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Treasury Butterfly Collapses In Replay Of Market Plunge Action
While nobody gives a rat ass what assorted Stuxnet-infected vacuum tubes are doing with equities any more, the real drama is in the 2s10s30s, where the butterfly has just plunged by over 10% in this morning alone! This is a massive move, driven by the collapse in the 10 year, which at last check was trading at 2.37%, as the only trade is and continues to be the frontrunning of Benny and the Inkjets. The last time we had a move as dramatic and rapid as this was in the November 2008 equity plunge, and the March 2009 decade low. In other words, the bond market is now trading only based on what Pimco says the Fed will do, while stocks are pricing in mild to quite mild hyperinflation, as some administration idiot has floated the idea of $7 trillion in QE. To quote W, make no mistake - $7 trillion in QE would be the proverbial Shazam moment, where D.C. can officially change its name to Harare.
And here is what a completely broken market looks like (again). All correlations are busted now that even DE Shaw and the stat arb quants have ceased trading.
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Go spam your stupid charts someplace else, 99.
You said the same thing at 1320 and 1295 and 1265 and 1245 and 1220 and 1200 and 1150 and 1125 and 1090 and 1050.......
This time it's different? LOL
The kind of easing of monetary policy that is apparently being discussed seems worth more than a 25 bp Fed funds rate cut. NY Fed President Dudley suggested earlier this week that $500 bln of Treasury purchases is tantamount to 50-75 bp worth of easing, depending on the holding period. – Marc Chandler, Understanding the FX Price Action | Seeking Alpha
How can you ever recapitalize enough to reduce the potential exposure of over $500 trillion of derivatives? 80% of this amount is pure unadulterated casino money.
Hey, the best-performing stock market in the world was Zimbabwe, in nominal terms.
I stand corrected since I see the size of the total derivatives market is $1.2 quadrillion. Interest rate derivatives are about half of that.
It seems risky since this amount dwarfs the world's economy, and we're seeing the effects of the collapse of housing-related structured instruments, which no doubt are just a small percentage of the total.
Bill Bonzai7, bitchez!!!
Woo-hoo, 10-yr at 2.37. We're screwed, dudes. (Well, those of us in the US, anyway. You euro types, well, you're just getting teased.)
I think maybe I'll short at 1188, stop at 1202, cover at 1142. NDX max pain also looks interesting.
-profd
I can't believe someone in the govt. said 7 Trillion. We are headed to a economic implosion the likes of which may be closer to as you said Harrera Zimbabwe. I couldn't believe it, but after reading this and other articles your right.