The Un-Great Un-Rotation

Tyler Durden's picture


If bond yields are higher, according to the endless talking head chatter on financial comedy channels, due to a "stronger economy" and the 'any second now' exit of Fed monetization, we wonder: what do sliding bond yield indicate? (10Y 1.87 handle now -13bps from earlier highs)


Chart: Bloomberg

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Mon, 02/25/2013 - 15:05 | 3274598 dracos_ghost
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Bunga Bunga

Mon, 02/25/2013 - 15:06 | 3274603 Careless Whisper
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The Careless Whisper Macy's/JCPenney/MarthaStewart Breaking News Update & Threadjacking

"We Were, We Were, We Were Friends." Terry Lundgren, Macy's CEO, Testified In New York Supreme Court That He Hung Up The Phone On Martha Stewart After She Told Him Of The JCPenney Deal.

Mister Lundgren Wore A Black Pin-Stripped Suit To Court

PHOTO: Terry Lundgren Outside New York Supreme Court Today

Cramer: Macy's Will Win





Mon, 02/25/2013 - 15:09 | 3274611 Buckaroo Banzai
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Mon, 02/25/2013 - 15:16 | 3274637 resurger
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cant wait

Mon, 02/25/2013 - 15:22 | 3274659 hugovanderbubble
hugovanderbubble's picture

10yrs can be perfectly not zero, NEGATIVE


Remember No Real + Growth or very low + (Deflation from -3 to -10%)


= RISK ASSETS KAPUT per one decade.

Mon, 02/25/2013 - 15:24 | 3274669 resurger
resurger's picture

Zero is the common bitch!

 it keeps the Federal Reserve & The minions happy.

Mon, 02/25/2013 - 15:14 | 3274630 Stoploss
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what do sliding bond yield indicate?


Buy more gold!

Mon, 02/25/2013 - 15:28 | 3274685 CrashisOptimistic
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Gold is insignificant to society and low bond yields are not relevant to it.

Rather, low bond yields are a result of fear in Europe.  The money is returning to where it must be amid Europe worry, US T's.

And let's keep in mind we have 2+% GDP drag pending.  The R word of recession can't be far away, and that should take the 10 yr yield negative.

They still have not embraced the reality of there being no solution.

Mon, 02/25/2013 - 16:07 | 3274811 Stoploss
Stoploss's picture

"Gold is insignificant to society"     Until it is.

LOL! It has a nasty little habit of popping up significantly at the worst possible time.



Mon, 02/25/2013 - 16:38 | 3274961 CrashisOptimistic
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It ever became a threat, transactions of it will be taxed to oblivion.

And you actually know this to be true and deny it.

Mon, 02/25/2013 - 15:15 | 3274635 DoChenRollingBearing
DoChenRollingBearing's picture

Another threadjack...


I just heard on Rush that the US Consumer Protection Bureau is getting more buzz in DC about .gov taking over (well, giving you a guaranteed 3%) the 401k's...  

It's coming...

Mon, 02/25/2013 - 15:44 | 3274731 fonzannoon
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hey dochen do you happen to have a link? 

Mon, 02/25/2013 - 19:23 | 3275678 ceilidh_trail
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I heard him say the same thing today- .gov to our rescue!!!

Mon, 02/25/2013 - 15:45 | 3274734 dracos_ghost
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They're calling them "R Bonds".

Recently went to a Finserv conference and they are scared shitless of this. Most don't think it will happen but those seem to be famous last words.

Mon, 02/25/2013 - 16:13 | 3274832 gaoptimize
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I'm carefully watching this.  If it appears that it is going to happen, I'm out, going Galt, finding a simpler lifestyle in a remote, more Constitution-respecting location until the inevitable happens.  I'll take the 40% tax penalty in one painful blow, rather than be tortured by inflation for God knows how long.  I promised myself 3 years ago that this was a line in the sand/breaking point and I'm sticking to it.

Mon, 02/25/2013 - 17:43 | 3275263 Auntie Lo
Auntie Lo's picture

Amazing this was first proposed in 2009 or so. Trying to get my 401(k) close to home so I can pull it quick when I want to do so. Unfortunately lots of it IS in annuities now and apparently I can't cash those out.

Mon, 02/25/2013 - 16:48 | 3275001 BullsNBeers
BullsNBeers's picture

Fucking scumbags.

First we have to kick in to SSI because we can't be trusted to plan for ourselves. Of course the return of these funds are only a "political promise" and not an obligation so good luck with seeing that money again if you're more than a few years out from retirement. In a right world, taking peoples money against their will and not giving it back is considered theft.

Now we can't be trusted to manage money we have privately earmarked for our retirement?

Why am I not surprised?


Mon, 02/25/2013 - 21:48 | 3276148 Buck Johnson
Buck Johnson's picture

That chart says it all doesn't it.

Mon, 02/25/2013 - 15:05 | 3274600 buzzsaw99
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Someone on here told me to short USTs. You bastards!

Mon, 02/25/2013 - 16:58 | 3275040 Winston Churchill
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You misheard.

Short Greek bonds.if  you can find a counterparty that is.

Mon, 02/25/2013 - 15:06 | 3274604 hugovanderbubble
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Welcome to deflation world vs Central Banks Intervention...

Mon, 02/25/2013 - 15:12 | 3274616 TruthInSunshine
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Ben S. Bernanke's parrot:

"Sqawk!  Stawks higher!  Sqawk!  Virtuous Circle!  Sqawk!  Let my term end before it all comes crashing down!"

Mon, 02/25/2013 - 15:08 | 3274607 Kreditanstalt
Kreditanstalt's picture

Other than the Fed, other central printers, big pension/mutual/"investor"/hedge funds, WHO is so keen on buying these things? 

What if they're wrong?   What if we get a collapse?  Or price inflation?  Or mass unemployment?  Or a run on the dollar? 

Yes, BUNGA BUNGA.    Hahahaha...! 

Mon, 02/25/2013 - 15:15 | 3274634 kaiserhoff
kaiserhoff's picture

No one wants to buy this shit, but as you point out, some funds and insurance companies have no choice.

So, any rise in interest rates bankrupts everyone, including the banks.  Therefore, nothing can ever be allowed to change.

Who but Ben the Bald could fuck up an economy on this scale?

Imagine what this does for Calpers and the rest of those pension retards.

Mon, 02/25/2013 - 16:05 | 3274801 Kreditanstalt
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I'm just saying - what if we DON'T get lasting deflation in prices?  Or what if we also get deflation in asset "values" too?

As it stands, this bond-buying is in preparation for deflationary outcomes.  The big bond-buyers are losing either way: either the buying fails and rates rise OR they slowly get penurized with paltry ZIRP yields...

Mon, 02/25/2013 - 16:18 | 3274855 kaiserhoff
kaiserhoff's picture

Couldn't agree more.  Name your poison.

Mon, 02/25/2013 - 17:58 | 3275369 blindfaith
blindfaith's picture

Deflation in what PRICES...PLEASE tell me.  Nothing I see, eat, drive, wear, watch, communicate with, drink, or anything else shows any sign of DEFLATION.  Bubbles, like housing or stocks, poping is not is realization.  I just mailed a 2 ounce letter to Europe that cost 1.78 two weeks ago, and NOW cost $6.66 at the 'going out of business' Post Office.

The banks are taking a commission buying the bonds with money the FED gives them to buy the bonds with.  They don't care what the yeilds are, they are making money on..."volume".

Mon, 02/25/2013 - 19:34 | 3275730 Kreditanstalt
Kreditanstalt's picture

What deflation???   "On a clear day you can see (inflation) forever..."

INFLATION!!!!!   Doesn't have to be driven by "economic activity".

I'm 40% physical gold, 30% paid-off real estate, 15% PM stocks, 10% cash, 5% collectibles...

Mon, 02/25/2013 - 15:08 | 3274608 hugovanderbubble
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Euro short, ratatatata....

<target 1.10-1.05

Spain and italians bond (10yrs) = 11%

Spain .- NeoJapanizated

Mon, 02/25/2013 - 15:11 | 3274621 walküre
walküre's picture

keep your Euros in a German financial institution just for good measure

Mon, 02/25/2013 - 15:16 | 3274638 kaiserhoff
kaiserhoff's picture

Or in shotguns and silver for better measure:)

Mon, 02/25/2013 - 15:26 | 3274676 hugovanderbubble
hugovanderbubble's picture

I want German Banks to do exactly the same as the whole spanish financial system has done. 

I mean-..." Analyze one by one, doing a Stress Test, with the EBA granted access"



Why German banks are avoiding to be "investigated"???? easy...cos they have exactly the same problem as Spanish Saving Banks, Exactly the same.



Mon, 02/25/2013 - 15:37 | 3274716 walküre
walküre's picture

German banks are worse off. They haven't been able to collect on the bills of exports into the rest of Europe. Germany has exported about 2 trillion worth of goods into the rest of Europe MORE than Germany has imported. The difference is made up with the ECB transfers. But bottom line is that Germany's manufacturing consumed resources and paid wages to produce the stuff they sold on credit to everyone else and they got paid in apples and oranges (literally) and transfer "credits".

Germany had the hard cost of production, money left Germany. Germany cannot collect on the outstanding 2 trillion or the whole ponzi comes crashing down.


Mon, 02/25/2013 - 15:08 | 3274609 _ConanTheLibert...
_ConanTheLibertarian_'s picture

I'd like to see a chart which shows this in context. It's not hard to make an ugly sensational chart is it.

Mon, 02/25/2013 - 15:11 | 3274618 buzzsaw99
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you want an ugly sensational chart?

you bastards!

Mon, 02/25/2013 - 15:18 | 3274645 kaiserhoff
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Plenty of volume.  Stupidity must be contagious.

Mon, 02/25/2013 - 15:20 | 3274650 buzzsaw99
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never downgrade/short a man with a printing press

Mon, 02/25/2013 - 15:39 | 3274721 walküre
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I found some cash under the mattress. Trading the Vix for a good laugh. I don't care if its lost or if it appreciates. It's funny money.

Mon, 02/25/2013 - 15:56 | 3274766 TPTB_r_TBTF
TPTB_r_TBTF's picture

TBT YTD Return:  6.30%

Mon, 02/25/2013 - 15:16 | 3274612 mayhem_korner
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Sliding bond yields means the meme is still alive, and it's telling the sheep there's a temporary/cyclic (not systemic) aberration in the Force.  Either that or sliding bond yields = square root of -1

Mon, 02/25/2013 - 15:09 | 3274613 fonzannoon
fonzannoon's picture

Hurry Everybody to the burning house now!

Mon, 02/25/2013 - 15:11 | 3274615 Super Broccoli
Super Broccoli's picture

so someone is buying that shit ...


let me guess, the same shorting the euro and italian bonds ? it's funny in a way, Bernanke has to print like a mad man to devaluate, here in europe we've got PIIGS ;-)

Mon, 02/25/2013 - 15:11 | 3274619 kaa1016
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Bob Doll on CNBC, "the U.S. is a paragon of strength". Take away $85 billion a month in QE and let's see how "strong" things really are. They actually pay people like him. A lot too...

Mon, 02/25/2013 - 15:11 | 3274620 hugovanderbubble
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Mario Draghi " Ive lost the game" - " I recognise this financial system is the biggest fraud ever done with central banks intervention"- There is no real market- No real transactions- Just Limbo and Algos."

Mon, 02/25/2013 - 15:12 | 3274623 walküre
walküre's picture

just limbo and algos and bunga! lotsa bunga!

Mon, 02/25/2013 - 15:11 | 3274622 monopoly
monopoly's picture

Truly amazing. And idiots buy this market. 

Mon, 02/25/2013 - 15:13 | 3274627 Super Broccoli
Super Broccoli's picture

yeah but i think it's waaaaay too early to drop italian bonds ! you should wait for a 6-7% yield when Goldman Slut force them to vote for someone else ;-)

Mon, 02/25/2013 - 15:14 | 3274624 VonManstein
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USH3 is down over 6% until now. This is no big deal at this stage.

NAS looking increasingly topped however, more so than the other more HFT ALGO driven indexes.

On the sidelines here, except Metal.

I had expected the bottom/top to come at the same time as all the dumb money (managed money) start to unwind the Long ES short GLD thing they’ve had going on. Bullion banks have transferred large amounts of short risk to the hedge funds and are now setting up for the rippa.

The pump and dump continues..

but still.. all the bear chatter only makes this thing go higher. Needs a sizeable break to turn it, I think soon but it may just run up one more time. And when it does happen I think the USD will fall too just like in 2007

Mon, 02/25/2013 - 15:37 | 3274700 CrashisOptimistic
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You are hopelessly stuck in the old normal when humans chattered or heard chatter and humans pumped and dumped.

S&P volume is 1998 levels and HFT is 80% of that.  Your experience in the market was for a market that no longer exists.

Mon, 02/25/2013 - 15:13 | 3274626 Bam_Man
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Everything - including US Treasuries - now trades like a penny stock.

Ain't that great?

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