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10 Year Breaks 4% - Highest Yield Since June 2009
The 10 Year is on the verge of breaking the 4% resistance, last seen in June 2009. This follows today's auction of 3 Months (0.175%) and 6 Months (0.265%). At last check we were a few thousandths away from the important psychological level, even as oil is surging.
Update: and here it is:
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The FED will probably raise the discount rate, just to pull down the 10yr yield.
The FED is likely to do this, especially since the discount rate is worthless--it does not affect anything, except for banks that borrow directly from the FED overnight. The FED has other mechanisms to get cash to the banks besides the discount window.
Eventually the markets will wise up to the ruse. They should be looking at the FED funds rate, not the discount rate.
I think the action in oil futures shows the market is already wise to the ruse.
Hey truont... looks like you have been "truant" from your Macro-Hedge Fund 101 classes... raising the discount rate will only serve to move funds out of the 10-yr note into the short end (flattening the curve, higher 10-yr yield)... Furthermore, the Fed should not be targeting either the FF Rate nor the Discount Rate, but more usefully the Rate it pays on excess Reserves held at the Fed (yes, something new).
Stagflation coming in 3...2...1!
Sellin' my ass to buy a new T-shirt...wooooooo!!!
With "subdued inflation in the foreseeable future.." I imagine the closed door meeting is to discuss the risk of mortgage rates climbing to 5.5% and how to combat this. Mortgages at 5.5% or higher will kill any housing recovery. The FED must surely know this and now are no growing increasingly uncomfortable. I recommend more gold leasing!
Yeah, interesting phrasing on inflation.
If the Fed moves to subsidize mortgage rates even further, crude oil and other global commodities will make their ascent. One way to ruin a recovery is to have oil go back over $100 a barrel and gasoline go over $4 a gallon.
With aggregate wages ticking down, that's one way to thoroughly piss off the middle class. The Fed would be better off engineering a selloff in the capital markets and lighting the fuze for a safety trade than what they did with MBS. The problem is (risk-free?) Treasury yields pushing up the curve than, say, Agency spreads.
Of course, the other option is conficating our 401k dollars for the cause and buying Treasuries. Not a wise political move, IMO.
Confiscation of 401K will be done under circimstances where it appears the government is doing you a favor. After poor returns, fraud, etc, the goverment will emerge with a proposal to take your 401k and you will receive an annuity with predicatable rate of return. Many will do it. Break the system and then present a solution... a page out of Dr. No's handbook. well played.
Not only that, but you will get a subliminal messages like "buy American bonds and help the country", while we our passively watching American Idol.
It... just... might... work.
Do you guys remember the 3 times they proposed taking our retirement and investing it into govt. financial vehicles. The first time was a month after Obama's inaguration where they proposed to make people invest all their 401k's into Social Security (you know, the same thing you have been paying in ALREADY for years now), which essentially they would be making you pay twice. The second time was around Christmas where they proposed to make it where only 20% of your 401k would be invested into SS. Then the last time was this Feb where they proposed that Pension funds should invest in some type of annuity to make a more guaranteed money flow for the retires (what is a "good" guarantee, US TREASURIES of course). So far they have been releasing trial ballons but be on the look out.
If the country and economy is doing so well, why keep coming after these funds so often. It's because we are broke as a country, and printing can only be hidden for so long before inflation/hyperinflation shows it head. By going after these funds, it's money already in the system and it would show that our Treasuries are still good. And both of you are correct, they will eventually get both, because I believe that they are going to attack Iran (new Bunker Busters transported to Diego Garcia a forward base for bombers. You don't use these weapons in an insurgency, but on a country with infrastucture and static defenses), once we do it will give cover for the economy to make it's horrible slide into the rest of the depression. Then they can blame it on Iran and during the process make it "patriotic" to invest your retirement into US Treasuries or any guaranteed (har har) govt. financial vehicle. People will be afraid of going against it without looking unpatriotic. Also they will make it seem like a sacrifice which was done back in WWII, and then they will make promises saying that after the war is done you will be able to convert your accounts back to whatever you want to invest them in. Knowing full well that is a paper bull.
If you think that a govt. can't go after pension or retirement funds look at President Cristina Fernández de Kirchner of Argentina. She's taking control of the countries Pension funds to raise cash.
http://blogs.telegraph.co.uk/finance/ambroseevans-pritchard/5504137/Argentina_seizes_pension_funds_to_pay_debts_Whos_next/
no, not gold leasing. silver. silver leasing.
US official silver supplies have already been exhausted. Better leverage paper silver to physical up to 500:1.
sell your bonds now before you take a 50% haircut.
I'm serious; it could happen in an instant.
Bernanke is that belligerent.
The 10y press on 4 must be squashed at all costs if BB and Tim expect to reflate the anemic housing market. Spring has sprung, the snow has been melting. Inventory backup is growing. Case-Shiller numbers are becoming more suspect.
Soon we will see the intervention efforts accelerate and get more creative. Modification payoffs to the banksters won't be nearly enough when long bonds go off the reservation.
+1 deficit cant be funded at high rates... they will step in
not to mention no one can afford to borrow privately at these rates either (including mortgages).
they either force yields down through outright QE, or through equity crash. But, one way or another, do not mistake Bernanke for an idiot. He is coldly calculating and knows exactly what he is doing.
They (the fed and white house) will get what they need one way or another. The "headline CPI" is their indicator of inflation (no oil or stocks in that number)... the math works that way if you are in Timmy's and Ben's shoes at least
they will print a housing market and our debt before the economy faces the reality...
I sense another desperate "now is the best time ever to buy a home" commercial from the NAR in our future.
This time Turbo Timmy is doing the commercial instead of the NAR President.
maybe with the help of Suze Orman and Cramer
4% doesn't sound very high relative to the risk involved with holding Treasuries. 14% sounds more like where I'd be looking to get involved.
What's the quote on Greece 10 years?
a bit down on this page:
http://markets.ft.com/markets/bonds.asp
Thanks, Gunter, but can anybody confirm that? I mean, WTH, are we going to see spreads like this on the UST 10 yr. and the Dow will be hitting 20,000? If that was a real print, we are majorly disconnected from reality.
Need some fear in the equity markets to generate some interest in the bond market before the 'housing recovery' is killed. Or maybe everybody just rolls their ARMs for another year, just keep pushing out the day of reckoning forever.
Serious retardation at Denninger's today.
http://market-ticker.denninger.net/archives/2153-Is-The-Metals-Market-A-...
After considering the gold market might be a Ponzi scheme, Krazy Karl says in the comments,
"If the gold market has been corrupted by an official act, as is alleged here, then Gold is effectively worthless." --Krazy Karl
Skip over whatever Denninger says on the PM market. He's missed it big in order to think suddenly if you find out supply is materially less than originally thought, that this somehow in some warped world negatively affects demand. Demand still is what demand was and for the reasons demand existed in the first place, irrespective of supply. Basic supply and demand. Reveal there's a helluva lot less, price goes through the roof. He's backed his opinion into a corner on this and will never no matter what. He picks up good commentary on other topics, but on PM, just skip them (Karl's jumped the shark with his PM comments).
If I understand Karl's point correctly, demand has little to do with it. If a bunch of people suddenly discover that they no longer have the assets that they thought they had, they'll have to sell other assets in order to maintain their leverage ratios.
Demand will always be there, it's just that people won't have the same amount of money in order to pursue it. If that's what Karl is saying, he's quite correct.
Yeah... Karl has really blown his gasket. At the same time, I'd feel safer owning Maple Leafs and Roos, than I would American Eagles.
That's how much I trust the gubbmint.
Ah the Maple Leaf, a coin from a somewhat solvent country. God save the queen! Maybe she will move to Canada or Australia after the UK becomes a total open sewer. I don't see why to get a Eagle anyway, why pay the extra premium?
Plus maples are 4 9's pure (instead of 3) and have a 5 face.
Roos trade at too much of a premium to spot, imo.
Yeah, who knows what all shit is mixed in coins minted by the US govt.
Read it and KK's discussion board. Obviously he is working for and a cheerleader of the paper fraud market (stocks, bonds, etc) in general. Justice will never come and he refuses to even recognize Gata as being a place for valuable information. Karl needs to wake up and realize the market in general is a fraud wrapped in allowed 'illegal' activities and he refuses to play by the new rules or learn that physical gold/silver is one of the options to preserve wealth.
Sadly, Karl is getting more and more worthless as time passes unless you enjoy hearing his constant cries of fraud. If he is so right as he constantly claims, where are his lawsuits against this fraud? Well Karl, put up with your lawyers and sue the Fed and FDIC or shut up and welcome to the 'New Economy'.
Silver is on some other shit (LOOK AT THAT CHART! A transitional element! GET THE FUCK IN THE BOAT PEOPLE! WE GOT ROOM!)....does it happen tomorrow? It may happen tomorrow! What happens if silver stays in todays range?!?! Look at the chart! Robo, LOOK AT THE CHART!
Go ahead BS, raise the damn discount, make my day. Lets show the world you have no control over nothin'. You are holding seven duece, and I call.
Oh, and lets not get started on $85+ oil. Good luck CA. Seriously, I was born there, and I still have love for ya! GOOD LUCK!
This is how California looked after Obozo's health bill passed:
This is what Hank Johnson thinks will happen if too many people go to the beach.
JTS
Sure that isn't Guam? I thought I saw some military uniforms.
You are holding seven duece, and I call.
I was imagining 8's and Aces ;) The dead mans hand.
agree 87+ oil no work with unemployment to population at 58%...
nice entry point. the 10yr will end the year at 3%, give-or-take, which is about a 15% return here out...
you know after what was exposed last week, silver is going to explode. the only question is when.
the serious silverbugs are vindicated. new bugs arriving hourly.
JPM has NO friends whatsoever.
and frankly, couldn't happen to a nicer set of guys now, could it?
...and speaking of love for JPM, Tallibi scorches them in his recent rundown of the Jefferson County crimes. I love the part where the Squid gets paid off to perp a fraud in somebody else's backyard.
http://www.rollingstone.com/politics/story/32906678/looting_main_street
First post ever!
How can the 10y be at 4%, oil at $86+ and the DJI up 40? Toss in a new $1T entitlement, anemic jobs growth, a $1.7T deficit ...
What am I missing here?
Yes it is most difficult to discern why. Have a look at Armstrong's analysis & you'll understand as he points out it is the "...rise & fall of America." He's predicting sovereign default in 2016. This will be quite a show to watch til the big day comes.
http://www.scribd.com/From-the-Hole-7/d/29424807
Thank you for sharing this. I really hope that book comes to fruition.
MASSIVE market manipulation by the Fed?
Concur
you're missing a touch of insanity and a dash of irrationality. if you add those two to the mix, you'll get exactly the outcome we have.
wish you took the blue pill, too, huh?
stay frosty.
Nobody wants to sell and take their losses from the big 2008 drop? More buyers than sellers = market goes up.
The Fed is planning another take down, remember July 2008? Baby needs shoes, and if it means the market indices and commodities need to get whacked (again), so be it.
It's about time for a geopolitical 'incident'.
Yup.
Trying to inflate asset valuations while issuing net $100-300 billion in treasuries a month to cover the deficit is virtually an impossible task. Ben wants inflation, while Timmy needs an endless supply of cheap money to finance the deficit. Timmy needs a strong economic recovery to bring tax revenues in line with expenditures, but nobody outside the Central Bankers wants low return treasuries should the economy and inflation heat up. Something will have to give, and that will almost certainly be increased borrowing costs.
Is there a solution? Watch for a risk aversion creating international incident of grand scale.
It's the easiest thing in the world to get that done. All you have to do is monetize the new debt. They money goes to drive bubbles upon bubbles upon bubbles (ie high/hyperinflation), while funding the debt at the lowest possible rate. This is already happening. Who the hell else can possibly be lending us money for free?
Almost. I would not be surprised to see something April 15-23. That might see something happen around tax time. It's a good time for the gov to demonize local dissenters and possible tax protesters. The world knowing that we will crack down on tax protest and squeeze the people will give more confidence in the treasury after all.
Uhhh... maybe because the economy is doing much better than people think... maybe because money is being bid out of low yielding bonds and mm (safe havens) and invested into higher risk assets... Hey Einstein, I would be VERY worried if the improving economy were not confirmed by rising bond rates. Just one opinion.
DP
Thanks, Richard. While your views may not be main stream here at Zh, we certainly thank you for joining us.
Rising rates will kill a fragile recovery in housing. If you believe that is not as important as it used to be as a major component in post WW2 recoveries, then no big deal.
Housing recover is not as fragile as you might think... do further research in the family formation segment... economy will do well DESPITE rising rates and DESPITE rising Dollar... yep, tightening HAS started. AND, thank-you for the warm welcome... however I must ask you to pls call me Dick.
Sorry to keep repeating myself, but here it is (again):
http://gordongekkosblog.blogspot.com/2010/03/its-going-to-implode-buy-physical-gold.html
The bond market is the backbone of the US Ponzi Finance system.
Agreed--A desperate USGovt/FED could tank equities in the effort to supress climbing commodities, inflation expectations, and rising bond yields, all in one blow.
It would also be a good opportunity to takeover 401(k) & IRA accts, since equities will have tanked. The sheeple will be all-too happy to give the govt their now-worthless retirement accounts to the USGovt in exchange for some guaranteed annuity (hey, wasn't that what social security was supposed to be?...)
I fear that the bond market is more important to the equities market, and the desperate USGovt will remove their equities market props to keep the musical chairs game going...
There is a great likelihood they will try this again - as they did in 2008 - but nobody knows if and to what extent they will be successful this time. History rhymes but it doesn't necessarily repeat.
If they do that, it is game over, isn't it? Social mood will never recover from another blow in the stock market and the governments are bankrupt.
Thats exactly the way I see it truount, at some point here they will have to force people out of the calm Hindu cow stock markets and into bonds. Stocks dont do anything for them, they need that bond money! And its getting real expensive for them to borrow it from themselves, as shown in the direct bid.
All the BS stops at the bond traders doors, they demand higher rates and direct bidders (FED) are soaking up most of these desperate attempts at getting some money to kee the lights on.
This is what a friend of mine is saying today:
My contacts in the real-estate management companies all agree that things have bottomed and/or stabilized.Last week I spoke to some brokers at leading real-estate management/brokerage companies and to management at several publicly traded REITs in order to get a bead on the nonresidential New York City office market.
In terms of categories:
Several large leases at "A" buildings have recently been contracted in the GM Building ($115 per square foot) and Seagram Building ($105 per square foot).
Interestingly, hedge funds appear to be partly responsible for the uptick in commercial space. For example, Och-Ziff Capital Management (OZM), which is located at 9 West 57th Street, is taking an additional floor, and SAC is negotiating for a huge space (100,000 square feett) in the same building. I think the firm is currently at 540 Madison Avenue, where it has vertical space (several floors) but is now seeking a more horizontal (one floor) plan.
SL Green (SLG) has announced a 2% increase in new rental rates effective this Monday. My contacts in the management companies didn't have a sense as to whether this is achievable, but they all agreed that it was a sign that things had bottomed and/or stabilized.
All the evidence we need that it's all about to go into the shitter - again.
Well...I'm sure hedge funds have done very nicely in the last year or so, so it's not surprising they'd be expanding.
What about the other 99.99% of commercial real estate that is not in New York City? Driven around LA lately? Block after block of empty commercial buildings with For Lease or For Sale signs on them.
10-yr note heading to 4.50% on strong economy (real yield), not inflation (tips).
HAHAHAHAAAHAHAHAHAAAHHHAHAHAHAHAHAHHAHAAAHAHAHAHAHAAAAA!!!!!!
10 year yield heading to 8% as every SOB on the planet dumps US bonds because they have no faith in US fiscal condition.
What are you smoking? ;-)
I'll have what he's having. Hey, it's my birthday - make it a double!
Dude , seriously..
Prechter and other assorted dollar-deflationists about to take it up the ass - AGAIN. What was that again? Oh, "It's time to be in the safety of Treasuries...blah, blah, blah". Right.
deflation is correct, wrong benchmark though (Au instead of FRN)
Bill Gross wasn't joking when he said he would rather own stocks than bonds here. He is probably dumping massive supply on the market right the phuck now.
I don't want to own either frankly.
The Titanic is going down folks. Got your Gold lifeboats?
100% Gold.
Bitches.
This is what the US Treasury buyers are funding:
http://wikileaks.org/
At this point repudiating US debt doesn't only make sense financially, but morally as well.
So what is your point specifically? I'm not arguing over whether or not the incident in the video should or should not have happened. There are too many variables and it is too easy for us to sit back in the comfort of our homes and judge the actions of people in a hostile environment.
Oh, that explains it - "too many variables". That should explain pretty much everything in the entire goddamn universe. You can go back to watching American Idol now.
I'm sorry you took it as a personal attack and felt the need to retaliate. I was truly interested in what you had to say since I generally agree with it.
I was simply stating that my intention was not to get into an argument over the the actions of the video being right or wrong, but as to what specifically you were trying to point out by bring it up in this topic.
But it appears you are much less rational than you try to make out. And anyone that even hints at threatening your view is automatically classified as an idiot American Idol watcher.
I believe GGs point is that he and i and the rest of us ought not finance the killing of innocent folk. Iraqui or otherwise.
Well that is a good point. But surely understand that short of living in a cave you will and always will, either directly or indirectly, finance the killing of innocent folk. There is nothing you can do to stop it, short of revolution which will lead to more innocent lives lost. And there is no guarantee that once this system collapses one much worse will not take its place.
The problem is that those guys posed no immediate threat, even if they did have the weapons they claimed. They should have had some eyes on the ground to confirm that those guys had RPGs before they machine gun'd them from a damn attack helicopter.
And destroying the van that came to help the wounded is just sick. They might as well have mowed down the damn Red Cross.
No, I didn't take it as a personal attack, and neither am I "retaliating" - just saying it as I see it because after watching that video only an American Idol addicted zombie can claim that there are "too many variables" for us to effectively judge what's happening in that video.
I'd be wasting my time. Why toss pearls before swine?
You could have just asked "what is your point" instead of that whole "There are too many variables and it is too easy for us to sit back in the comfort of our homes and judge the actions of people in a hostile environment" thing.
It's just that I don't suffer fools gladly.
There is really only 1 variable, tenaciousj, that is how much 'all is well' BS can be shoved down moron 401K pensioners and casual observers throats to keep them calm as hindu cows while the Treasury rubs its hands cartoon villain style salivating about seizing all their assets.
I was speaking directly to the variables involving the men on the ground and in the air in this specific video. I was not speaking of the reason behind the war or the political goals.
Little off-topic here but S&P revised its assessment of AIG’s stand-alone credit profile to BB up from BB-.
Wonders never cease.
http://www.americanbankingnews.com/2010/04/05/sp-reaffirms-aig%e2%80%99s-nyse-aig-credit-ratings/
Excuse me but who gives a f**k what the S&P says.
Go stick a gold dildo up your ass.
S&P, Moody's, etc...who gives a rats ass about their assesments? None of them ever saw any issues at all over a year ago before the 'collapse'. Lets see...is it BB- or BB+, I'll give it all an F- as nothing but a Ponzi rigged pyramid scheme.
That's the point, stupid. They raised their rating!
WOW! The rating has been raised on the pyramid Ponzi print and pump scheme by the people who never got anything right ever? Thats great!
Good lord, we are surrounded.............by idiots
It would appear the gold GG bought at $1250 has him a little on the edge....
5 year is already starting to collapse, down 6.6% plus today.
Well done Ben.
everyone is selling bonds and buying stocks. The music continues to play...
It occurred to me the other day, that people seem to dismiss the crisis at the state level when talking about funding of the central governement.
I guess I would ask what ZH commentors would say.
But, an investment in sovereign debt must include structural factors which can effect risk. For the US one of these factors is the power of the states relative to the central government. Not in what led up to the civil war perhaps, but the fact that states rights is the corner stone of our nation.
So why do I bring this up?
Any rift between the states and the central government, like the health care bill, is a sign of internal strife. It is a destabolizing factor that increases risk in the nations sovereign (central) issuance of debt.
If the health bill burden is seen as unjustified to the states, what will happen when Washington tries to increase taxes on wages by 20%?
What we are faced with is a struggle for limited resources, and the states, in the end, have the power to not participate in undue or unfair taxation. It would be much more prudent of the states to keep any taxation on wages for its own states benefit.
This leads to a very interesting question;
Why doesn't the central government bail out the states? Provide the states with "free" money, lets say an amount per citizen, and continually support the states and their deficits?
Well there is no "free" money. Our central government is hollow without state support. It is the citizens within these states with constitute the United States of America.
Mark Beck
At this point of the economic recovery cycle we can expect 10-yr notes to go to 4.5%... raising the discount rate will only serve to move funds out of the 10-yr note into the short end (flattening the curve, higher 10-yr yield)... Furthermore, the Fed should not be targeting either the FF Rate nor the Discount Rate, but more usefully the Rate it pays on excess Reserves held at the Fed (yes, something new).
Oh wait...ok...cnbc settled the debate.
"10-Year Treasury Yield Tops 4% on Economic Gains"Jesus, and I was worried.
you all miss the point..
the amount of $$$ in the system....if the bond market breaks.....there is to much $$$$ in the system ..
that $$$ will go after goods..
what is gold & silver..
it is money... always has been.....I can park some cash in south America for 5%
or I can park cash in Iceland for 16%....Everbank...
I have to know the risk......LOL.....I did not louse a dime...LOL
there is something you all forgot..
GOLD & SILVER is money.
I hope this works out well for you.....paladin
And here’s next week’s Treasury auction schedule:
Monday: $28 billion in three-month bills and $29 billion in six month bills, $8 billion in 10-year TIPS.
Tuesday: $26 billion in one-year bills, $40 billion in three year notes.
Wednesday: $21 billion in 10-year notes.
Thursday: $13 billion in 30-year bonds.
As you can see, the US is dumping what used to be a year’s worth of debt onto the market in four days. And because so much existing debt has to be rolled over continuously, we’ll do the same every week for, apparently, the rest of our lives. I’ll go out on a limb and give Round Two to the bond market.
got gold.....LOL
http://dollarcollapse.com/articles/now-start-watching-interest-rates/
So I take it Greece will be a topic of conversation all week then.
this is damm INSANE
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