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Meanwhile, In Investment Grade Bond Land...
Something is afoot in the land of credit markets. As we have been warning for a few weeks, credit appears to have 'turned' in the cycle suggesting equity should not be too far behind; but today's price action is rather stunning. Not only is investment grade credit spreads trading at their widest since the first day of the year, the high-to-low range of the day is huge. Aside from the extreme jump on the opening day of 2013, this is the biggest range in IG credit since Nov 2011. The last time we were at these levels was early 2011 and the rise in range then signaled the start of an extreme correction (from 80bps to over 150bps). Today's over 6bps range (from 76.9bps to 83.3bps) is extreme by any measure. Perhaps it is delta-hedging - since the low spread vol has driven many to the CDS options market for juice but whatever way one looks at it - something significant is changing (for the worse) in credit.
The lower pane is daily range...
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are junk spreads blowing out as well?
Perhaps, "investment grade" credit is being redefined?
Anyone on here work in credit land? I see the hyg green, and lqd barely budging. I see Santelli saying something is malfunctioning in treasury land.
Didn't someone say that Treasury was down to one day's worth of cash a few days back?
Dow is down 103 with 22 minutes to go - I say they bring her back to even before the close...Now where did I put my surprised face.
Maybe its hiding behind the BTFD mask.
But, it does look as if someone is BFTDing.
Yeah, JNK is back to December-ish price levels, maybe even Novermber-ish. 40.30 last time I checked. A couple weeks ago it was looking at nudging up near 42.
I yanked a few months early around 41, but like I said then, I'd rather be a year early on that call than a week late.
Here's a simple Yahoo finance 6 month chart. Notice the "whoops!" on the far right-hand side:
http://finance.yahoo.com/echarts?s=JNK+Interactive#symbol=jnk;range=6m;compare=;indicator=ke_sd+dividend+volume;charttype=area;crosshair=on;ohlcvalues=0;logscale=off;source=undefined;
Houston, we have a problem. Ben will stop MBS purchases and divert all power to the forward shields (divert all 85 billion in monetization to treasuries).
BWHAHAHA
two different yields? Treasuries stay low while everything else gets sacraficed? Is that what you are saying Laws?
yes, guess which "market" yields the muppets will have access to? Very similar to the soviet union. Out in the real world, you will pretend to work and they will pretend to pay you. The end result will be the same. Productive states will stop doing business with unproductive ones and eventually tell D.C., New York, Illinous etc. to go fuck themselves, and the muppets will get to reap the consquences...
mortgage rates havent moved much relative to the Treasuries........ I think if anything the Fed has gone the other way, buying more MBS and less treasuries... if the ""housing"" recovery craters then they will loose their talking points....
I see plenty of foreign/domesic cash keeping real estate propped up for now. Everyone is going to be a "rich landlord" now...
Engage full POMO's, lock taget , FIRE!!!!!!
Im not even mad.
Corporates are blowing out while ten year treasuries are headed down to 1%.
Grandma needed a kick in the face. She was just asking for it.
I'd love to see some Granny who has been impoverished by this, there must be thousands, walk up to Benny and kick him in the nuts. Might be a Rosa Parks moment.
Not quite;
http://www.marketwatch.com/investing/bond/10_year
but again, your optimism is appreciated.
We will see the ten year pushing 1%. Bank on it.
doc they may go up first to spark the event that causes them to go sub 1%
That may be true, but if these corporates continue to blow out like this it may not need too. Right now the 2.25 back down to 1.65 seems like a good trade.
Are the corporations going to fund the MIC and all the liabilities of the U.S. gov? It is halarious because many of these corporations have "no-bid" contracts with the gov. Tell me how that's gonna all go down again?
You know as well as I do that Uncle Sam has no intention of meeting those liabilities. Not in today's dollars anyway.
So they need to print. ergo, sovereign debt (and the money supply) needs to expand...
now where are those buyers, yields looking to close up.
I don't judge my thesis by one day's price action. I know they will print, and I know that 3% on the ten year blows everything up. Therefore I know we will see 1% on the ten year. It may not be tomorrow , it may not be next month , but it will be there. Corporates blowing out are making fixed income investors skittish already. It won't take too much before they run screaming to Uncle Sam.
They dont need to print, they just need to let whats been printed get into circulation big difference. Debt wont looks so bad after 5 years of double digit inflation.......
Just because the inflation bomb hasnt hit their measurements doesnt mean its not runnign hot... In season peaches 2.99/lb, Sirloin 8.99.... etc etc....
That cash (both foreign and domestic) is coming back to the U.S. and buying real estate, and yes, inflation is getting hot(demand for our soybeans and nuts is still very high), yes we could be on another tipping point. I do like your contrarian hypothesis, but I do see cash buyers all over the place. Another win-win for the banks (who ctrol all aspects of real estate anyway).
Now you know that food and fuel isn't inflationary. It's way to volatile. When it comes to inflation the only things that matter are iPads and DVD players.
i've got a floor of 2.05% on the 10yr and a month or so out i see 2.75%
i see your sub 1% scenario as very realistic further out when we are facing the big one.
2.75%? Whoah, I'm getting a nose bleed!
Let's see..... that's about 100 bps higher than it was just a couple months ago..... times 17 Trillion in national debt..... holy crap, Fonz, that's like..... like..... a lot of money!
yup maybe i should push my time frame out to year end but they are going to barf up either a pd or a large insurer.
somehow they will keep the very short term rates very low which is how we finance our debt.
long term, no question, otherwise WWIII. Of course if the dollar dies it's WWIII anyway...
Oh WW3 isn't an 'if' at all, they've already got that fully planned to start.
WW3 is baked in the cards already in my view. There is no escaping it as we are repeating the mistakes of the past. Assuming they were mistakes to begin with.
Not so sure now Doc.Maybe its wishful thinking on my part.
I'm beginning to think the guys over at VT are on to something.
Definite nuke double flash in the photos of the Israeli bombing in Syria.
Did you notice the frantic backpedalling on the Sunday shows over Assad ?
I think we are witnssing the changing of the guard,Big shift in the balance of powers
going on.Who knows what else is going on that we cannot see.
I haven't watched the Sunday shows in a long time so I'm afraid I can't comment. I do find the fact that we outed one of Israel's missile sites fascinating. I don't believe that was an "accident" for one minute.
its foolish to think treasury yields are going north in the near future.............the entire world will be running back to the arms of uncle sam the minute something goes wrong anywhere.........................europe....japan.....the stock markets.................doesnt matter.........treasuries are still THE place for the weary.......until they are not.............................
they are going north. and look at this comeback!
Hambone look! It's beautiful!
I have always maintained that the ten year will be sub 1% before this is all over with.
yes you have. it certainly might.
it's hysterical how gold has been stuck at the same exact level as well as the 10yr.
they are just nailed down. meanwhile stocks rally 130 points
It is stunning to see how they can hold it to a range acceptable to them regardless of what all other markets are doing.
Just shows how absolutely fake everything is, and really always has been.
No shit. I mean fake is not even the word. This is amazing. It's like they have a bit too much happening in equities so they just froze gold and the 10yr until they get it sorted out.
BlowHorn: "Just a slight negative basis, We are way off the lows"
HAHAHA...
Yup, and thanks to central bankers around the world there is an extra $16T of currency floating around.... that'll buy a fuck-load of treasuries.
...and real estate.
Holy Pomo I'll be a homo looks like were going to close red on the day.
We are going to need moar POMO
Gotta love failed central plansters!
Here come 3:30 ramp.... POMO trades have cleared, sell Treasuries , buy equities...ho hum.
MUSTTTT CLOSEEE GREEEEEN
OIL closing green, you know, the other reserve currency.
The Beatles - Ticket To Ride
http://www.youtube.com/watch?v=VMxyK9azXR4 (3:12)
The Beatles-Obla Di Obla Da
http://www.youtube.com/watch?v=LedUjMuTR7Q (3:19)
That clattering sound that you hear in the background is the pumps of the pump-monkeys surging into overdrive. The wheezing sound that is almost drowning out the clattering sound is the gasping breaths of the pump-monkeys trying to make it to 4PM before passing out from oxygen deprivation. The sharp cracking sound that is almost drowning out the other two sounds is the whip being used by the Fed to speed up the pump-monkeys' efforts with 2 minutes to go!
I heard the MSM ask if it was going to be 21 Tuesdays in a row. That guaranteed we were closing in the red. Of course they'd point it out, only to be proven wrong, as to say "Look there's no manipulation going on here" when it does.
If the government or the news told me it was daylight out, I'd have to look outside just to verify. I don't trust a one of them any longer.
Wrong.. IG traded in mid 90s back in February .. But other than that credit weakness is definitely setting up for some nastiness in stox