respect the hustle.
Some hustle crack, some hustle Detroit Muni bonds. You don't have to respect the hustler but in the name of baby Jesus you must respect the hustle.
LOLOL
@bob_dabolina
Thank you (and baby Jesus) for the laugh.
A 4 minute clip about hustlin'. Funny, funny, funny
It's called American Hustle:
http://www.youtube.com/watch?v=mRmFEpl74sI
Probably right after the "buy gold" spots.
Definately 'Buy gold', but you also have to put on your big boy pants, and find the best price to buy it. Its a big responsibility taking care of your wealth, its true.
Praise Slack.
You are not the *real* J.R. "Bob" Dobbs.
The Graven Image of 'Bob' Dobbs' Face is a registered trademark of The SubGenius Foundation, Inc.
Cease and desist.
Please feel free to steal my avatar. Yours hurts my eyes.
All hail Bob.
Hail Eris!
Praise his holy name!
How are US state bonds doing?
"I just bought a few Detroit muni bonds" do you even know WTF you are talking about? Does your poor mom and dad still put a roof over your head?
http://michigan.municipalbonds.com/bonds/recent/
There is plenty available here.
You can't lose money on them.
DOOMERS WERE WRONG, bitchez! Live with it! No crash is coming! The economy is restarting!
if you owned a bunch of tax free munis pre-crisis you would be sitting just fine right now, i would go with longer term bonds in texas yielding 5% b4 i would mess with anything in michigan though
So you prefer BBQ-flavored default.
My man... They are eating shit
Here is a chart of FLMCX and it aint nothin' to brag about.
http://tinyurl.com/285udxy
I have read your advise here to purchase
Detroit municipal bonds and your advise in the
previous TD article declaring that PM's is a poor
investment. I'm tempted to invent something
mean to say to you, however, I won't. I am curious
though would you mind revealing your age?
Then why are muni bonds dropping so hard? Why aren't there enough buyers for all the muni bonds offered? Why is it that when the BAB subsidy is pulled that market starts to fall apart and can't hold up on its own without the BAB subsidy?
http://noir.bloomberg.com/apps/news?pid=20601015&sid=aJlJSKhHztlI
i almost lol'd
"There is plenty available here.
You can't lose money on them".
I think that is the saddest salespitch I have ever heard. And the funniest. Great avatar.
"You can't lose money on them".
WTF? There is no such thing as a risk free investment in ANYTHING! Hey, by the way, there is this great startup that will revolutionize the pet industry--pets.com--this is a winner!
16 months listed on the NASDAQ with some of the greatest ads in superbowl history. However, singing Blood Sweat and Tears "Spinning Wheel" --was an incredible omen:
What goes up must come down
spinning wheel got to go round
Talking about your troubles it's a crying sin
Ride a painted pony
Let the spinning wheel spin
You got no money, and you, you got no home
Spinning wheel all alone
Talking about your troubles and you, you never learn
Nuff said.
..GreatPonsi, Sir, I thank you for the new issue Michigan Muni listing, and indeed there are PLENTY...
http://michigan.municipalbonds.com/bonds/recent/ 5:45pm View rating Detroit Mich Wtr Supply Sys Sr Lien-ser A CUSIP: 251255W35 2022-Jul 5.000% 101.727 4.642 $25,000 Investor
well, its just a little above PAR and is a SENIOR COLATERALIZED ASSET LOAN AGAINST THE PHYSICAL DETROIT WATER SUPPLY....good and solid, and ALMOST 5% !! (tax free Michigan&USA?) can't lose, you can take over the water system, post a guard until they pay...right? no?
https://www.zionsdirect.com/bond-store.php STILL MORE
http://michigan.municipalbonds.com/bonds/state_moodys_reports
follow up, thank God for the Internet and Michigan Treasury Direct via Zions
i locked-in 10 (well they actually had 9 others, same CUSIP series) of those on an offer, immediately accepted, of 001.50 for a annualized 330% tax free....seems Detroit hadn't gotten around to paying this most recent coupon, but by the terms they can pay back, later, any missed payments..."cumulative payment"
http://en.wikipedia.org/wiki/Collateralized_debt_obligation
you know, i'd think that if a clever Bond Broker 'bundled' these Muni's into Tiers of Risk level that SOME "D-" Moody rated DetroitMunis could, for a SMALL administrative fee be de-risked to AAA+ by Moody's. based on the law of Large Numbers, Yes, No? and a 'catchy nametoo: [ Trademarked and Advertised with posters/shorts ] "GrassRootsCDO" with an American Flag/apple pie/and a '57 Chevy, by the HomeLand Town....Mid-Summer "Tom Sawyer day"....marketed somewhat as Patriotic War Bonds..
and better YET, ALL the Secured type Munis for Water Works would be bundled into a single ETF, GUARANTEED AGAINST THE WATER WORKS, IN CLASS ACTION TAKE OVER UPON DEFAULT....buy the individual bond-series @ 1% of PAR, and ETF them as if 100% PAR..
Now THAT would be kinda like the ETFs GLD/SLV....1% actual metal against 100% secured storage included (but you are not allowed to look-see) mAND THEN, these ETFs could be, Debt Swapped in the international markets, for NOTATIONAL...Oh, yes, i see insured-leverage DETROIT's power/water/sewer/roads/public building could be "notationally" a Trillion Dollars...
Water Works?? Fsck that, gimme the Short Line and Reading RR's!
May I propose the "MC5%" Fund?
http://www.youtube.com/watch?v=mLTFZgy7fbk
ELMER....he's fuckin' with us. A bonafide whack-job. Not any ordinary troll, a fuckin' mastermind perverted troll...
that's fine....I enjoy talking to myself.... learn how to post one of these days; so after I yell at Elmer, no less than FOUR chumps argue with the fuck-wad (5 if you count one below) HA! great stuff
Kinda like taunting a barking dog in its kennel!
Dear Mr. "I've just bought a few Detroit muni bonds": have you been watching the yields on your precious dollar lately? Fact is, you are a booby.
probably the most pathetic comment i've ever read on this site
Hey Rose Boy, I put all my money in precious metals in 2002? When did you get in?
oh hell everything is priced in a fiat currency anyway so what does it matter. get long the ETF: "AMMO"... long lead, brass and copper....
Guns and bullets are nice, but I prefer slingshots, swords and knives. Quieter, and generally, you are closer to your victim.
Absolutely, along with ground sensors, night vision, full range of fire power, a good blade is a must for the modern post Amerikan citizen.
PS A powerful, quiet hunting bow is also a nice addition.
Cross-bow and pissed-off mastiffs at 10 paces.
this is extraordinarily bullish for stocks....but even if there were an avalanche of bids that, too, would be bullish for stocks. if people magazine published yet another cover story of brad and jennifer that would also be bullish for stocks.
where have all the green shoots gone?
long time passing....
Just thought of something incredibly dangerous, but I won't tell anyone for fear that some jerk would start placing ads in People Magazine and get the Ignorati to buy them...
No bidders? This sounds like a job for SuperBankster.
The Adventures of SuperBankster. Faster than a speeding bullet! More powerful than a locomotive! Able to create billions in a single keystroke! ("Look! At up in the sky!" "It's a bird!" "It's a plane!" "It's SuperBankster!")... Yes, it's SuperBankster ... strange visitor from another planet, who came to Earth with powers and abilities far beyond those of mortal banksters! SuperBankster ... who can change the course of deflationary forces, create money in his bare hands, and who, disguised as Ben Bernanke, mild-mannered professor for a great metropolitan university, fights a never-ending battle for truth, justice, and the bankster way! And now, another exciting episode, in The Adventures of SuperBankster!
In this episode, muni-bond holders seek relief from deteriorating prices.....
That was very good.... +++++
funny. Sad. Sick. Testing going on here. Will SuperB finally be subdued with kryptolante? Or will Bankster be rescued once again by their bald headed hero? Stay tuned.....
should be
"never-ending battle for deception, privilege, and the bankster way!"
otherwise excellent!
Peter Schiff just gave fast money on cnbc the "what for" and they didnt like it one bit. We are doomed.
39 minus 22 equals... now thats a tough captcha.
Ya, mine was easy too. I haven't grabbed the calculator in a while. I hope its a secular trend, and not just cyclical:>}
.
Things seem to be turning. Maybe this is the penultimate dip before higher highs or maybe this is the Big Fall. Either way, I'd rather be a prepper than a banker or a mayor. Yeah, I know it sounds biblical, but when "The Turn" comes, people is going to lose their shit.
+1
It wasn't very long ago that people were laughing about the "nut-jobs" that suggested GM would go bankrupt. After all, that's unthinkable.
It's not so unthinkable to think about what's going down throughout Europe, the US States, and in the Muni market. The riots in Greece are real, and will get worse, and will start anytime in Ireland, and a Country Near You. With the 32nd retail net outflow week, it seems like only the bobblehead pundits and ruling class can't seem to wrap their brains around it.
I understand that most normal people don't spend their time reading about this stuff -- they have to pick up the kids and stop at the grocer on the way home. However, over-all, IMHO the retail have it already figured out: 13% approval for Congress (lowest on record), no confidence in the financial system, and signs of outright rebellion ... yes, the tide is turning: "Normal" people have figured this out (only the elected can't go there, because that type of thinking jeopardizes their meal ticket).
What signs of outright rebellion? I don't see what I think we should be seeing. Please direct me to what you are talking about in the USA, Mikla.
The younger generation is not getting angry enough other than on Snakebook and Twitcher. I'd love for technology to go down for a good month or two--no internet, no cell phones, to wake them up to the real world of making your voice heard. I am very cynical these days when I find that people that are 79 years old are protesting the Afghan sham war tomorrow and chaining themselves to the White House fence to get arrested. Where is the spine of this country....well, I think Time's idiot of the year can tell you. They are on Snakebook. Or their Iphone, Ipad, or website of choice.
To get people into the streets, other than from abject poverty and homelessness, is going to take some work. DNOS attacks are their only fight against the those they deem deserving of punishment. In the US, we need real humans of all ages demonstrating in the streets in big numbers, with TV coverage, they don't like what is happening with banks eating them for lunch. Until that happens, it's business and bonuses as usual.
++
I would add that it is not just the "younger generation" but "this" started with the generation that was educated in the 1970.. the consolidation of the school system, real shift in life style & lack of "real" work ethic, two parents working, increase in consumerism etc etc?
It starts slow, and builds. The assertion is that, "Things seem to be turning", and I believe that too.
Rebellion takes many forms. We are at the early stages, and different countries (with different national cultures) will exhibit their rebellion differently. Further, there is some "jostling-for-order" in who rebels first (e.g., does the US or EU crash first?)
However, as examples:
So, the assertion is, "Things seem to be turning". I believe that. We'll bankrupt a few more GMs, and then some states, and nations will start to outright repudiate debts, triggering the dominoes, violating social contracts (e.g., welfare and pension system failure), and people will outright repudiate their own governments.
Specifically in the context of the US, you're not seeing wholesale rebellion *yet* because the money flow and accounting hasn't happened *yet*. That's on a hair trigger. However, you *are* seeing public social statements, with widespread support, in favour of civil disobedience at many levels. Next comes the actual disobedience, which the majority of the population will actually *support*. The gunman at the School Board meeting is merely an "early outlier" of what will become (far) more frequent.
And, not all of this is "bad". The current system is immoral. We're not entirely sure what the next system will be, but no matter what, people worldwide will "all-of-a-sudden" figure out what is *really* important to them and their families. And, as always, the solutions will come from local communities that establish and perform under the guise of a "proper" social contract.
+10
I am starting to get a hint of a whiff of smolder in the US..
yes, I agree. Maybe the market will go up or maybe it will go down. It might even stay about the same for a while.
Relax on the muni thing. Since the BABs were not extended there are way to many bonds coming to market as we approach the holidays. It's like drinking water from a fire hose. Treasury rates are pushing up and this has always been a market where the demand is a mile wide and an inch deep. After the 1st of the year, issuance will fall off the cliff and munis will rally back like nothing happened. However, if the bond vigilantes are finally getting after the treasuries, all bets are off.
Today , in 1791, the Bill of Rights were ratified. Rights, what rights?
You act as if Americans don't know their rights. You would surprised just how intelligent and informed the average Amerikan truly is these days. A real awaking is happening all over! Just watch:
http://www.youtube.com/watch?v=EO-6tkKhEn8&feature=sub
We are totally screwed.
Peace, out.
LOL, in a depressing kinda way.
If that Youtube video wasn't so true it would be funny. But it is not funny in any way. I am a Colombian woman and even I knew the answer to every question posted. This is so very sad.
Ah CNNNN... One of my favorite shows. I have a whole bunch of their other clips if anyone is interested :). Another classic is where they're interviewing people about how a chimp has succesfully sued to be eligible for Social Security, due to use descending from him. The interviews were priceless.
Favorite bit on this one is when while pointing at Tasmania a guy says "I didn't realize south korea was so much smaller than north korea"
Rights are now termed privilege. And in order to qualify you need a chip up ur arse, unless of course you are weilding a revolver at a school board meeting, in which case u are instantly righteous.
Wait till you see a sovereign default. Then you will really get some higher rates across the board. I don't see Greece holding together for another 6-12 months because of social unrest. It is only going to get worse.
http://www.youtube.com/watch?v=ZvdUPCJPlws&feature=related
if they lose the police, they have lost the war. I don't see the army coming in to stop all of this. They would refuse.
Silent night
Holy Shight
The futures are red
Risk-on is dead
Sleep in heavenly peace
Fed better rev up those printers
They gotta call Timmah! and he calls the Bureau of Printing and Engraving, whose website name says it all: http://www.moneyfactory.gov/
What crash, we're all oblivious in Wonka Land!
Cocksuckers who manage the game care not what happens at all. They want the trend - what is the dumb money doing.
The band stopped playing some time ago,
yet so many continue to dance.
"They Shoot Horses, Don't They?"
Please TD, I would love some analysis on the Canadian economy and prospects moving forward. I watched something on CBC tonight, which really sucked. Any thoughts?
How about giving us a link to what you "watched" or a little more description??? I have been looking more into to Canada and am interested, their have been discussions about laws to discourage future inflows of "Hot Money" and some concern about the inflated commodity prices (bubble) and how that effects the Canadian economy...
He doesnt own shit. He looks stuff up on the web and his mom pays for his internet.
Here ya go trolls...
"Detroit has warned that it may seek bankruptcy protection."
http://www.portfolio.com/views/blogs/daily-brief/2010/12/15/state-debt-p...
Nothing can go bankrupt in Ameria, this great country. Nothing!
Even if Detroit files for bankruptcy, Bernanke will pay my bonds!
lol, the Bernanke will noy pay anything, we will.
Detroit Is Halting Garbage Pickup, Police Patrols In 20% Of City: Expect Bankruptcy In 2011Read more: http://www.businessinsider.com/detroit-garbage-pickup-bankruptcy-2010-12#ixzz18Fhws6WZ
Thats the spirit!
Do you do a stand up comedy act? I think Money McBags could beat you hands down, you tiny little man.
Nuh-uh! The Bernank tol' me I wuz first in line 'cause I wuz his favoritest dood in the whole wide room!
Bernake is a genius and will protect the value of the dollar and prevent all defaults or any other bad things from happening anywhere ever. The power comes from his beard, like Samson's hair. Protect the beard, and America is safe.
Interesting dynamic that the police have their own protest. It is quite apparent that the so-called leaders all over the world have failed miserably and brought all "tribes" to a point of failure and destruction for a lack of self discipline. Interesting that it happened world wide and at the same time, this time? The US is no better, maybe worse ? So will bonds collapse as many are predicting on all fronts muni/state/fed/corp? I think the entire ponzi is at stake, but when ? It would not take much of an unforeseen event to tip the entire thing over, world wide.
A few quick notes for those who may be interested:
1. As an asset class position (not as a trading vehicle) investors of size should not buy the muni funds. Buy individual bonds.
2. Stick to state essential services bonds for extra safety, or be preapred for an exponential increase in diligence work.
3. One dynamic driving prices is a catch up with the massive treasury move. The ten year has moved up over 50P in yield from 235 to 350. That causes dislocations in lots of places.
4. A muni priced in gold and backed by gold might attract some interest.
A muni bond priced in gold....now that is very funny! In Detroit it would be a gold plated, tungston and lead filled metal, backed up by the GLD. My ex-lover Paulson tried to get me back by having a necklace made for me of thees sheeit. Let's just say it was as ugly as a Detroit muni.
Believe it or not I think the law against gold bonds is still on the books even though private ownership was liberalized.
You say bidless, I say priceless.
Unlike stocks, futures, and lots of other securities, munis are a thin market - not every muni trades every day. So those not familiar just try to imagine an SP 500 stock that trades a couple of times a month and how that would price when a seller appears in a fast market. Given this you can imagine how and would be amazed at the way they get valued in portfolios.
Matt and Steve, the Traders at Breakpoint Trades have been generous enough to post yet another full edition, with audio, Newsletter, including trade ideas at link attached.
Have at it, appreciate your comments. This is some quality classic TA with Patterns, Fibonacci, Elliot, and not to mention, good old common sense. And they provide an awesome trading blog with lots of comments and intraday trade ideas, from subscribers and Authors.
Their record for watch list trade ideas is over 70%, and sometimes closer to 90%. Of course we all can't be there at the perfect time to hit each one, but that is not necessary. Hit enough good trades, that is all I have to say about that.
http://oahutrading.blogspot.com/2010/12/paid-newsletter-reposted-here-in...
Matt and Steve, the Traders at Breakpoint Trades have been generous enough to post yet another full edition, with audio, Newsletter, including trade ideas at link attached.
Have at it, appreciate your comments. This is some quality classic TA with Patterns, Fibonacci, Elliot, and not to mention, good old common sense. And they provide an awesome trading blog with lots of comments and intraday trade ideas, from subscribers and Authors.
Their record for watch list trade ideas is over 70%, and sometimes closer to 90%. Of course we all can't be there at the perfect time to hit each one, but that is not necessary. Hit enough good trades, that is all I have to say about that.
http://oahutrading.blogspot.com/2010/12/paid-newsletter-reposted-here-in...
I would appreciate some genuine, thoughtful discussion on this. The issue over the past two years has been that chasing risk was 'smart' because it was essentially getting paid the yield but was risk free because the government was/is backstopping everyone. That has been the argument for equities and munis to date.
But there are three camps I've seen on this site (and apologies if I mischaracterize any of the long-standing posters bull or bear; feel free to correct): 1. the bears and so-called 'doomers' who think this will all end in tears (myself, many others), 2. the true bulls (like Harry, others) who see improvement in sales and the economy and think this is all overdone, and 3. the market bulls (like Robo) who see the manipulation, and think the Fed is going to walk the razor's edge and just run with it to cash in.
I see the emerging muni crisis as the obvious continuation of the crisis (we had a property value bubble, and municipalities built up expense bases in line with this too fast growth in the tax base - cannot help but correct). In addition, I see signs that the stimulus is no longer having an impact. Large corporations, including banks where all the cash has been funneled, not spending and going in their bunkers, potentially for 12 months. This usually precedes recessions. But a recession now would knock this country on its rear.
Whichever camp you are in, I think it is time to start hoping that Ben's plan pays off. I see a muni shitestorm coming, and a string of dominoes about to start tumbling (lower spending, new round of FTE cuts, cost cuts) that will make 2011 feel awful. It already feels awful. Don't know if the government can bail out every municipality, printing press or not.
The government can bail out whoever it likes as long as, as Doug Noland says; the attribute of “moneyness” in Treasury debt remains. As long as the government's credit is 'money good' there's no limit, as RobotTrader infers. Where I depart from Robot is in the fact that, to quote Mr Noland again; the attribute of “moneyness” in Treasury debt is on track to ensure the doubling of federal borrowings in the neighborhood of four years. Here in Australia, Treasury debt has tripled in two years. I have no doubt that the situation is the same in most 'developed' nations. Does Treasury debt issuance have limits? So far it would seem not but to ascribe to this 'no limit' scenario you must also ascribe to these politicians & bureaucrats the attribute of gods. I don't say that flippantly either, the ability to have your promise to pay be taken as payment without limit is akin to turning the water into wine etc.
Since the primary 'asset' of central banks are government bonds, it's not hard to envisage the effect of a Treasury bond 'panic'. Mr Noland again;
'Moneyness' was fundamental to the doubling of mortgage debt in just about six years during the mortgage finance Bubble. Over time, the expanding gulf between market perceptions of moneyness and the true underlying state of the mortgage Credit ensured a crisis of confidence. For this round, the “expanding gulf” (in Treasury debt) is much more pernicious and the consequences of a crisis of confidence potentially more devastating.
Good post AUD. People bought up MBS even though (as one securities trader told me in 2006), the nonprime collateral was 'sprinkled' everywhere. The moneyness was there until it wasn't, end then liquidity fled. The implicit guarantee of the Federal government for MBS/Golds became explicit when the Fed became the buyer of last resort and swapping Treasuries for mortgage securities. Will they do the same with Munis? If there is a crisis, and funds start breaking the buck, what then?
Sure, as I said, as long as government credit is 'money' they can & no doubt will bail out whoever they want. And the moneyness of the dollar will remain, just like MBS, until it doesn't. All these guarantees have stretched this moneyness real thin but to quote Mr Noland yet again; bubbles can inflate beyond all reasonable bounds, then double.
I remember that in early 2008 I read a lot of doomsday comments about muni bonds, AMBAC and etc.
Three years later, I'm still waiting for the muni doom...
I'm really tired of wait the Armageddon...
Scooby-doo where are you?
I mean...
Armageddon where are you?
Swap fest in muni-land
http://www.xtranormal.com/watch/8096441/
Hugh Hendry check your drawers
Is Hendry in fact still a bond bull? I am not so sure...
Know what he is short - including debt markets.
Any Hendry watchers know if he is long ANYTHING?
(disclosure - am a hendry fan)
From MW -
The Spanish Treasury said it sold €1.782 billion of 1-year bonds, with the marginal yield jumping to 5.485% from 4.632% in a sale of the same issue on Nov. 18. The government also sold €618 million of 15-year bonds, with the yield reaching 5.986% from 4.552% at an Oct. 21 sale.
At these rates, Spain et al, can't grow their way out, can't pay their way out...who will do the bail? The Euro-bond? The ECB? the IMF? Somebody soon or else all the periphery will bleed to death. Prefer to see the core bleed to death instead. Fun to watch the infection moving from the periphery deeper, deeper. Germans will have to decide, revive DM or start lowering their living standards. It's actually a pretty tough choice.
"do not let your kids read this if your last name if Gross and their first is William"
Priceless!
they say to buy when there's blood in the streets - well, in Detroit there's ALWAYS blood in the streets. our (i'm in the burbs, so not technically our) former mayor Kilpatrick is being prosecuted, while still in jail on other charges, along with his dad for miscellaneous bribe -taking, etc., and they will go bankrupt. the neighboring city of Hamtramck is about to go bankrupt becuz Detroit won't share the tax revenues from a two-city located car factory. the water bonds of Detroit are about 80% backed by suburban revenues as the system feeds water to most outlying areas as well, though the board of water is 100% governed by Detroiters (automatically corrupt). the city leaders use as their models of excellence such paragons as marion barry, john conyers and his convicted/jailed former city councilwoman wife monica, jesse jackson (whose Escalade was stolen while in town recently), etc. mayor dave bing's wheels were recently stolen on his city issued car, and john conyers' congress-issued gas guzzler was broken into recently while his son used it for personal biz. they hate us suburbanites and we want them to go bankrupt, as we are tired of their shit. municipal default, bitchez!
here's a bid: 0.50
So it's true what they say: Stay out of other folks' bidless...
60 Minute Munis - the State are screwed...
Wait until the trifecta: Bonds, Oil prices, commercial real estate bust
http://www.cbsnews.com/video/watch/?id=7166293n&tag=contentBody;housing
Got trash pickup?
Bonds, Cuts, Taxes: Au and Ballistic Wampum, Bitches