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Japan's 13 Sigma Bond Swan

Tyler Durden's picture


For six months the Japanese jawboning has seen investors front-running the BoJ, selling JPY and buying whatever risk-asset is the most correlated that day - whether it is the Nikkei 225 or the S&P 500. However, now that words have been replaced by actions, it appears that someone (cough Japanese institutions cough) has decided the 13.4-sigma swing in JGBs last night is just too much and have rotated to US Treasuries. The selling of JPY and buying of EUR (to fund peripheral bond buying) and USD (to fund Treasury buying) is very clear. That means, implicitly, that every ramp higher in JPY (weaker JPY) is simply more bond-buying - which leaves the algos directionless.


If you were a risk-manager, what would you do? And as far as all those VaR risk models - oops!!


It seems the 'sellers' of those JGBs have found a new place to put that capital to work (and in a non-devaluing currency)...


Charts: Bloomberg


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Fri, 04/05/2013 - 14:29 | 3413621 Calidreaming
Calidreaming's picture

I love Sushi

Fri, 04/05/2013 - 14:38 | 3413659 THX 1178
THX 1178's picture

Seeking alpha? Howabout Freaking Sigma!

Fri, 04/05/2013 - 14:45 | 3413685 Dr Paul Krugman
Dr Paul Krugman's picture

It seems the 'sellers' of those JGBs have found a new place to put that capital to work (and in a non-devaluing currency)...

See!  Even Tyler knows that the USD isn't devaluing.

Hint, we are in a deflationary environment.  Thus why the UST yields are dropping.

Fri, 04/05/2013 - 14:55 | 3413715 Poor Grogman
Poor Grogman's picture

We are in an artificial environment thats why gold was dropping

Fri, 04/05/2013 - 14:56 | 3413729 Pinto Currency
Pinto Currency's picture

We are deflating.

Gold at $1600 vs $350 ten years ago.

Oil at $92 vs $30 bbl ten years ago.

and the Constant Commodity Index, let's take a look at that:


Fri, 04/05/2013 - 15:00 | 3413738 Dr Paul Krugman
Dr Paul Krugman's picture

Gold is a fear trade.

And oil is transitory.

Fri, 04/05/2013 - 15:03 | 3413748 Poor Grogman
Poor Grogman's picture

Oil is indeed transitory, on that we can agree...


That Gold is a fear trade  is also  true. Fear of being robbed by .GOV that is.

Fri, 04/05/2013 - 15:03 | 3413753 Pinto Currency
Pinto Currency's picture

And how about the other CCI components?:

Natural gas, wheat, corn, soybeans, copper, cotton, live cattle, lean hogs, coffee, cocoa, sugar, orange juice, silver, platinum?

Fri, 04/05/2013 - 15:09 | 3413772 Panafrican Funk...
Panafrican Funktron Robot's picture


Fri, 04/05/2013 - 15:23 | 3413794 ZerOhead
ZerOhead's picture

Just a silly question here... but what about all of those hundreds of trillions in currency and interest rate swaps back at the unregulated TBTF casino?

Could be some very big winners and some very big losers coming out of these seismic shifts if everyone hasn't netted out exposure properly...

Fri, 04/05/2013 - 22:07 | 3415236 markmotive
markmotive's picture

These policies is less likely to work in our era.

Niall Ferguson on the death of Keynesianism in Japan and around the world:

Fri, 04/05/2013 - 15:14 | 3413798 Pinto Currency
Pinto Currency's picture



Transitory like the $12 trillion added to c.b. balance sheets.

Transitory like the M1, M2, M3 money stocks that have shot through the roof

Fri, 04/05/2013 - 19:54 | 3414822 butchee
butchee's picture

Thirteen, fourteen.....whatever it takes.

Sat, 04/06/2013 - 13:11 | 3416398 Pinto Currency
Pinto Currency's picture


The banks are printing like mad to fight the deflation of their debt/bond bubble.  Every thing else is inflating:

The balance sheets of 8 central banks combined.

Fri, 04/05/2013 - 15:12 | 3413783 Poor Grogman
Poor Grogman's picture

Bigger picture required

Fri, 04/05/2013 - 15:16 | 3413801 McMolotov
McMolotov's picture

Biflation, bitchez. The stuff you need (like food) costs more; the stuff you already own (like a house) or don't want/can't afford (like a yacht) costs less.

Fri, 04/05/2013 - 17:10 | 3414304 Random_Robert
Random_Robert's picture

Yachts cost less now...?

Fuck yeah, bitchez- I know what I'm having for lunch- yacht sandwich with a side order of iPad...



Fri, 04/05/2013 - 15:03 | 3413751 Pinto Currency
Pinto Currency's picture


Fri, 04/05/2013 - 15:11 | 3413780 earnyermoney
earnyermoney's picture

More like a protest trade against the fascist elite running the circus.



Fri, 04/05/2013 - 15:25 | 3413841 css1971
css1971's picture

LOL. Almost as good as MDB.


And soy, wheat, aluminium, copper?

Fri, 04/05/2013 - 15:36 | 3413888 Dr. Kenneth Noi...
Dr. Kenneth Noisewater's picture

Oil is transitory, but gold is forever!

Fri, 04/05/2013 - 15:47 | 3413940 Kirk2NCC1701
Kirk2NCC1701's picture

Krugman:  "Gold is a fear trade.  And oil is transitory."

It's more honest to say:  "The MIC is the fear trade.  And life and peace are transitory." 

And gold is the mistrust & mitigation trade.  Since we're into dropping all pretensions.

Fri, 04/05/2013 - 17:08 | 3414291 americanspirit
americanspirit's picture

If you actually are Dr. Krugman you really should consider the self-preservation value of keeping your idiot mouth shut.

Fri, 04/05/2013 - 21:01 | 3415015 Overfed
Overfed's picture

How about groceries, building materials, car parts and maintenance supplies, tires, household items, cleaning supplies, garden supplies, and durable goods in general? Deflation, my fucking ass.

The only things deflating are my property values, and take home pay.

Sat, 04/06/2013 - 10:08 | 3415043 WhiteNight123129
WhiteNight123129's picture

The only thing transitory is the purchasing power of the dollar....

As for why central bank will fail.


Central bankers have read keynes and know how expectations are important and how managing expectations of the market is important. Now market participants have read keynes too and know how expectations are important and how central bankers are trying to manage expectation.

Do you rationally believe that market participants are going to ignore that when they listent to central bankers. Are we supposed to have read Keynes and now let our expectations get managed when we know the Central bankers are trying to manage our expectations?


Central bankers are supposed to have credibility, it is very important. Ok, how do we reconcile this with point 1 which is that we know that central bankers are trying to manage our expectations??? (telling bullshit for our own´s sake.)

The only thing that transpires from this concept is arrogance, which will result in EPIC FAIL because market participant see right through it.


During the subprime crisis a lot of people in the hedge fund community knew that the thing would blow up, but nobody at the Fed or IMF was smelling the coffee. A lot of guys bought some credit derivatives and in the end the gov and teh Fed had to pony up money to pay those guys. Who is managing the expectation of who? I guess the hedge fund guys are managing the expectations of the Fed instead.



Fri, 04/05/2013 - 14:59 | 3413731 AlaricBalth
AlaricBalth's picture

"The age of financial globalisation has brought us to the verge of this second extreme. The extraordinary growth of financial activity has far outstripped the growth of real economies, leading to the accumulation of financial assets that are largely the liabilities - i.e. the debts - of countries, banks, corporations. The markets are telling us now that this process has gone too far and that a “deleveraging” - i.e. a reduction of the indebtedness - is now required by all debtors, public and private.

The world economy is, in other words, confronted with a “global Triffin dilemma” in which the excessive indebtedness of the issuers of financial assets is now affecting the value of the assets themselves; of all assets, not just of reserve currencies, as in the early Triffin dilemma.

But, how is it possible to carry out this huge process of deleveraging in an orderly manner and without further destabilizing the world economy?

The obvious answer is that it may take time and in any case a longer period of time than that financial markets, suddenly become aware of the unsustainability of the situation, seem willing to concede."

Fabrizio Saccomanni
BIS Working Papers
No 399
Global Safe Assets

Fri, 04/05/2013 - 14:59 | 3413741 Pinto Currency
Pinto Currency's picture


And the BIS was at the center of policies that led to the current debt bubble.

Fri, 04/05/2013 - 15:08 | 3413763 AlaricBalth
AlaricBalth's picture

Actually it was Saccomanni's response/rebuttal to the following paper.

Fri, 04/05/2013 - 15:36 | 3413886 Pinto Currency
Pinto Currency's picture


Fair enough but the BIS has been at the epicenter of gold and interest market rigging now for decades and these concerned analyses are a distratction from what they've been doing.

Fri, 04/05/2013 - 14:55 | 3413724 Pinto Currency
Pinto Currency's picture



Fri, 04/05/2013 - 15:01 | 3413732 Dr Paul Krugman
Dr Paul Krugman's picture


Fri, 04/05/2013 - 15:03 | 3413754 ParkAveFlasher
ParkAveFlasher's picture


Christ this is fun.  +1 Tylers.  Can Banzai dress his head up like a pinata?  No no wait, it's fine, just leave it as is.

Fri, 04/05/2013 - 15:09 | 3413778 debtor of last ...
debtor of last resort's picture

To Hong Kong?

Fri, 04/05/2013 - 15:11 | 3413784 SpiceMustFlow
SpiceMustFlow's picture

I cannot wait to hear the real you spouting your bullshit on MSM when Japan truly hits the windshield.

"Well you see the problem [insert random douchebag here] was that Abe and Kuroda just didn't go far enough."

Fri, 04/05/2013 - 15:13 | 3413789 negative rates
negative rates's picture

Moved, the coo coo clock!

Fri, 04/05/2013 - 15:03 | 3413750 slightlyskeptical
slightlyskeptical's picture

I agree with you. But how is buyimng MBS from the banks helping us out of this deflationary enviroment? More debt but less money chasing goods is not what we need. Tell your masters to skip the banks and just refinance straight with the people.

Fri, 04/05/2013 - 15:17 | 3413809 Dr Paul Krugman
Dr Paul Krugman's picture

It frees up the banks to loan money to businesses.

Fri, 04/05/2013 - 15:27 | 3413854 McMolotov
McMolotov's picture

You mean it frees up banks to buy stocks, right?

Fri, 04/05/2013 - 15:45 | 3413932 Dr Paul Krugman
Dr Paul Krugman's picture

Prop desks were done away with by the Dodd-Frank Act.

Fri, 04/05/2013 - 15:59 | 3413960 Pinto Currency
Pinto Currency's picture

Total US debt at $56 trillion:

We need more debt.

Fri, 04/05/2013 - 15:57 | 3413979 McMolotov
McMolotov's picture


Fri, 04/05/2013 - 17:32 | 3414375 resurger
resurger's picture


you jest! hahahahahahahaha

Fri, 04/05/2013 - 16:10 | 3414004 eatthebanksters
eatthebanksters's picture

Dodd Frank is a bust....and there is no money flowing to Main Street.  The government can't stimulate consumption.  It's so inneficient it can't add value to anything, quite the opposite, which requires continual additional subsidies from the taxpayer.  It's an ugly downward spiral of no return.  Secondly, TBTF banks are so big and need so much cash to operate and provide returns to shareholders, the only way they can get it in a stagnant economy is by performing outright manipulation and participating in risky investments.  What you have here is a volatile mixture of stupidity and greed and you are part of the equation Dr. Krugman.  When the shit blows up I want to see the look on your face when the uneducated masses come to get you and 'thank' you for all your thoughts and influence on furthering a busted economic and social agenda.

Fri, 04/05/2013 - 20:55 | 3414986 WhiteNight123129
WhiteNight123129's picture

Dear Fake Dr Krugman, let me educate you on Gold.

John Fullarton:

The amount of hoards is not governed by the state of prices, but by the market-rate of (real) interest, which however it may be essentially identified with the rate of profits on capital, it is well known rises and falls in the first instance with every contraction and expansion of the medium through whose agency capital is distributed, where that be money or credit.”


Now about fear aspect, you are partly correct.

John Fullarton

“No person who has ever resided in an Asiatic country, where hoarding is carried on to a far larger extent in proportion of the existing stock of wealth, and where the practice has become much more deeply engrafted in the habits of the people, by traditiuonary apprehension of insecurity and hte difficulty of finding safe and remunarative investments, than in any European commonudity, no person who has had personal experience of this state of society, can be at a loss to recollect innumerable instances of large mettalic treasures extracted in times of pecuniary difficulty from the cofferes of individuals, by the temptation of high rate of interest, and brough in aid of the public necessities, nor, on the other hand, of the facility with which those treasures have been absorbed again, when the inducements which had drawn them into light were no longer in operation.”


Fri, 04/05/2013 - 19:43 | 3414781 Yen Cross
Yen Cross's picture

 McMolotov 1000.01% right.  Does anyone listen to EKM? The primary dealer > toss-A-cross< ?  

Fri, 04/05/2013 - 15:53 | 3413965 Kirk2NCC1701
Kirk2NCC1701's picture

Dr. PK: "It frees up the banks to loan money to businesses."

It turns out that this is not quite accurate either, unless you're talking about the TBTF banks.  If a small business wanted to buy rental property -- even with 50% down -- it turns out, you can NOT get a mortgage.  Comments?

Fri, 04/05/2013 - 18:37 | 3414550 xtop23
xtop23's picture

Velocity is in vaporlock.

The banks are too busy bolstering capital reserves or flipping treasuries. They are preparing for a collapse that they know is imminent.

They are too preoccupied with the above exploits to bother loaning to start ups or finance expansion in existing businesses.

Try again.

Fri, 04/05/2013 - 15:05 | 3413759 earnyermoney
earnyermoney's picture



Fri, 04/05/2013 - 15:12 | 3413787 Bunga Bunga
Bunga Bunga's picture

we are in a deflationary environment.

Didn't Bernanke always boast he has the ultimate tool to fight deflation?

Fri, 04/05/2013 - 15:17 | 3413814 Pinto Currency
Pinto Currency's picture


Never heard the fight deflation part.

Fri, 04/05/2013 - 15:30 | 3413865 Bunga Bunga
Bunga Bunga's picture

If we do fall into deflation, however, we can take comfort that the logic of the printing press example must assert itself, and sufficient injections of money will ultimately always reverse a deflation.

Fri, 04/05/2013 - 17:03 | 3414267 thedrickster
thedrickster's picture


Fri, 04/05/2013 - 15:17 | 3413817 css1971
css1971's picture

And here I thought it was because Ben was buying them all with 85 billion a month.

Fri, 04/05/2013 - 20:39 | 3414957 WhiteNight123129
WhiteNight123129's picture

What an ignorant copy of Krugman you make!!! please educate yourself.

We would be in deflation if the Fed was not compensating the contraction of credit with expansion of money. As for interest rates actually it is a by-product of money printing. In XIX style deflation, what would occur is that there would be a bid of currency for Gold at the central bank and an ask at the mint. When people were asking to redeem their notes for Gold, it would have a similar effect as what happens with the HKD. The HKD is operating like a Gold standard with a bid and ask on the monetary object, there is a bid and ask for the HKD against dollar. When people are concerned about credit quality, you would see in aggregate a redemption of the currency for the monetary object, this would make interest rate rise and precipitate bad credit into bankruptcy even more rapidly.

The Hong-Kong dollar still works like the old currency systems of hte XIX century pegged on Gold. Check this out page 3.

The HKD is a sound currency system, the problem is that it is pegged to a shitty monetary object (the USD) which is neither a proper monetary object nor a proper currency. The USD is somewhat undefined.

As for money printing. Again read fullarton. The money printing itself make interest rate go down, when the money reaches the real economy, the money printing will stop because it would accelerate inflation expectations even further. For now the base money printed goes into finanical assets. (still).

Fullarton 1844. (BTW you are a horrible fake Dr. Krugman)

The process by which the redundant issues of inconvertible government paper (fiat system) act upon prices is exactly analogous to that which is set in motion by an increase of the productive power of the mines (large discovery of Gold in a metallic money system). It is in the discretion of the issuing authority, either to limit the employment of the notes which it sends out to the purposes of a temporary advance in anticipation of taxes, or to issue them for all purposes of state expenditure without making any provision to secure their return. In the former case, there will be no permanent addition to the circulation, nor any power of purchase obtained through taxation alone. In the latter, the issuing authority will be place nearly in the same position with the merchant returning with his double cargo of gold and silver from El Dorado.
          [In that case] the market would take off at part merely such proportion of the importation as had hitherto sufficed for the purposes of consumption, and the rest would all be sent to the mint for coinage, yielding an enormous accession to the importers, who, to the extent of the means thus placed in their hands, would immediately become competitors for every description of productive investment in the market, as well as for all the material which contribute to human enjoyment. But as the supply of such objects of desire is always limited, and would in no way be augmented by this great inundation of circulating coin, the inevitable results would be,
 –First a decline of the market-rate of interest
–Next a rise in the value of land,
–And of all interest-bearing securities
–And lastly, a progressive increase in the prices of commodities generally “



Fri, 04/05/2013 - 21:35 | 3415158 Jafo
Jafo's picture

That is about the only thing that you have got right.  The deflation is so severe that the Fed cannot create electronic money fast enough to offset the collapse in credit.  It would melt down in an incandescent moment if it tried.

A FIAT currency system that is based upon expanding debt will suffer a severe recession if debt creation slows down.  When debt creation goes into reverse it is totally doomed.  There is going to be an outbreak of sound currency in terms of the US Dollar and the Fed is powerless to fight it.

Fri, 04/05/2013 - 15:41 | 3413912 Panafrican Funk...
Panafrican Funktron Robot's picture

Good article on sigmas:

Very good quote in the comments:

"The chances of this event happenning by random occurrence is so devistatingly remote, one can only conclude that the event was deliberately made to happen."

Fri, 04/05/2013 - 17:15 | 3414323 Tao 4 the Show
Tao 4 the Show's picture

Sigma's are for normal distributions and the like. Fat tails are a different story. Probability is so poorly understood that they gave a Nobel prize for Black-Scholes. Quite equivalent to giving Obama a Nobel peace prize.

Fri, 04/05/2013 - 14:28 | 3413623 ParkAveFlasher
ParkAveFlasher's picture

These Japanese are WAY ahead of the curve.

Fri, 04/05/2013 - 14:33 | 3413637 nicoacademia
nicoacademia's picture

they are the curve

Fri, 04/05/2013 - 14:40 | 3413671 redpill
redpill's picture

Confucious say man who jump off cliff first never splats last

Fri, 04/05/2013 - 14:48 | 3413703 max2205
max2205's picture

usa usa usa usa ....barf

Fri, 04/05/2013 - 16:17 | 3414067 eatthebanksters
eatthebanksters's picture

Wonder what Kyle Bass is whispering today...I would love to hear the conversations going on in his conference room.

Sat, 04/06/2013 - 12:14 | 3416239 Pinto Currency
Pinto Currency's picture

Bernanke wisdom courtesy of William Banzai7


Fri, 04/05/2013 - 14:30 | 3413626 El Oregonian
El Oregonian's picture


Fri, 04/05/2013 - 14:31 | 3413629 recidivist
recidivist's picture

Bullish 'topes.

Fri, 04/05/2013 - 14:30 | 3413630 Gene Parmesan
Gene Parmesan's picture

Positively glowing.

Fri, 04/05/2013 - 14:32 | 3413631 Dewey Cheatum Howe
Dewey Cheatum Howe's picture

Exactly what the FED needs to take the accelerator of the QE pedal. World instability is the FED's best friend right now. Best monetary policy they can buy. Moar money velocity from offshore accounts being raided to weakening currencies all around them is their unwind. Just need the O'great divider of men and nations to keep breaking down the societal structures to keep that instability recovery rolling.

Fri, 04/05/2013 - 14:34 | 3413647 nicoacademia
nicoacademia's picture

being the strongest currency is like the plague now.

repeat of dropping the gold standard.

last one out is a rotten egg(best balance sheet).

Fri, 04/05/2013 - 14:32 | 3413633 Headbanger
Headbanger's picture

Daisy.... Daisy......

Fri, 04/05/2013 - 14:48 | 3413702 buzzsaw99
buzzsaw99's picture

HAL, or WOPR, take your pick.

Fri, 04/05/2013 - 15:11 | 3413781 Headbanger
Headbanger's picture


Fri, 04/05/2013 - 14:33 | 3413641 maskone909
maskone909's picture

30y treasuries 2.85 yield
30y mortgage rates 3.64 wtf?
Whats the rate on a 30y mortgage in japan?

Fri, 04/05/2013 - 14:39 | 3413668 Political_Savage
Political_Savage's picture

More accurate to compare the 10y note (or swap rate) when looking at Mortgage Rates - they are more aligned duration-wise.

The primary vs secondary spread has BLOWN out. Thus Chase and Wells are rolling in it.

Fri, 04/05/2013 - 14:41 | 3413673 El Oregonian
El Oregonian's picture

Does it really matter? Although I understand that there are some really HOT properties in the Fukushima Perfecture.

Fri, 04/05/2013 - 14:33 | 3413643 AG BCN
AG BCN's picture

Hello Kitty Bonds. 

Fri, 04/05/2013 - 14:35 | 3413646 resurger
resurger's picture

What a fucking 13.4 woody!

Fri, 04/05/2013 - 14:35 | 3413648 malikai
malikai's picture

No comment on the EURJPY/USDJPY action?

Methinks that's Bruce's signal.

Fri, 04/05/2013 - 14:44 | 3413690 hungarianboy
hungarianboy's picture

Started to following you. Like your models. Can you put EUR/USD live also online like Gold? :-)

Fri, 04/05/2013 - 15:06 | 3413757 malikai
malikai's picture

Many thanks. All the published models are live, including Gold.

We make the Gold model publicly available because we hate seeing gold bugs get burned. The rest are for subscribers.

Fri, 04/05/2013 - 15:35 | 3413890 hungarianboy
hungarianboy's picture

Where can I find the tutorial?

Fri, 04/05/2013 - 15:43 | 3413926 malikai
malikai's picture

It's light and explains the platform, models, and usage. Should be a good start.

Fri, 04/05/2013 - 14:45 | 3413691 hungarianboy
hungarianboy's picture

Deleted - Double post

Fri, 04/05/2013 - 14:36 | 3413652 jubber
jubber's picture

Seems like they bought a hell of a lot of French Bonds today [ATL on 10 & 30] and also a stack of Italian 10 Y, what could possibly go wrong with that?

Fri, 04/05/2013 - 14:36 | 3413654 adr
adr's picture

I woke up in a world I no longer recognize. I must have been abducted or sent through a wormhole to a parallel dimension.

Here is my new favorite "New Normal" quote.

"Facebook Home is the new monetized mobile screen saver," Krishna Subramanian, chief marketing officer for Velti, a mobile advertising company, wrote in a note. "Not because you will see ads on the home screen but because that Facebook Home app will drive increased mobile usage and create an explosion of mobile data that can be tied back into desktop advertising." He added, "Mobile advertising revenue does not need to be tied to simply showing ads on mobile apps … it's bigger than that."

You don't actually need to show a mobile ad to derive revenue from a mobile ad. Somehow monetizing mobile through Facebook is about monetizing the desktop. That Facebook Home will drive increased mobile use, which will drive increased revenue from targeted desktop ads.

My wall now has a giant head shaped hole in it.

Fri, 04/05/2013 - 14:47 | 3413696 Bearwagon
Bearwagon's picture

Tell this Subrakrishna Mantra this:

"I know, that you think you understood what you mean I have said. But I'm not sure, if you comprehend, that what you believe  to have heard is not, what I will tell you now:

(pause) You're fired!"

To hell with fuckbook!

Fri, 04/05/2013 - 14:49 | 3413697 RSBriggs
RSBriggs's picture

Better than your head having a giant wall shaped hole in it, I guess.   Why people use Facebook and just voluntarily hand all their personal shit right directly to the alphabet agencies - for them to laugh at -is beyond me. 

Why not just sign up for an email account directly with them?  At least then you could get a cool email address - e.g. -

Fri, 04/05/2013 - 15:16 | 3413792 ebworthen
ebworthen's picture

Alternate dimension.

I fell into this one somewhere back in August 2001.

I'm pretty sure it was while I was in REM sleep one night, my subconcious was open, and my doppleganger from reality #1,045,033 saw his chance to get the hell out of this one and booted me here.

The world was crazy then, but not bat shit crazy like this one.

Fri, 04/05/2013 - 15:15 | 3413803 negative rates
negative rates's picture

Do you know how click adds on......FACEbook?

Fri, 04/05/2013 - 15:17 | 3413818 Panafrican Funk...
Panafrican Funktron Robot's picture

Well done on making my spirit degrade even further.  Fuck.

Fri, 04/05/2013 - 15:31 | 3413863 Lugnut
Lugnut's picture

See the barll. Be the ball, Danny.

Fri, 04/05/2013 - 17:06 | 3414277 Diogenes
Diogenes's picture

So, one of the world's biggest and most important businesses produces nothing and gets its revenue from ads that don't exist. Their stock is selling at a P/E of 2,707. This is now considered normal.


Fri, 04/05/2013 - 14:38 | 3413658 bnbdnb
bnbdnb's picture

They are buying the ES. TBTF are selling it.

Fri, 04/05/2013 - 14:48 | 3413704 reload
reload's picture

I think thats it: The TBTF & PD`S need buyers to unwind. Deposit confiscation and anything else that can flush money off the sidelines and into the shearing pens are warmly welcomed at this point.

Fri, 04/05/2013 - 14:39 | 3413662 fonzannoon
fonzannoon's picture

So money is coming flooding into treasuries now. Bernak can probably cease QE. The market is doing his bidding for him. Woohoo. We win.

Fri, 04/05/2013 - 14:39 | 3413664 css1971
css1971's picture

US Treasuries are the last stop before gold?

This is going to be... interesting.

Fri, 04/05/2013 - 14:43 | 3413665 ebworthen
ebworthen's picture

Those poor algos.

Japan and Europe buying U.S. Treasuries; a sardonic irony with hints of alternating sadism and masochism.

What a mess, what an absolute mess; savers punished, gamblers rewarded, and central banks shooting each other up with monetary heroin and sharing needles.  Ick.

Fri, 04/05/2013 - 14:39 | 3413667 Cone of Uncertainty
Cone of Uncertainty's picture

I'm turning Japanese

I'm turning Japanese

I'm turning Japanese

Fri, 04/05/2013 - 21:08 | 3415061 WmMcK
WmMcK's picture

You really think so?

Fri, 04/05/2013 - 14:43 | 3413677 lolmao500
lolmao500's picture

Bernanke is winning! QE too! QE = stronger currency! Better than in Krugman's dreams!

/this is what the Keynesians believe

Fri, 04/05/2013 - 14:44 | 3413678 WTF_247
WTF_247's picture

If I were a fund manager I would do what I do every single day:


1.  Wake up, check futures.

1.  Turn on computer

2.  Load up algo programs

3.  If futures are higher, turn on VWAP BUY programs for SP500 with $25mil

3a. If futures are lower , turn on VWAP BUY programs for SP500 with $50mil

4.  Go play golf

5. Get lunch.

6.  Count profits once market has closed.


Todays action off the open shows this is exactly what is happening.  

Open is low, slow move up.  Do not stop until all or most of any loss has been recovered.  Any dip > 1% is a massive strong buy and is basically free money.

Fri, 04/05/2013 - 14:47 | 3413692 Bam_Man
Bam_Man's picture

Japan's bond bomb fuse has been lit.

Fri, 04/05/2013 - 14:58 | 3413737 rubearish10
rubearish10's picture

Yeah and it blows Sunday night!

Fri, 04/05/2013 - 15:14 | 3413791 Headbanger
Headbanger's picture

No no no..   Wednesday when that little fat turd launches his rockets.

Fri, 04/05/2013 - 14:52 | 3413710 buzzsaw99
buzzsaw99's picture

the chinese will buy those japanese bonds. :yuk yuks:

Fri, 04/05/2013 - 14:54 | 3413722 lolmao500
lolmao500's picture

Portugal constitutional court is set to rule in 15 minutes or so if the austerity measures are legal... if they rule against, it's gonna be meltdown mode.

Fri, 04/05/2013 - 15:01 | 3413744 rubearish10
rubearish10's picture

Eyes watchin'!

Fri, 04/05/2013 - 15:15 | 3413800 sudzee
sudzee's picture

Keep us updated. Thx.

Fri, 04/05/2013 - 15:17 | 3413812 lolmao500
lolmao500's picture

Decision in 10-15 minutes. Voting taking longer than expected. This will be close...

Fri, 04/05/2013 - 15:27 | 3413858 lolmao500
lolmao500's picture

Goddamn sissies in their dresses and wearing wigs are late again.

Fri, 04/05/2013 - 15:31 | 3413870 lolmao500
lolmao500's picture

Portuguese Constitutional Court rejects two articles from Government budget - cd have huge implications for application of (no) cuts policy.

Fri, 04/05/2013 - 15:50 | 3413951 lolmao500
lolmao500's picture

The Portuguese constitutional court just ruled that 1.1 billion euros in cuts were unconstitutional.

Fri, 04/05/2013 - 14:57 | 3413728 MaxMax
MaxMax's picture

As Yogi Bera once said, "13.4 sigma events happen all the time".

Fri, 04/05/2013 - 15:15 | 3413796 Headbanger
Headbanger's picture

And "Cash is money too"   What a concept!

Fri, 04/05/2013 - 14:58 | 3413730 Cow
Cow's picture

All right let's just stay calm here!

Fri, 04/05/2013 - 15:13 | 3413790 css1971
css1971's picture

Do you have ANY idea how unlikely a 13 sigma event is?

No? good, cos neither do I. What's more worrying, neither does Google.

Fri, 04/05/2013 - 15:35 | 3413895 Panafrican Funk...
Panafrican Funktron Robot's picture

A six sigma event:

99.99966% of not happening.

A 13 sigma event is, as is sometimes said here, essentially "unpossible".  

Fri, 04/05/2013 - 21:07 | 3415053 WmMcK
WmMcK's picture

The unpossible often has a kind of integrity which the merely unprobable lacks -- apologies to Douglas Adams

Fri, 04/05/2013 - 15:14 | 3413799 Headbanger
Headbanger's picture


Fri, 04/05/2013 - 15:26 | 3413844 Satan
Satan's picture

" I can count to 13 on just one hand "
- Fukishima resident.

Fri, 04/05/2013 - 15:38 | 3413904 Super Broccoli
Super Broccoli's picture

i don't know who it is but if he ran on US tresuries, he must be one hell of an idiot (erm or daytrader ;-)

Fri, 04/05/2013 - 15:55 | 3413978 Paracelsus
Paracelsus's picture

   Ummm....I think there is going to be a few pissed off Japanese grannies when they find out the cupboard is bare,no pension for you sucka-san....

First they glow in the daytime and now this...Ranks a rot !!!

Fri, 04/05/2013 - 15:59 | 3413987 Paracelsus
Paracelsus's picture

   Re Kyle Bass's short position of last few years against japan:

Is that the sound of Bolli corks popping in his office?

Fri, 04/05/2013 - 16:05 | 3414015 Paracelsus
Paracelsus's picture

   Okay,so you've worked hard all your japanese life,paying into your pension fund,loses a little value over the Lehman thing,but no problems,time to take life easy,and WHAMMO.......

This is a culture and society where this is not supposed to happen!


Fri, 04/05/2013 - 16:08 | 3414033 Kirk2NCC1701
Kirk2NCC1701's picture

A: Dark Pools of GS. 

Q: Which GS? 

A:  You figure it out.

Fri, 04/05/2013 - 16:13 | 3414054 Paracelsus
Paracelsus's picture

Well,actually I have heard that they have a mafia,the Yakuza,and the Sumo matches are often rigged just like the boxing matches used to be here.   This is sorta interesting,when the mafias around the planet start getting targeted,does this perhaps show the way for a worldwide payback episode.  Russians get shaken down in Cyprus,Yakuza in Japan,confiscation of mafias assets in Sicily,etc. Thank God there is still a good opium crop growing in Afghanistan...

Fri, 04/05/2013 - 16:24 | 3414106 Downtoolong
Downtoolong's picture

13.4-sigma swing

Rejoice, we truly are living in a time of miracles.


Fri, 04/05/2013 - 16:30 | 3414123 hooligan2009
hooligan2009's picture

abe and kuroda were banned from buying foreign bonds as part of japans meontary policy easing/QE

where "investors" in JGB's switch into non-Japanese government bonds, this represents a "de facto" (de fucto?) implementation of the banned QE policy.

expect this to escalate into capital controls very shortly and the yen to first strengthen back to low 90's and then really tank as the credibility of the laughable krugmanite policy of "nobody has to work because we can just print money, run deficits and get someone else to build bridges to nowhere"

serious question: even though the US government has quandered trillions of dollars on banks, corruption, fraud and poor quality government, would you trust this government to come up with a concerted infrastructure replenishment plan that would be budgeted to cost 8 trillion dollars, escalate to 16 trillion dollars and deliver 1 trillion dollars of value?

japan couldnt do it over the last 25 years..the US either fixes the banks, corruption, fraud and poor quaity government..or pursues Japan down the drain of incompetence (and Keynesian economics)

all aboard to the state of clinton!

Fri, 04/05/2013 - 16:51 | 3414205 Evil Bugeyes
Evil Bugeyes's picture

Black swan dive into a dark, empty pool.

Fri, 04/05/2013 - 17:55 | 3414433 Yen Cross
Yen Cross's picture

   Check this chart out. [IMG][/IMG]
   The first line was 12:00 p.m.(N.Y.).  The second line is closing. Ramapalooza!

Fri, 04/05/2013 - 18:25 | 3414506 hooligan2009
hooligan2009's picture

sterling yen is a fav pair of mine, but its getting harder and harder to juggle 8 parts that all consist of crap currencies, which curency is any good any more now they have all blown out the water by shitty central banks! vietnam dong maybe or kiwi dollar.

seems such a cop-out to stay long marxism is better than closet (krugamnite) marxism

just have to wait til sfr/eur gets a leedle closer to 1.20 and have moar swiss rolls for tea!

Fri, 04/05/2013 - 19:40 | 3414763 Yen Cross
Yen Cross's picture

   Thanks for the link  h-2009. It's all about price action.  Just like ( BTFD @ T-Minus 30 minutes) in N.Y.   Good on ya.

Sat, 04/06/2013 - 07:43 | 3415777 ozzz169
ozzz169's picture

This looks like the beginning of the end for Japan, and seeing exactly what I would expect to see when Japan goes boom....


1) Rise in dollar/drop in US Treasury yields as noted in the article

2) decoupling of Gold from other commodities.  when shit hits the fan buy gold and US Bonds... other metals tend to act like normal commodities in times of crisis and drop accordingly (I think this was noted on zerohedge recently but dont have link).  (gold has been going up with oil going down, pretty good indicator of a problem on the horizon)

3) Volume/volatility starting to spike, as BoJ start to do battle with investor selling.

4) stocks will be trailing indicator I think and will eventually wake up and sell off a bit, and further pushing down US bond rates.


Then another global recession of some magnitude and that is going to really stress Europe......  

Sun, 04/07/2013 - 00:01 | 3417851 MythicalFish
MythicalFish's picture

13 Sigma = As frequently as the spare parts in an automotive salvage lot spontaneously assembling themselves into a McDonald's restaurant?


Maybe you should work for Goldman Sachs' risk desk.

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