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Demand For 30 Year Stronger Than Expected, Leading To Even More Stock Buying
Following yesterday's poor 10 Year showing, which was stock positive (because apparently less demand for bonds means more demand for broken casino products), today moments before the pricing of today's finally for the week $16 billion 30 Year auction, the DJIA ramped again to fresh all time highs on hopes the 30 year would be disappointing. Yet despite a When Issued trading at 2.99%, the 30 Year actually came better than expected at 2.98%, which should have led to a stock sell off, but instead the ramp USDJPY for any reason algos took over, and the stronger auction led to a spike in the USDJPY which in turn pushed stocks even higher. Yes, that is how the stock market "works" in New Normal when broken signals translate, according to algos which confuse price for yield, into completely illogical moves by assorted asset classes.
As for the 30 Year auction, it was stronger in virtually every regard: a Bid to Cover that came at 2.53, or higher than the 2.49 from April, a high yield of 2.98%, less than the 3.00% previously, and an Indirect take down of 38.8%, higher than April's 31.4%. So much for all those who saw that last hour of trading and extrapolate it through 2020, seeing yet another return of the Great Rotation or whatever.
And result: DJIA all time high, 30 Year higher, USDJPY soaring and VIX green.
The batshit insane "market" continues doing its batshit insane thing.
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I'm getting really fucked off with all this now...
DavidC
PONZI.
'nuff said.
or as Krudlow says GREENSHITS
You know the central bankers either dont know or give a shit OR know exactly what they are doing (to screw the sheeps) when even NORMAL folks like me without any stinkin Ivy league degree NOR any prior employment with GS to realize that this FUCKIN STOCK MARKET is acting like a LUNATIC. Either way, we are so fucked.
"according to algos which confuse price for yield"
Wait an see what happens when it is discovered that bonds are a trading vehicle solely based on price.
This auction just proved that little factoid i do believe.
Oh, yeah, lotso confusion right now, prices trying to pop, an the yield is dropping.
I think we have a bond trading bubble, it's getting the tinge to it now.
"I think we have a bond trading bubble, it's getting the tinge to it now." - maybe, but if low yields are good for this trading vehicle, just think how fucking awesome negative rates will be!
just think how fucking awesome negative rates will be!
We are definitely going to find out.
Expect 10% stock-market tumble: S&P analysts
May 9, 2013, 8:00 AM
The Standard & Poor’s 500 Index notched another record close on Tuesday, bringing the U.S. benchmark to a level more than 11% above its 200-day moving average, compared to a more typical 2.4% spread.
To the analysts at S&P Capital IQ, U.S. stocks look stretched.
http://blogs.marketwatch.com/thetell/2013/05/09/expect-10-stock-market-tumble-sp-analysts/
God Bless America
http://www.youtube.com/watch?v=Nwl4xV6wuRI
better off dead then in the red
...nowwhere left for the money to go.
The "Ease off of easing" scare is past and the "bad news means more QE" is present. Get ready for the crackup boom and the big commodities bull run.
Think about all capital that has nowhere else to go. All the capital that wants (needs) to get out of the EU. Etc. Where else is it going to go?
I agree. Don't short the USD either. At least not in the short term. The next 12 months or so could wind up a real bloodbath for the shorts.
FRNs are in worse shape than Euros. ECB can still play the Eurobond card. There's really no play left for the Fed that won't do them in pretty quick.
So long as the members of the U.S. military are willing to simply go home tommorrow and ignore any orders, you are correct. War has always been negotiation by other means.
Markets can only be manipulated so far for so long. As much as the central planners would like you to be correct, nothing is more powerful than markets.
Unfortunately, war is likely as it's the ultimate scapegoat. Everything under the sun will be blamed for the collapse of the world fiat monetary ponzi except the actual cause, the central planners themselves.
So you are saying "same as it ever was". that's not being very optimistic.
But I am very optimistic... about silver, platinum, gold, and Asia.
War doesn't have to happen as the decision has yet to be made, but the track we're on doesn't seem promising. A huge shift in public awareness must occur within the next year to avoid the central planners from much the world towards WWIII, which is not out of the realm of possibility. Understanding of freedom, free markets, and free banking would have to be gained by the masses. Even though it seems that most people don't give a crap, it is possible to spread these ideas fast because we now have the technology to do so. Also, there seems to be social stigma against talking of fiat collapse which will probably disappear when the signs of the end of fiat become more apparent, as the motivation will be intense for those in the know to keep their friends and family from dying when fiat collapses.
I see it as a fork in the road and heading in two different directions that couldn''t be more opposite with no inbetween route. Once the FRN/bond/debt/credit supported asset/government/service sector/housing/college/pension/entitlement bubble bursts, those dependent on these things that are unable to quickly adapt will be destitute and cry for the government to "help" at the top of their lungs. If these cries are answered and the government puts the full socialist redistributive squeeze on the economy, prosperity may never return to the US as it crumbles into oblivian. However, if the free markets are turned to, the US could see a level of prosperity that is almost unimagineable in only a short couple of years.
Regardless of the outcome after the disappearance of fiat in the next year or two, fiat will ineviably show its face again down the road, even if it's 100 or more years from now. There is nothing more tempting to central planners than being able to create currency and distribute to their like. It's the sneakiest and most destructive tax there is and it's essentally a ponzi scheme, and like all ponzies, there are temporary illusionary positive effects at the beginning and the main jolt of the negative effects of the ponzi aren't felt until it collapses.
Thanks for the well thought out post. Really appreciated. And I completely agree. We are approaching a critical juncture.
My concern is that number of people who are dependant on the system is huge. The politicians have managed to create a political class which clearly would rather burn the house down than turn it over. And, the awakening that is needed for us to change course before going over the edge requires "adult" thinking which has been marketed, bred and propodandized right out of most people. Too many still divided on lesser issues.
I guess you could say that I haven't much faith in humanity growing up to the degree that is necessary to deal with the breadth and depth of the lies and broken promises. I fear we will not blink and will be going directly into the event horizon with, light you said, the average person screaming for more.
The irony of the population bearing the final blame for the ponzi is simply disgusting. Nonetheless, I will be crossing my fingers that we pause and wise up before it is too late. I suppose there is an outside chance a smaller percentage of the population is enough to make it happen.
Yup, prepare for the worst, hope for the best, and bring in as much honest wealth in the greatest, swiftest transfer of wealth ever. If capitalism and free markets win out there will be tremendous opportunity in the US to put that newly gained wealth to work and if not, put it to work somewhere else, and if that's not possible hopefully you've scooped enough wealth to live comfortably without working.
I am bullish on PMs, but certainly not any place on earth where you have people packed in like lemmings. At the end of the day, just like sovereign debt, these are unfunded liabilities. So, to recap. PMs, and New Zealand.
Asia and some emerging markets might do very well with fiat collapse. Those with huge trade deficits will actual be importing goods instead of fiat in exchange for their exports, raising the amount of goods and resources in their country.
Either the politics effectively kill the markets or the markets are going to eventually assert themselves and kill the politics.
Seems to me this battle is raging in plain sight. My money (no pun intended) is on the markets. History seems to lean this way too (lol). But, history also suggests sovereign nations don't survive the process either.
Fuck... this sucks. (my words of wisdom for the day - ha ha).
Soon the printing press will be rendered worthless and the size of government will essentially collapse without the printining press and credit supported assets around to keep government huge. Life isn't always peaches and cream. But you're at a great advantage with seeing the coming changes before they come. While the dramatic shrinking of government will initially be painful, it will eventually be a great relief to the economy without a huge government sucking out its resources.
it will eventually be a great relief to the economy without a huge government sucking out its resources.
You are far too optimistic, when this happens, the resources of the entire net worth of the US land mass,it's peoples, and all other tangibles will be sucked out, and it will be over, America the end of the greatest nation ever by these same parasites.
The EU has no common debt. It is about capital flows, not curreny condition. The question is... where is the capital going to flow? The only game in town is the US, for now, as ugly as it may seem. This is the play the Fed has in motion. EU is toast. Cyprus was the warning sign.
EU will have common debt when they create Eurobonds. The play out of the Euro and into the US is over and capital will flow back into the Euro once Eurobonds are created as the Euro will once again be "safe" from imploding for at least the next day.
That's really hurdle to get over. Requires loss of soveriengty and Europe has a lot of historic tension. Not sure it will fly. But, I would be really damn foolish to think it is not possible. If somehow the EU could muster a common debt, it would definately change the game and the opposite effect I think would occur regarding US markets and the USD!
The EU is about to face the choice of either Eurobonds or a Euro breakup. I don't get the sense at all the the EU is ready to allow a breakup that would very quickly lead to every single country using the Euro going bankrupt and, in turn, an implosion of the world fiat monetary system as a bankrupt Europe would cause mass bank runs and pop the credit bubble.
Is going to be interesting to see how this unfolds. Either way, it is getting harder and harder to kick the can any further. Seems they are reaching that do or die moment for sure. My guess is later this year sometime.
It's tough to say when exactly. The Eurobond decision could come about any time but they will postpone it as long as possible and they are quite exceptional at "kicking."
I see the US bond market in conjunction with commodities priced in FRNs as where the "end game" will first be seen. If yeilds rise, their only reponse is to print more which will only push rates into further negative territory, creating more pressure to exit bonds, and cause a need for even more printing. I always like to tackle it by considering "how long this can possible go on if it's dragged to the max?" My guess is probably only another year or two and it seems down right impossible to go more than 5.
"nowwhere left for the money to go...."
yeah that is the banker/wall street mantra alright...
but anyone buying that worthless shit that thinks their gonna see a "real" return on capital let alone the "return" of their capital has to be a mother fucking fool or a complicit participant in the ponzi....
this shit has gone beyond the absurd...how its lasted all this time still pisses me off and baffles.............
oh, and look at the phony paper price of the only 2 forms of metal trading in a narow range day after fucking day below $1500 and $24...
FUCK YOU BERNANKE AND ALL YOU COCKSUCKER MOTHER FUCKING SOCIOPATH BANKER FUCKS..........
Look on the bright side: the world fiat monetary ponzi bubble has lead to the greatest imbalance of an asset of any meaningful size, silver, to the likes of which the world has never seen. It's much better to be early on this one than late and at least you are ahead of this game and will soon benefit instead of oblivious and will soon get devastated like most.
The best of the best buying 30 year debt paying 5% under inflation. The best management that 2 and 20 can buy.
So much QE it flows everywhere. Until the US dollar crashes.
First Japan, eventually the US.
Rates/yields will remain range bound for the foreseeable future. If 85 billion per month isn't enough to keep all the balls in the air, then the Fed will make it 120 billion dollars per month. Nothing the sheep can do about it (aside from get out of paper and get physical).
Did everyone buy the 5 point dip? Are you conditioned yet?
Art Cashin says the market is "trying to adapt". Almost time to drown some ice cubes this weekend on Mark Grant's yacht and pontificate about how other people's kids are heading off to war soon, which should be bullish.
Unfortunately, no. I was thinking that, just maybe, crap sales figures today might, just might, have left it flat for the day, instead of another, yet another, rampalooza.
DavidC
David after all this, can you think of any macro data or earning data that can derail this market? It would have done so already. The deterioration of the underlying economy no longer has any correlation to the markets. Stocks or bonds. No correlation at all. But like a bunch of monkeys we sit here and wait for the next release of some datapoint to finally slam the markets and confirm everything we have been saying.
Meanwhile everyone I know has their 401(k) on auto pilot and is riding the wave.
Unreal.
Right on Fonz. The mechanisms have been breaking for years and continue to disconnect more each day. Past correlations are, well... history to say the least. The market will be right in the end, in a macro sense. But, on a global scale - this involves dynamics that no one has ever seen before. Shit, captial can move at the speed of light now. Just digital 1' and 0's running scared.
" captial can move at the speed of light now" - True, but to get anything done in the real world you need an army. Good thing the latter can't move at such speeds.
+1. Unfortunately, on our current course I am afraid that is a potential outcome. Damn politicians are clearly hell bent to stay the course until something breaks.
I just hope those 1's and 0's are bangin on the door of JPM's vault today.
Money printing trumps all in the casino.
http://dareconomics.wordpress.com/2013/05/09/around-the-globe-05-09-2013/
love the blog dude, good for a quick euro reality check
The Crash of 29.
The '87 crash...historic.
Internet Bubble 2000
The Lehman moment and subsequent Great Recession of 08.
And now, The Armaggedon devastation of March 9th 2013, The Day the Dow went Red...I remember it like it was earlier today. Chilling times back then. made me stronger though...yep, made me stronger...
In any event, HOW can this be justified? Tylers? Anyone? Meant very seriously...and it looks like the report has made the correct calls if you look at 2000, 09... http://finance.yahoo.com/news/fed-economists-stocks-cheapest-theyve-1433...
so indirects, which r supposed to be other sovereigns govt. and investment funds took down 39% of worthless 30yr treasuries paying 2.whatever %??????
that is some fucking bullshit!
who in the fuck would buy any treasury at this stage in the global debt implosion?????????
SHOW ME WHO!!!!!!!!!!!!!!!!!
See the comment above, treasuries have been reduced to another algo-front-running the Fed trading vehicle. The question is not who's buying so much as it is what is buying and for how many microseconds are they holding those bonds.
"The question is not who's buying so much as it is what is buying and for how many microseconds are they holding those bonds.."
ok, i feel u..but then what is the end result if indedd the algos r quote stuffing even treasury's....if bid/bought then sold instantaneously then in whose lap does that wothless shit eventually rest???? i really trying to understand this bullshit!!!!
FUCK!!!
Desperate money that has no choice. Reaching the point of diminishing returns.
I recall a story from our accountant over here in my business telling about a warehouse that leased space in a bad time at some percent under cost. When a junior employee asked why they would lease the space at a loss, the manager said he would be going out of business slower at that rate. Had enough cash to take the hit on that deal, but not at zero cash flow.
Damn world of innovative finance and broken promises is unwinding in front of us and it's all about cash flow now. Damn game of music chairs getting uglier by the minute.
"Going out of business slower" --- the new winning.
What a wonderful world we live in.
Once the printing press is rendered worthless and these businesses are the only thing feeding the central planning beast, the best thing would be to go out of business as fast as possible and starve the beast.
who in the fuck would buy any treasury at this stage in the global debt implosion?????????
SHOW ME WHO!!!!!!!!!!!!!!!!!
The same one doing it now, Benny and the Feds.
http://www.youtube.com/watch?v=QjUk3Bp16zs
Who gives a shit?
you mean about your less than constructive interrogatory???
nobody....
You know I'm right.
Re. Demand For 30 Year-Olds Stronger Than Expected..
Hardly surprising really - when you stop to consider how many guys there must be that have "had it up to here" with those little trollops from NaughtyNymphettes ... but are not quite ready yet to throw in their lot with those "been-round-the-blockers" at CougarLife.com....
It's only May. Isn't it a bit early for Stocking Stuffers?