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It's Not Growth 'Hopes' That Has Backed Up Rates
While the back up in interest rates over the last few weeks has been heralded by those with a bias for these things as some indication of growth expectations improving - confirming the equity exuberance they stand on as sensible; it appears, if one actually takes a look a little deeper into market movements, that in fact this is 'all' about 'Taper' concerns and nothing to do with growth. The driver of this reasoning is straightforward. If the move higher in rates were really about perceived improvement in the growth outlook, we would expect credit markets to rally - as they have during all prior periods of rate spikes. This time is different as they sold off together. Simply put, this is not a growth-driven rate reversion, it is short-term fears (and JGB VaR shock driven concerns) of a Fed worried about bubbles and taking its foot off the throttle modestly.
The past three weeks have seen intraday spread moves correlate extremely closely with rates - suggesting Fed Taper concerns - not growth at all - as the flow may slow.
Chart: Barclays
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Did Kevin Henry have a doctor appointment this morning or something?
The Bernake, where are you? we need a stick save to get this bitch back in the green for tuesday!
Umm, Yes.
If this were a "growth worry", commodities would be a poppin', TIPS rallying and credit spreads compressing.
But Ohhhhh Nooooo!
You're confusing value with growth. We've already destroyed the value of the dollar. How more "growthy" can you get? What you're arguing is why INTEREST RATES are so low...let alone "why lending is soaring on Wall Street" and "equities are going through the roof." for that you need to look at price...hmmmm. "price." the word should be "priceezzzz" because there are always two...a bid...and an ask. "everything else is just blah blee blah."
Bingo.
FEAR. That the Fed will not print as much in the future. Yeah, that's obviously a sustainable way to move 'forward'.. Anyone out there still believe we're NOT fucked?
Being a normal citizen in this economy is pretty much the same as being on the receiving end in the porn industry. Except not in the normal porn industry, some weird perverted freaky shit that makes no sense.
I wonder what type of underground lair that the Bernanke has to hide from us when his term is done.
Ie., the Bernanke BubbleFed has painted us into a corner. And the exit is going to be UGLY, filled with all kinds of "unexpected consequences"!
Correct. fwd 5x5 implied inflation as measured by 5yr and 10yr bonds haven't budget in the last month, actually they went down as macro has not gotten better (other than the April NFP fabricated by the new BLS head - new guy on the job always wants to start with a bang).
Fed needs a correction (10%?) to push rates down and allow for an increase in QE...here it comes. S&P likely driven to 1540, T yield to 1.75% and then Ben's magic soothing words of MOAR will begin the final take off.
A bit contradictory. If there are no growth hopes, then the Fed can't withdraw stimulus.
And if there are no growth expectations, the GDP presumptions in fiscal deficit calculations are wrong which means the deficit will stay high and provide bonds for Bernanke to buy.
Look, all this is bullshit. If there is no growth, none of these projections have any merit at all. Trillions upon trillions of stimulus and no growth.
Withdraw the stimulus and the recession will put people with rifles in bell towers.
It's all about the Fed. When it's buying bonds, investors frontrun it.
http://dareconomics.wordpress.com/2013/06/04/around-the-globe-06-04-2013/
Although when speads get to the stupid levels they have even assuming growth is the object one could not make the assumption spreads would tighten.........
Death & Taxes: Hamilton vs. Jefferson
The problem is the solution…
When you grow up in a big family, large enough to see the entire empire distribution of behavior, you find yourself always at a birth, a wedding and a death. And a funny thing happens when you witness many cycles, moving in spacetime, all ending in death.
The ‘winners,’ those who face death admiraly are not the empire favorites, those who seek immortality in public and peer admiration. Don’t fool yourself; time of death is relative, and fear is a poor substitute for parents.
Easily exploitable resources fuel the empire, and debt assigned to the unborn of civil marriage, another easily exploitable resource, is its oxygen. Rocket science is not rocket science; it’s all around you. Managing gravity is the easy part.
Funny, what happens when people and empires begin to orbit death. At the system threshold gap, conversion in both directions becomes possible. If you look ahead, empire derivative perception, behavior and outcome may be altered, with the necessary catalytic gained in time, and compiled to complete the circuit.
Your foundation is your exit; the empire may only pass through you. Family law, banking, is the timer key, compiled across social class event horizons, charge separation contained by quantum entanglement, until it’s not.
The global economy is rolling over again, and the $30T in digital printing has only served to pull the empire deeper into the dead zone. Faking it until you make it is no substitute for a proper foundation. Repeating history did not help China, or any other nation/state.
The South lost the war because its trading partners preferred federal debt to the cotton backing Confederate currency, for what, by now, should be obvious reasons associated with the imperialist model, which is why many consider Lincoln a traitor. The Civil War, like all wars, was about currency, fear of the future.
The false choice is and always has been centralized vs. decentralized economic slavery, both of which require easily exploitable resources, and neither of which can withstand accountable scrutiny. Selfishness, greed, or whatever you want to call exploitation, in a positive feedback cycle of positive feedback cycles, cannot bring an economy into equilibrium.
Which would you rather own, a warehouse full of cotton or control over future production? If you are labor, the answer is neither.
Skill at timing, logic employed to cultivate instinct, showing up on time, in place and with skill eliminates the need for money, collapsing all the middle controllers in the tax code enabling the event horizons. When you hear ‘whatever it costs,’ you have arrived, deferring all empire income, taxation without representation.
Debt is the MAD insurance cementing the empire, which may only drown itself, if not balanced by independent family income streams. The size, shape, shelves, and noose on the empire determines its perceptions. Some things you just don’t want to know.
So, you are rolling out your developments across a number of generations, which affects majority perception on the derivative side. Spirit, language, is the flux capacitor. Intelligence, mathematics, is the motor inductor. And body, mechanization, is the political resistance. The result is physics, space travel.
Print yourself a circuit. Bend, twist, and strand to get voltage potential. What you see is deductive distillation. Money cannot enable space travel forward; it’s a delay mechanism. Do you see any other critters exchanging money to build a home?
Whether the Fed pulls or pushes on a string, children learn from or teach their parents, or civil law prescribes or distills military law depends upon your perspective. From the perspective of military law, subordination allows civil authority to run its course, which ends in the dead zone every time.
The school system is a sunk cost, we are each responsible for our own health, and families have to take care of their own in old age. That’s just the way it is. Family has outlasted every government in history because it profits from a symbiotic relationship with its environment. An empire shorts it to an artifice, distilling the best to begin the next cycle.
The empire common is wanting the benefits of leadership, but not the responsibility, all chiefs and no indians. The participants hoped that automation was the answer. Exactly wrong, as usual. Adopt any lifestyle you want, but expect to pay; the empire majority is not all-powerful. Spacetime is spacetime wherever you go.
Requiring labor to be licensed to do things the empire way, to make its money, and then denying it licenses is pretty damn stupid, but do what you want; fix it yourself. There is no book on parenting for a simple reason; books, like all media, are derivative in nature.
An empire can exploit a community, with commonality, but only you can build a community, with particularity. AIG and Sony are firefighters setting the global economy on FIRE. Round and round they go, faster and faster, accomplishing nothing, $30T and escalating, to support an artificial world already awash in artificial capacity, orators competing for shrinking space. The majority is its own worst enemy.
Did you really think Japanese kids where going to pay for US retirees when they cannot provide for their own? The majority looks for love in all the wrong places because it accepts the empire assumption of behavior replication. An empire is an extension of gravity, from which life emerges. It’s as simple as that.
“More than a generation of heavy federal spending, it turns out, has provided the seed money for a Washington [DC] economy that now operates globally…The new moneyed brain trust…,” money on the sideline, blah, blah, blah. Got stuff / gravity to burn?
Helllloooo...Mr Market, today is Tuesday. Please reverse. I beg you. Somebody, press the buy button on your money machine.
Sory, I did press Ctrl P but something is broken, people are selling more than I am authorized to buy... Help father B!!! HELP!!!! I started at 2.12 like I was told and have already bought several billion shares, it went up until 2:50, but when I stopped close to my limit, it started coming down again, don't know what to do, I am calling father B but he is busy and they don't let me talk with O. can anybody help me? Can you get me authorized for more purchases??? My POMO allocation is exhausted...
/sarc/