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Bonds 101: Yields, Prices, And Inflation

Tyler Durden's picture




 

We recently showed 220 years of US Treasury bond yield history but all too often, the average investor is unfortunately unaware of the relationship between bond yields (interesting on a relative-value perspective) and bond prices (the thing that matters for your portfolio's returns). The two measures are inextricably linked obviously (a higher yield implies a lower price and vice versa) but the relationship is not a straight line - it has 'convexity'. The following charts may help understand the upside-downside changes from 'yield' movements, what the Fed is doing to the relationship, and how inflation expectations impact these changes.

Via Goldman Sachs:

Bonds are loans that investors make to governments, municipalities or companies, which typically pay the investors a fixed rate of interest until the bonds mature and the loans are repaid.

The most well-known US government bond is the 10-year US Treasury bond, which matures ten years from the issue date. Right now, investors can purchase a bond for $100 with a yield of about 1.7%, or about $1.70 per year - almost nothing! But there is a bond market that moves daily, so the price of bonds will move depending on interest rates and the economy.

Although investors can simply hold the bond they purchased until maturity and be paid back what they spent in full (plus the interest they've received), they can also sell the bond before maturity. What they get back, however, will depend on interest rates at the time that they sell. If interest rates have risen, then it will be harder to sell their lower-yielding bond, and they will have to sell it for less than they paid for it. If interest rates have declined, then other investors will want to own the bond, and the seller can charge more than they paid for it. So bond holders don't fare well when interest rates rise.

The other thing that bond holders fear is inflation (which typically motivates rate hikes); when consumer prices rise, the interest investors get from bonds is worth less and less in real purchasing power terms.

 

And the yield varies depending on the maturity or length of the investment. The Fed is having a significant impact at various parts of the 'curve'.

 

Charts: Goldman Sachs

 

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Thu, 04/25/2013 - 21:50 | 3500843 zorba THE GREEK
zorba THE GREEK's picture

Never invest in anything where is upside is minimal and the downside is extreme.

Thu, 04/25/2013 - 22:00 | 3500855 buttmilk
buttmilk's picture

How do you get 133.035 to = 1.7% 10 year yield

I am new at this.

Thu, 04/25/2013 - 22:11 | 3500894 TheDarkKnight
TheDarkKnight's picture

post deleted

Thu, 04/25/2013 - 22:11 | 3500905 Muppet of the U...
Muppet of the Universe's picture

TLDNR - Sry.

 

HEY YOU!  Just wanted to grab someone's attention on the way down - The world's supply of gold is not going to run out in the next few months.  This is nearly impossible.  This is called dip buying, and its nearly over as prices are back at 1500ish.

Do not listen to ZH - They have become charlatans.  Do not let the dealers hoodwink you, they say they have no gold b/c they want you to pay insane premiums.  Why do all of you dunces buy silver eagles when you could buy engel or matthey for < half the over spot cost?  Its all metal - stop being stupid.  In 5-10 years, and more likely 15-30 years, there will be supply issues.  But the economy won't even last that long.  Don't let dealers hoodwink you.  You woke up and learned about investment and barely scratched the surface on finance and asset prices. 

& FFS, the comex isn't going to blow up.  Look at when JPM added its gold position to the comex and when it dumped it?

That would mean JPM lost a fuckshitton of money.  Guess what its actually for the comex reserves, which reflect the price.

Now whether Comex has the stuff or not?  I can't honestly say.  But I would bet a million to one, that you and all you buddies heard comex doesnt have the gold/silver from a bullion youtuber who is prob a phys dealer.

Phys dealers wnt you to think Comex will crash so you buy phys and not paper gold.  It makes them money.  They have a financial reason to make you believe comex = crash.  Remember the banks can print money in zirp environment, they can literally buy as much phys as they want and put in the comex, there was 10 million ounces produced in us alone last year.

China goes long metals b/c china wants a hedge against a us dollar blow up.  But china has to hold dollar if china wants us to buy all their worthless shit.  Its a mutual benefit that will net profit china immensely in 5-10 years.  But right now people just buy on dps and trade paper price in futures., so they can live comfortably.  Get it?

You aren't gonna crash shit by buying phys.  They can PRINT MONEY.   GET IT?  We will have hyperinflation b4 we run out of phys. Get it?  Asset prices and bubbles are everywhere begging you to participate, get it?

Do some more learning, and look to other commodities and assets for opportunity.  The goal is to make money, not sit on a bunch of metal thinking that when the sheeple lose their shit in the fan you'll be rich.  That's fucking stupid.  Money is mostly made b/c the sheeple haven't lost their shit, and you won't make any money if they do.  I know you hate the guy, but for fucks sakes if you had gone for the money bernanke would have made you a small fortune.  & guess what?  Its qe4eva.  They may at some point actually lessen qe, or go one talking about ending it but it will never stop, and even if lessened, will likely go right back to increasing. 

Think don't panic, and then zerohedge will stop posting retarded sht designed to make muppets panic.

Thu, 04/25/2013 - 22:26 | 3500954 akak
akak's picture

Stop your fucking posting spree of this off-topic (and idiotic) bullshit in EVERY SINGLE THREAD!

That is trolling,pure and simple.

Fri, 04/26/2013 - 03:45 | 3501441 JOYFUL
JOYFUL's picture

No akak...this is an excellent post...which I commend UniversalMuppet for bringing to the attention of the assembly - most particularly -

China goes long metals b/c china wants a hedge against a us dollar blow up.  But china has to hold dollar if china wants us to buy all their worthless shit.  Its a mutual benefit that will net profit china immensely in 5-10 years.

...with emphasis upon the middle sentence. The fact that the "WALMART"-ization of the Merikan eConomy has now run it's course is much underweighted in our discussions here...as is the fact that WALMERIKA has become, not Chinas' biggest export trade market...but rather...China's biggest debtor. Because Walmart's dilemma of the moment mirrors Merika's - receipts have dropped below the level at which payables can be processed - in anything near to timely fashion. Which has not gone un-noticed by the creditor....though it clearly has by yourself* - having instead simply projected your own failure of imagination onto the Chinks...who are not stupid...or slow to pick up pon the theme, as most of their financial sector hierarchy was trained in the same temples of financialization terrorism as the stateside jihadists!

Therefore China is a looong way into weaning itself offa the shrunken corpse of Merikan consumer power...and tapped into distant and expanding markets for their goods which go unmentioned in the western media...because delaying the announcement of the pending doom of the formerly 'developed world' is the primary rearguard priority of the financial pharisees' puppet press.

And futher to the Muppets' fistful of ponderables foreign to the imagination of the formerly free FEMA CAMP pre-registrants here....it is my duty to announce that the "MADE IN CHINA" meme of cheap\poor quality merchanise is overdue for retirement too!

...whilst recently traipsing up an down the streets of normal, small and mid-sized Chinese cities, I was agog, as any good big-nosed white-boned Gweilo demon would be, at the quantity and quality of consumer goods available in every storefront for the purchase power of the emergent middle classes there...and after a period of merely availing myself personally of the opportunity to buy clothes n stuff of a much higher standard than I am now used to finding in the 'retail outlets' of the hollowed out west for anywhere near to the same price(though from the same country of origin in most cases!)...

I placed my(silverfoil)thinking cap upon my noggin and came up with the following conclusion:

having advanced well past the point of needing to emulate the  past models of cheap export production for bumping up trade surplus for reinvestment in the domestic economy, the Chinese are now tooled up to produce higher quality goods for (mostly)the burgeoning domestic markets...and have taken in enough instruction in Japanese\German\Anglosphere quality control standards to be ironically now in a position to export their cheapest low quality trinkets to the struggling natives in the Gulagistani zones of the west ...and keep the higher quality trade goods for those export markets which can pay their receiveables on time...and the growing thirst of the Chinese consumer for luxury goods of the type which soon the serfs of the sionist western imperium will only be able to dream of!

*not a critique of yourself though ol son...as I suspect that you are merely, like most here...not of an age able to remember when "MADE IN JAPAN" was a signal to snigger bout the cheap knockoff plastics that filled the dime stores 50 or some years ago in the western lands. Hard to get any kind of historical perspective anymore, in the age of post-journalistic media.

oye akak...tho I enjoy your instant nuklear explosiveness, agin I implore you to save the best of the backpack bombs for the big fish  in the fishy market of false flaggin trollin!

 

Fri, 04/26/2013 - 06:05 | 3501518 RabidLemming
RabidLemming's picture

I mostly lurk... rarely comment... this is one of the best posts I have seen. thank you

Fri, 04/26/2013 - 07:26 | 3501572 negative rates
negative rates's picture

Only 15% of financial advisors, have a fudiciary responsibility. The other 85% are simply traders who are greedy, arrogant, and hyprocritical. They are most definitly on the wrong side of nature on this one.

Fri, 04/26/2013 - 06:55 | 3501578 W T F II
W T F II's picture

J,

 

SPOT ON, EXCEPT for the fanatasy that Chinese domestic consumption will be a robust as you project. They still have around 700 million people down on the collective farm in abject poverty. They NEEDED their pro-formas to work out, which the "Financial Crisis" imploded. That's why they have 40 empty cities. Collapsing Western growth rates were NOT factored in. They believed we could keep borrowing our way to further consumption that they jumped in to the 'debt pool' too. They have a complete domestic train-wreck on the debt side. Think of the "Shadow Banking" system as the proliferation of the 'private placement' debt market in the U.S. Unregistered and hard to track, but completely sucking REAL capital out of the system, most of which is NEVER getting repaid. Such a debt collapse is happening there now. And those events are not "Chinese", "European" or any other label. Those realities are simply a massive DEFLATIONARY, demand destroying, depressive train-wreck, no matter how many subway systems their central-planners undertake...!!

Because of WTO in 1995, we have ceded our production to them, though. And Walmart IS an "Evil Force"...!! But the s#!t is about to hit the fan...BIG TIME...!!

Fri, 04/26/2013 - 07:32 | 3501635 JOYFUL
JOYFUL's picture

While I am more than willing to defer to you insight into what 'they' might have been thinking...as in plannin for...

I would ask you to imagine...the presence of several dozen Los Angeles type urbanations...at the beginning side of infrastructural upgrade...with the populations therein being possessed of more buying power than the rest of Korea\Malaysia\Thailland\&Philippines combined...

and whose entrepenuerial elements are already benefitting in a big way from the(what some might call colonialist)expansion of trade\developmental projects into the African\SouthAmerican\otherBrics areas...irregardless of what the future holds in the medium to long term...I predict that surge can be blunted by external events...but not stopped.

as for the 'other' seven hundred millions not served at the table...that's the flip side of the capitalization of communistic China...greater disparities grownin like topsy!

http://www.atimes.com/atimes/China_Business/CBIZ-01-240413.html

...the biggest under-exploited opportunity in the world right now!

Fri, 04/26/2013 - 09:34 | 3501924 i-dog
i-dog's picture

I stumbled over these insights into Chinese "investment" into another resource area earlier:

http://www.2gb.com/article/alan-jones-comments-22nd-april

http://www.2gb.com/article/alan-jones-comments-april-10th

http://www.2gb.com/article/alan-jones-comments-april-4th

BRICS and Canada, be warned...

 

On another note, to reinforce your points: China now has a middle class that is larger than that of the [former] USA ... and it's still growing. That 700 million in poverty (if you can call farming in some beautiful countryside "poverty"...producing more wheat than the US, Canada & Australia combined!) will continue to shrink from the original 1,100 million in poverty just a few short decades ago.

When I first travelled throughout China in the mid-70s (arguably at the peak of US production dominance), one travelled through stone-age villages and mediaeval cities, passing only bicycles on the roads...while Shen Zhen was a bucolic countryside just across the barbed wire from Hong Kong.

Now, one travels over 6,000 miles of bullet train network, from urban metropolis to urban metropolis, dealing with hightly educated entrepreneurs and savvy traders.

Oh...and the Khazarians have been involved at the highest levels since the time they trained and financed Mao (in fact, since the 17th century - though the Chinese did throw them out, for a period, in 1623)....

Fri, 04/26/2013 - 10:39 | 3502240 JOYFUL
JOYFUL's picture

Correct Dawg...the Chinese haven't even started with their 'distressed assets' buyout program in the wacked out westerworlds...and the joke is, when the real fire sales begin*...all the raft of 'foreign investment screening' blocks to their buyout momentum will be expired instantaneously! Those who talk here about 'keeping their tinder dry' cannot even imagine what firepower exists in the pinyin piggybank - jus waiting for the right moment to ignite!

I thank you for the opportunity to throw one of my favorite links of the moment on screen...

http://www.bearcanada.com/china/jewishmonopoly.html ...a part-i-cul-arily piquant piece, because it contains reference to a forthcomin feature about ..."the use to which the Sassoons, Hardoons and others put their opium profits - the purchase of virtually all of Shanghai and other Chinese cities, and the financing of the Japanese invasion of China."!!

and return the gesture when a reference to a favorite flock of your own...because you can be sure that the Jesuits...along with Capuchins, Dominicans, and a couple o other of the usual suspects were millin around in the background ever since Venetian bankster Polo came back from his sales sojourn with stories of Prester Johns' Kingdom!

*what's particularly hard methinks for outside commentators to get a grasp of is that these foreign ventures are increasingly private and\or private\public consortium investments...the profits from which are flowing largely back into the pockets of the entrepeneurs of the moment...who in turn are splashing cash around in their home grounds like any good ol 'capitalist' oligarch of the former western model was want to do!

Fri, 04/26/2013 - 08:52 | 3501844 waviator
waviator's picture

+1 for Post-Journalistic Media.

As for the rest of it, who the fk knows?

Thu, 04/25/2013 - 22:27 | 3500955 Yellowhoard
Yellowhoard's picture

Uhhh.

You said it Beavis.

Thu, 04/25/2013 - 22:29 | 3500964 IPA
IPA's picture

Ummmmm /sarc

Fri, 04/26/2013 - 00:54 | 3501320 A Nanny Moose
A Nanny Moose's picture

OT: What kinda IPA is that? Did you bring enough for everybody?

Thu, 04/25/2013 - 23:49 | 3501218 MortimerDuke
MortimerDuke's picture

I guess I don't "get it" after all.  Maybe you can write another lengthy post which has no direction or point.  Maybe then I'd "get it".  But maybe I can help you "get it."  There's a difference between "running out of supply," as in forever, and experiencing supply constraints.  On 9/11, were you the moron running around the local Shell station telling people not to worry about the $5 dollar gas because we weren't "running out of supply"?  I bet you were a real help.  Prices react to temporary supply constraints due to unexpected demand - even over short term time frames.  Nobody here has ever said (that I've seen anyway) that we're going to run out of phys permanently next week.  Only that a price-induced demand shock has been completely unanticipated.  So your premise is a straw man.  Which makes the rest of your post muppetry and ass-hattery.

All that said, kudos to you on your comment "They can PRINT MONEY.  GET IT?"  I had no idea.  I did not in fact get that.  It's truly a game changer for me and clears up quite a bit of confusion.  As you say, I need to "do some more learning." 

Thu, 04/25/2013 - 23:55 | 3501237 Pareto
Pareto's picture

hey fuck tard, the more they print and spend the faster your purchasing power diminishes in that currency, and the higher the price of gold will rise to compensate for depreciating purchasing power.  Do you fucking get it?  Fucking ass clown.  Where do you get off thinking you're all that when most on this site have forgotten what you still have to learn.  Comeon, really, you offer this? : "Money is mostly made because the sheeple haven't lost their shit, and you won't make any money if they do."  Read a fucking book not found in the kiddie section of Chapters.

Fri, 04/26/2013 - 02:09 | 3501389 omi
omi's picture

I thought King World News and ZH and few others are just panic sites to force muppets into one asset class.

I say all asset classes are good, it just depends at what price. And please ignore anyone that says only this asset class is good, anything else is bogus.

Fri, 04/26/2013 - 08:20 | 3501731 DrDinkus
DrDinkus's picture

you are looking at the futures contract, not the cash price. right now the cash price is 102-25, with a 1.689 yield. the bond was issued with a 2% coupon, thus the price above 'par'

Fri, 04/26/2013 - 09:04 | 3501917 Hippocratic Oaf
Hippocratic Oaf's picture

'How do you get 133.035 to = 1.7% 10 year yield

I am new at this.'

 

5.30's of 05/01/2023 bullet will give you a 1.70 @ 133.035

Fri, 04/26/2013 - 16:16 | 3503709 spine001
spine001's picture

"How do you get 133.035 to = 1.7% 10 year yield"

From the data, you can calculate that for a new 10 year Note paying with a nominal cost of 100 dollars, if it is priced at 133.035$ with an yield of 1.7%, the bond must have been issued with a nominal yield of 5.306%. For that yield the bond would pay C=2.653$ per semester (notes pay two times per year half the yearly accumulated nominal yield over face value), you then discount the cash flows produced by the bond with the following:

C/(1+y/2) + C/(1+y/2)^2 + C/(1+y/2)^3 + C/(1+y/2)^4 +...+ C/(1+y/2)^20 + 100/(1+y/2)^20

10 years = 20 semesters and y is the current yield to maturity, meaning the 1.7%. y/2 is the semester yield. And 100 is the nominal value of the bond that will paid back at maturity.

This is also called the NPV of the cash flow (excel can calculate this with the formula =npv(rate, cashflow range).

and this gives you 133.035

In summary every time a bond is issued by the FED, it comes out with a nominal rate, if the market rate (discount rate) goes higher than the rate with which it was issued, its price goes below 100 (or below par), if the market rate goes below the rate at which it was issued, then its price goes above par (or above 100). The famous convexity of the yield curve can be easily illustrated using a perpetuity, i.e. the British Consols, which are nver due and pay for ever. The value then of a British Consol is = 1/y, where y is the market rate. Please consider what happens with the value of the Consols when y approaches zero, like now! And also please change y around cero and see how much the value changes and then change y in the same amount but around lets say 5% or the historic value of y (more than 2000 thousand years and equal to the fertility rate of cattle). See the how the size of the changes increases to infinity as y decreases? This is where we are, if the rates go up as they inexorably will, everybody in bonds will loose very quickly. Of course the size of the loss is smalller the shorter the term of the bonds.

Hope this helps newbies!

Until next time,

Engineer

Note: for the mathematicians non-financial, this all comes from the solution of a geometric series of infinite decreasig terms being 1/(1-r) where r is the ratioi of the series.

Thu, 04/25/2013 - 22:05 | 3500891 zorba THE GREEK
zorba THE GREEK's picture

Zorba... you are a retard.

Thu, 04/25/2013 - 22:10 | 3500901 zorba THE GREEK
zorba THE GREEK's picture

"Zorba...You are a retard:"

Hey A-hole...It takes one to know one.

Thu, 04/25/2013 - 22:14 | 3500918 zorba THE GREEK
zorba THE GREEK's picture

Yo.. Zorbas...Cut out the crap, it is very confusing to normal people.

Thu, 04/25/2013 - 21:51 | 3500846 Aeternus
Aeternus's picture

People still trade these worthless fuckin' things?

 

http://www.youtube.com/watch?v=fyklt01lN_I

Thu, 04/25/2013 - 22:04 | 3500880 Aeternus
Aeternus's picture

I believe I have a following of haterous jelly tards who keep down voting me and I can't figure out why, gnome sayin'?

Thu, 04/25/2013 - 22:06 | 3500892 Aeternus
Aeternus's picture

Ahhhhhhhhhhhhhhhh!

Thu, 04/25/2013 - 22:25 | 3500950 Pure Evil
Pure Evil's picture

A powerful warrior is known by the number of his enemies.

Thu, 04/25/2013 - 23:10 | 3501077 Aeternus
Aeternus's picture

Fuckin' A man, FUCKIN' A!

Thu, 04/25/2013 - 22:17 | 3500932 zorba THE GREEK
zorba THE GREEK's picture

There..is that better?

Fri, 04/26/2013 - 04:01 | 3501454 bunnyswanson
bunnyswanson's picture

Videos such as this provoke excitement in vulnerable people.  This is a teaser to people on the edge.

Thu, 04/25/2013 - 21:56 | 3500862 Yellowhoard
Yellowhoard's picture

Run mother fucker run.

Thu, 04/25/2013 - 22:01 | 3500877 Spitzer
Spitzer's picture

Bond bubble 33 years long.. Living on borrowed time

Thu, 04/25/2013 - 22:42 | 3500996 CrashisOptimistic
CrashisOptimistic's picture

Pretty much everyone will die before it pops, too. 

The Fed is buying bonds.  The Fed has infinite money. 

Rents aren't going up.

Just stop thinking this financial bullshit is what it going to "take it all down".  It's not.  Financial this or that is created by decree.  There are no forces of nature as regards money.  Money didn't come from nature.  Supply and demand is not a law of nature.  It's imaginary.

Only oil takes all this down.  If you want to dodge that, buy farmland.

Fri, 04/26/2013 - 07:39 | 3501646 Urban Redneck
Urban Redneck's picture

+1 That is the whole point of the bond business.

Cash Flow- returned income over borrowed time financed by current period excess fiat supply, trading arises because of term and rate mismatch against bondholder needs.

A completely different mindset than profit by speculative capital appreciation (at the institutional level) 

Thu, 04/25/2013 - 22:03 | 3500878 Downtoolong
Downtoolong's picture

Good info for people who are new to words like bonds, yields, and interest. Mila Kunis thanks you. Now if only Congress would read and understand it.

  

Thu, 04/25/2013 - 22:06 | 3500888 TheSilverJournal
TheSilverJournal's picture

Borrowing means someone else has to first save...well those were the old rules anyway. Now borrowing just means the Fed will print it up, no savings necessary!! This little trick will work great until it doesn't and then the central planners that destroy capital try and blame it on capitalism when free markets would clearly never result in rates of a broke country to come down to 0%.

Thu, 04/25/2013 - 22:10 | 3500898 dolph9
dolph9's picture

If you start to understand that only suckers buy U.S. Treasury bonds, you are well on your way to enlightenment.

Fri, 04/26/2013 - 07:48 | 3501663 Urban Redneck
Urban Redneck's picture

Why is someone a sucker if they are greedy and can get in on Uncle Ben's taxpayer funded bond buyback racket and profit?

Why is someone a sucker if they realize that their money is at risk in a bank and there isn't enough gold, silver, or tangible assets to park their multi-billion corporate cash hoard in?

Enlightenment is realizing we all have a different role and path to follow

 

Thu, 04/25/2013 - 22:13 | 3500914 buzzsaw99
buzzsaw99's picture

der, thanx squidly, we er don't know nuttin' about nuttin'. mebbe that's why you get to skim so much profits offa unka sam all the time.

Thu, 04/25/2013 - 22:17 | 3500927 taketheredpill
taketheredpill's picture

Like in Japan 20 years ago.  Little value in 10-yr JGBs at 2%.  

 

Seriously though, US is not Japan and is running out of time with each QE getting less bang for the buck.  Every risk asset seems locked together and gasping to get to new highs.  A lot of the charts look the same with serios tech damage not far below current levels.

 

Maybe 1.40 on US 10s when next crisis hits and then I will go to ground.  Copper break of 345/350 suggests re-test of 200 or lower and Fed is all-in.  

Thu, 04/25/2013 - 22:53 | 3501028 Golden_Rule
Golden_Rule's picture

I agree.  What we're seeing is the market starting to accept that QE will end soon.  Its paradoxical and I think quite comical that ending QE-- a bond buying program-- will cause a flight to bonds.  The dumb keynesian bullshit didn't work though, and the only place people with money are willing to stick their cash in the absence of promised government intervention is in tbills.  The rich are just that much fuckin richer.  I hope bernank cries himself to sleep.

Thu, 04/25/2013 - 22:24 | 3500945 Atomizer
Atomizer's picture

Shhhhh

 

Christine Lagarde’s anal beads don’t sparkle during the moonshine.

IMF Outlines Steps to Energize Global Recovery 

Christian Noyer: Financial Stability Review "OTC derivatives: new rules, new actors, new risks"

http://www.bis.org/review/r130425a.pdf?ql=1

 

Public Image Ltd.- Poptones

 

 Drive to the forest in a Japanese car

 The smell of rubber on country tar

 Hindsight does me no good

 Standing naked in this back of the woods

 The cassette played poptones

 I can't forget the impression you made

 You left a hole in the back of my head

 I don't like hiding in this foliage and peat

 It's wet and I'm losing my body heat

 The cassette played poptones

 This bleeding heart

 Looking for bodies

 Nearly injured my pride

 Praise picnicking in the British countryside

 Poptones

Thu, 04/25/2013 - 22:26 | 3500956 dick cheneys ghost
dick cheneys ghost's picture

another terror incident........this one in Jersey on a train perp is from Ukraine.

2 IED's

Happened a week before Boston and not reported

http://www.nj.com/hudson/index.ssf/2013/04/jersey_city_man_arrested_on_t...

 

Thu, 04/25/2013 - 22:28 | 3500962 q99x2
q99x2's picture

DHSatan

Republican Rep. Jason Chaffetz said Thursday that the Department of Homeland Security is using roughly 1,000 rounds of ammunition more per person than the U.S. Army, as he and other lawmakers sharply questioned DHS officials on their "massive" bullet buys.

Read more: http://www.foxnews.com/politics/2013/04/25/reps-challenge-dhs-ammo-buys-say-agency-using-1000-more-rounds-per-person-than/#ixzz2RX3XEjQV

Thu, 04/25/2013 - 22:35 | 3500983 Pure Evil
Pure Evil's picture

With Janet Napolitano being an ugly fat assed lesbian hippo, I can't quite comprehend her attraction to all those phallic symbols.

Thu, 04/25/2013 - 23:01 | 3501065 Atomizer
Atomizer's picture

My body is so delicious. Every morning, your cranking off a new DNA sample for me to collect. Don’t be bashful, you can motor boat me all day long.

 

/sarc

Thu, 04/25/2013 - 22:33 | 3500979 Yen Cross
Yen Cross's picture

    When the Fed. quits printing fake money? I could delagate (85 billion) reasons why this article is moot!

 Risk F/X is what I trade. Risk F/X seems a lot safer than QE-Infinity. Bitchez, when the monies get controlled, you had better Kiss your asses good-by.

     Fiat is the nasty(honest) part of corruption. The bankster bitches will have "physical <untraceable> notes" ... Always Bitchez>

Thu, 04/25/2013 - 23:42 | 3501199 Real Estate Banksta
Real Estate Banksta's picture

What's the convexity of gold? Who gives a f**k! Phyzzz bitchez!

Fri, 04/26/2013 - 00:02 | 3501252 Yen Cross
Yen Cross's picture

  Convexity of gold.  If something is viewed 'convex' , that means with (open view).

Thu, 04/25/2013 - 23:52 | 3501227 cynicalskeptic
cynicalskeptic's picture

How often in the history of the world have government bondholders actually gotten back the SAME buying power they used to purchase those bonds?   Too often the real rate of inflation exceeds the interst paid on 'safe' government bonds (though you'd never know it using the 'official' statistics.   Much of the time you're lucky to break even.  

The number of bonds that have outright defaulted is also not insubstantial.  Want to buy some gold backed Tsarist Russia bonds?  Backed by one of the longest ruling regimes in Europe (at the time).........

Thu, 04/25/2013 - 23:58 | 3501244 Yen Cross
Yen Cross's picture

 Junk away Anonism GOONS. The history of governments? lol

Fri, 04/26/2013 - 07:00 | 3501577 firstdivision
firstdivision's picture

Duration risk bitches!  Get yourself some.

 

The beauty of the yield curve, is how much the fed is manipulating it through its various POMO's.

Fri, 04/26/2013 - 06:59 | 3501591 W T F II
W T F II's picture

The Fed NEEDS a 'risk-off' CRASH for many reasons...and we'll get it, LIKE NOW...

Fri, 04/26/2013 - 07:00 | 3501592 W T F II
W T F II's picture

The Fed NEEDS a 'risk-off' CRASH for many reasons...and we'll get it, LIKE NOW...

Fri, 04/26/2013 - 07:01 | 3501596 W T F II
W T F II's picture

I am wearin' my "GOT VIX?" t-shirt for the next few days..

Fri, 04/26/2013 - 09:54 | 3502142 RussellB
RussellB's picture

I enjoy seeing articles like this. A lot of articles on this site involve complex financial theories and relationships, so it's good to remind people of the basics time to time. Although many will pretend to fully comprehend everything in these articles, the sheer volume of replies that include one liners including some form of "Bitchez"  imply the full comprehension level is low and they are just skimming the bold parts to support some previously held beliefs. 

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