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Bernanke Speaks, The Stock Market Squeaks, The 5 Year Shrieks
Things are escalating quickly... with US Treasuries beginning to look a lot like JGBs: the 5Y soared +18bps to the highest since August 2011, the 10Y +13.5bps touches 2.32% widest since March 2012, 30Y +8bps, and credit markets are getting monkey-hammered. There is no joy in Newport Beachville.
5Y the worst!!
Credit majorly underperforming...
Nikkei surged (on JPY weakness) and has corrected (even as JPY remains at its lows)...
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Interest up, gold down? That is not logical!
unpossibly unlogical
this fraud market should be down 6% like the jap market. just look at that 10 year fo fuks sake. lots of CONfidence
The growth move turned out to be fear after-all...
Check out HYG! Good lord.
Neat... Sweet... Petite...
~~~
http://www.youtube.com/watch?v=_YFk4b6yeX4
Sky is the limit on the 10 year.
BigBen has spoken, and now maybe Mr. Market is warming up to (finally) have the last word.
Last word = MMMmmmOOOOOoooAAAaaaAARrrrRRR
First move is to cash from bonds.
Now watch oil, gold, silver, commodities over next couple of weeks.
I'm seeing 2.35%!
http://blogs.barrons.com/incomeinvesting/2013/06/19/10y-treasury-yield-hits-15-month-high-2-35-as-fed-day-ends/
Short interest rate to da moon.
And tangibles with commodities probably will go up too.
If what you say is true, than that goes double for the cost of bread in fiat...
not good either way.
One does wonder if any "representatives" will actually return to Washington now.
But I digress, there are no markets for true price discovery...
there is only the Fed.
End the Fed, nothing changes otherwise.
The Bernank is twitching his head around the reporters like a groundhog peeking out of his hole wary for incoming predators. He wants no part of this. This guy is quivering and getting lambasted and we are supposed to think that the entire financial system depends on this asshole?? We are so FUCKED!
Wow, he stormed out of there like a dog with his tails between his legs.
He had to hurry up and leave in order to try and pin the tail on the ^TNX
That is no way to treat the Emperor of the world
Well, it's a good thing then that he's only the Emperor's water-boy.
Must have been watching the charts on his teleprompter...and his handlers said EXIT STAGE LEFT !!! NOW! EJECT, EJECT, EJECT.
-
The tip, please. I'm many things but always a gentlemen. You have to earn my number, Steve, and you're not nearly as useful a tool as Hilsy, though you are a tool.
Please do not worry.
Too much foo and not enough eggs!
@transacountin,
I think you mean "rots of confidence" as in "rots of ruck"
Interest is up and the stock mkt down, you only get mugged if you go downtown.
-Hank Jr.
Of course now there are plenty of places to get mugged!
A country boy can survive.
Costanza was only in NY city 24 hours and he lost all his clothes. He should have stayed at work for Tyson chicken.
10-year at 2.29. Tower of Babel.
Anyone else think that Michael Bloomberg looks a lot like Julius Caesar?
“In the last three plus years, central banks have had little choice but to do the unsustainable in order to sustain the unsustainable until others do the sustainable to restore sustainability.” - Mohamed El-Erian, Pimco
‘We will learn an enormous amount in a very short time, quite a bit in the medium term, and absolutely nothing in the long term. That would be the historical precedent.’ – Jeremy Grantham when asked if we would learn anything from the 2008 crash.
Other social or economic weaknesses which the modern eye discerns, but which contemporaries had not developed the concept to analyze, or which they simply overlooked, include the enormous differences of wealth, with overconsumption at one end of the scale, grinding poverty at the other, technical stagnation, no new markets, increasing taxation, a growing bureaucracy.” - Colin Wells, The Roman Empire (1984)
That'll be cheap by tonight...
Yes the 10-year achieved 2.35% at close today. Hat tip to Fonz.
‘We will learn an enormous amount in a very short time, quite a bit in the medium term, and absolutely nothing in the long term. That would be the historical precedent.’ – Jeremy Grantham when asked if we would learn anything from the 2008 crash.
Yep.
The diiference is that there are no Johnny fives for gold.
it is logical - positive real interest rates mean i can sell gold and go for interest
In an interest rising market you got killed
Just because interest rates are rising doesn't mean gold is a bad investment. Its all about REAL interest rates. If inflation is running at 10% and you can only get an 8% return on your money, you aren't getting ahead. Thats what happened in the late 70's early 80's. Interest rates were sky high, and so was gold. You want to lock yourself into a 2% ten year bond, if gold is appreciating 15% a year because of inflation?
Correct. And very important to remember; in the absense of a Real Interest Rate; that returns a Real Payment, after inflation; there is nothing to attract a sophisticated investor. And, we'll not see real interest rates for our lifetimes probably; certainly not until after the turmoil surrounding the "Reset" subsides. If you consider that WW11 was the turmoil surrounding the Reset of the German Mark; it might be quite a lot of "turmoil".
Exactly, see my post above. Even a 5 year bond paying 25% would be a bad investment if the price of bread in fiat is going up 400% per year.
Is the market finally going to take away the printing press?? http://tinyurl.com/mem7o7x
It does make sense. The liquidity tap known as QE is being closed. Bernanke will be buying less of his own bonds so demand drops yield increases. Less QE means the inflationary worry is diminishing and with that the demand for gold as a hedge against inflation. Having said that, buying a little PM on the way down will pay off when the big cracks start to show.
Wait, if Bernanke actually does that the whole thing begins to implode and he has to come back and print more. Like someone else said, he might as well print $850 billion a month and stop pretending he has any control over the situation.
Last night I dreamed it was 2023 and Bernanke was still there, giving these press conferences, describing the someday taper, and my yard was full of Chinese dudes.
BernanQE. Someone on another ZH thread named the beast earlier today.
The good news is, increasing UST yields won't obliterate the interest rate swaps derivatives bubble.
Oh wait, it will.
looks like he just blew up the yen
Just another round of political science.
http://www.youtube.com/watch?v=PGO42gvCSPI
Oh it is logical, scared money will move towhere it thinks it can get some payback in the form of interest. So it will sell paper gold and in some cases the physical and buy bonds. But it may not be a real safe move to make though IMHO. "Come into my parlor said the spider to the fly."
Go ahead and TAPER, MOTHERFUCKER.
yes but, they plan for this and fund JPM to keep gold in line.
Gold is actually up $4 after the $12 dollar-denominated adjustment:
http://www.kitco.com/kitco-gold-index.html
+1 thanks for reference.
It's the question of why the interest is up. The interest on a bond traded in the after-market goes up as the sale price of the bond itself drops. the interest is not rising because of any improvement in the issuers ability to pay the interest, or anyone's belief that they will pay it; it's going up because more people are selling the bonds then buying them; that's how prices go down in markets. The Long Bond contract made new lows in price, (the price of the bond), today for the move; which is hardly an encouraging event for the remaining believers in Fiat Magic. For people beginning to experience a shift in perception as Kyle Bass notes, Gold could seem very desirable as you begin to turn in your promise paper from the Treasury.
Mortgage rates now hitting 5% apr at most banks around here....and that 's if you have perfect credit, a solid job and some juicy assets, preferably with that bank.
Otherwise you are looking closer to 7-8% even for "strong" professions like lawyers, doctors, and engineers.
House sales dead in the water...floating like a corpse, not even bobbing up and down anymore.
Arrrrrrrrrrrrrgh!
the move is to cash and the fetal position
All hail!
We figured out who gave the order.
It was Santelli all along!
Yeah, I think Rick gets to do a victory lap on this one. Fed just reached the end of their credibility. Still, the one thing that's caught a real bid today has been the dollar. So go figure.
Also- you may not have to wait for the end of the month for your 2.35 prediction to be fulfilled. You might get it by the end of the DAY.
UPDATE- now 2.32. I'm not kidding, Fonz. We could be at your number in the next 47 minutes at this rate. By the way- I need a change of underwear. I just soiled mine.
The dollar caught a bid today; it was kind of time for that; the FX markets move up and down in cycles; I was already short the Euro and the GBP. The basic idea is the dollar is the least ugly whore in a not very good whore house.
Cramer is going to arrange a meeting. In his territory
@fonz
I keep responding to you too late in the threads to have a conversation. Hope you are good, bro.
All the best to you Cursive. It's good to see the short end of the curve cropdust bernanke as he speaks, eh?
@fonz
I think that Elan (sp?) chick reporterette from WaPo just cropdusted his ass with that did Obama fire your ass question. Oops, now this guy just asked him if Hilsenrath is the real power behind the throne. Catsy!
She blew him up and then a follow up creamed him from some foreign guy. A lotta "UH" happening.
@fonz
LOL. Steve Forbes just said Obama took Ben down Chicago-style in the Charlie Rose interview.
ETA: First time watching CNBS for at least over a year now. Half laughing, half nauseated.
Gee, sounds like the wolves recognize a weak pack member, and are thus using the opportunity to regain street cred in the eyes of the sheeple.
He might just go full-Dwyer after all.
The thirty years made new lows for the move too; and it's been quite a move; the long Bond has got monkey hammered apprx. as much as Silver in the last few months. With the difference, of course, that there's no one on the street buying physical treasury bonds.
Just bought a couple of sovs, cheers Mr Bernanke.
The Bernank is losing control on his way out. Watching this interview it's like he has a monitor giving him the 10 year quote. His voice quivers more every time it drops. I expect him to jump up and say...Holy shit look at that 5 year!
I'm excited for the 3:30pm Hilsenrath leak where they announce QE5 to lower rates from todays 2PM meeting.
Holy shit, 10 yr not off the lows
I believe the word you are searching for is "plummet."
+1 lol
5 year future going over the edge. Kyle Bass, come in, calling Kyle...
http://www.investing.com/rates-bonds/us-5-yr-t-note-advanced-chart
Or print the 10 year below, hold it upside down against a window, and see what message you get:
http://stockcharts.com/h-sc/ui?s=$TNX&p=D&yr=2&mn=6&dy=0&id=p38022803650
Too bad Mel Brooks isn't doing impersonations any more.
Reminds me of the Governor role in Blazing Saddles...precious.
Does Ben have a secretary ?
We've got to save our phoney-baloney jobs boys!!
If you wonder why the comedy from the late 70s and early 80s was GOLDEN, it was because with inflation as it was, you REALLY needed something to laugh at.
Inflation in the 70s was 10% and I got 10% raises. Today I get 2% raises which is even better as long as I don't spend any money.
Geronimo!
2.29 on the 10 year just a few minutes ago.
I think the Fed just ran out of credibility. EVERYTHING is being sold.
Now at 2.33
"I'm surprised how BLASE everyone seems about them."
If you were in a Government Bond Fund you just lost 6% in the last hour. That's unheard-of. YEARS of interest, wiped away in an hour. Hard to be blase about losses like that.
And add in the LEVERAGE too! 20% leverage and a 5% drop wipes you out!
No it doesn't
Please call Pimco, asap; they need your sympathy and support.
Something like that; as Kyle Bass said, peoples perceptions are changing. He didn't "run out" of credibility yet; but this is hardly encouraging for the believers in Fiat Magic.
I think the Fed just ran out of credibility. EVERYTHING is being sold.
They just sold the Zero Hedge shirt off of Bernack's back!
Stop all the clocks, cut off the telephone,
Prevent the dog from barking with a juicy bone,
Silence the pianos and with muffled drum
Bring out the coffin, let the mourners come.
Let aeroplanes circle moaning overhead
Scribbling on the sky the message QE Is Dead,
Put crepe bows round the white necks of the public doves,
Let the traffic policemen wear black cotton gloves.
QE was my North, my South, my East and West,
My working week and my Sunday rest,
My noon, my midnight, my talk, my song;
I thought that QE would last for ever: I was wrong.
The stars are not wanted now: put out every one;
Pack up the moon and dismantle the sun;
Pour away the ocean and sweep up the wood.
For nothing now can ever come to any good.
(With apologies to WH Auden. If you heard a faint whirring sound whilst
reading the above that was him spinning in his grave.)
Horseshit all around. As if anyone believes that a Yellen Fed will dial back on anything. There is no 'restraint' button on the Fedometer. It's pedal to the metal until it all comes apart. Maybe it's now, maybe it isn't, but it will never be because the Fed removed the punch bowl.
Now is it Bernanke's turn to throw Obama under the bus?
You don't honestly think we will close red, DO YOU??
Yes, BTFD is dead.
I sold the S&P500 short last night @1644.5 basis Sept. So far; it's not doing me any harm.
Mission Accomplished!
LOL. The image of that monkey brained fuck wad on the Carrier; what a joke this country has become.
BernanQE looks like a motherfucking train wreck.
This naming the beast has to show up in some mainstream press tomorrow.
@HardlyZero
Everytime BernanQE tries to defend the stock versus flow argument he looks like a preteen who has just found out that Santa Claus isn't real, but he's still got to keep parroting the party line to his little brother.
He's from Prinction, what more would you expect?
LOL. something like that.
Cash bitchez.. it's where it's at.
How do you deal with the constantly decreasing buying power of your "cash". Which is derived from a Chinese word for a Silver trading coin, by the way.
Why even say anything about whether you are going to taper or not. Just do it and tell the market after three months that we have been doing it. Amen!
Everyone will come to the same conclusion. Much like the lady on CNBC of all places said this morning... and even Bill Gross would admit to..
why hold bonds now? it would be idiotic... you'd have to move all your fixed income investments to cash right now .. for a couple years until rates normalize.
It's been idiotic for many years; which is proof, if need be, of the essential lack of original thinking amongst money managers. What are you talking about rates normalizing for? there aren't any rates that are going to "normalize". Who would pay the interest? Wake up please.
Absolutely no news other what has been telegraphed in advance.
Look-out for a snap back (it may be epic) supported by the full faithlessness and credit of the Fed.
This is all done for its "entertainment" value for the watchers and money making churn for the players.
Just try to imagine what kind of blood bath we would have had if the FOMC (God) hinted at an actual tightening move? ROFL! We're all so fucked! If you're still in this 'market', you're either stupid, on drugs, or an HFT algorithm.
By the pricking of my thumbs something wicked this way comes.
Is this the day that the whole world finally runs out of money?
They keep giving him a do over on the asset purchase question. Okay Ben bonds are collapsing..please tell us about the asset purchase plan again.
But BEEEENNN...Inflation is to LOOOOWWWW.
Looks like somebody is pushing back some on the old "don't fight the Fed" meme.
Okay, when they asked me if they were inherited asset purchases, or behavioural asset purchases, we always said it was inherited because that what the scientist proved. But that was FATALITY flawed, it was really behavioural toxic assets that brought down the system and since you were a part of it, now it's time for the cover up. Or are you late to the party?
Like I said before, this is not the Hindenburg Omen. This is the George Zimmer effect.
Zimmer speaks the truth, and the truth gets you out!
Aren't the interest rates rising on both Treasuries and Mortgages, and aren't $45B and $40B a month being purchased by the Fed ? The market sees the Ben wiz behind the curtain ? Market showing part of the truth ?
Who cares, 95% in cash.
Cocktails!
The economy is so rosy that the Fed has to keep pumping to keep it from running away, yeah right.
Basically, they talked down T-Bond prices for a couple of weeks, but will continue to buy $85B of those + MBS.
So, they will now be soaking up even more "good collateral", by volume, causing more problems than before?
Have I got that about right?
+100 SR..now shafting their own asshole..........
yes, the paradox of more QE which is EXTRACTING liquidity from the markets
Interesting observation; it must be true to some extent. What a tangled web we weave when first we set out to deceive.
Next FED ROBO buying! Market will go higher! Ben!
Time to give Abe US citizanship..............
well that's settled. Now, off to war.
Remember when Cramer screamed " they don't know nothing!!" and the FED gave him a discont? Santelly thought that he could do the same this time LOL ! UNfortunately ( for him) the FED only listens to current and ex hedgefund managers!! Oh yes....and his video did not got the same level of attention as Cramer's did.
The timing is lining up perfectly for the S to HTF at the Trayvon Riots when the animals run wild.
Are you prepared?
It's obvious that someone is tossing the entire Fed under the bus. All we need now is for the word "nuke" to emerge, and we'll be right back in the ole shock and awe days.
I always thought Gold would be the safe and correct place to be to avoid Bernanke and all lies and fuckups. Very frustrating to be right about Ben and still not be proved correct.
And you wanted the torch passed right away, SUCKER!
"Something, something, irrational, something something, solvent."
Prices don't mean much when their true discovery mechanisms are destroyed.
Patientce, Chipmunk, patientce.
Stock indexes are very easy to manipulate....bonds...not so much.
Mr. Slaughterer wherever you are, nice call earlier this afternoon. "Go short between the announcement and the press conference" or something like that I believe were your words. You nailed it.
POMO Express right on time!
Once the squid closes its hedges, the market can go higher.
Okay Ben...look at that 5 year...care to clear up the asset purchase plan again...for the fifteenth time?
NO, it's for the first time moron, you missed the boat and are now adrift at sea doomed to never be heard from again, well intelligently at least, you bloody fool!
The smart money bought stocks. The really smart money just arranged more gold delivery from JP Morgans vault.
BTFD!
Markets green before the close!
The FED will QE until the DOW is at 25,000, or higher!
The ends justify the means, and the ends and the means are infinitely fungible!
Did I forget the /sarc tag?
No one knows what in the hell is going on.
The FED says they will taper IF XYZ occurs - which they won't because X, Y, Z, or two of them, or all three won't occur - which means they will forever be gaming the open, the close, and the in-between of every asset class.
"Mr. Bernanke, what are you afraid of!?!?"
If the economy is improving, stop QE and raise rates.
INSANITY!
Will this be Bernanke's last press conference?
BTW gold is being Bernanked as I type.
The US is a much bigger version of Japan. Less productive and more explosive when it does blow.
US Fed is directing Japan's financial recklessness as well as it's own.
Those PhDs at the Fed need to stop experimenting. Put some fiscally responsible people in charge
god damn metals are so cheap right now.
Wrong
Dr Panbernankeglos is guiding the O'Bamana Republic.
Anyone make any money trading this? I broke even on nikei futures after being down 200 pts. My oil short did well.
Why would Gold be down with more junk money printed?
Explained here
Dr Pan-Bernanke-glos guides the O'Bamana Republic.
"put your air in the hands, this is a fuck up!" - that is how I feel about this market ... it's a dyslexic robbery.
Emerging Markets. Entropy, bichez!
It all comes down to (In my opinion,anyways) not what the Federal Reserve can and cannot do but what they have proven they can and cannot do. The history books are out the window now.
-They can buy bonds to temporarily bend the curve and lower overall rates.
-They can buy garbage MBS and such to flush banks with cash.
-Blow bubbles
What they cannot do:
-Create employment
-Cause actual, real improvement in the economy
-Increase demand.
I'm missing some, I know, but I'm pretty certain most on here know what the deal is.
In short, the Federal Reserve cannot do anything real, they can only improve the superficial. Nothing sustainable, nothing fundamental. That is the truth of the matter, so when The Fed says they will taper or not taper only when some random economic indicator gets to a certain number (U.E. at 6.5%) you know they can't really control that, the show must go on. They have tried everything and nothing has worked thus their forecasts are garbage just as they were during every single boom and every single bubble burst.
But I will tell you what, when bonds start to rise and buck about like a rodeo bull, you better believe control will be lost. With no more rounds in the magazine...what will the Fed do then?
All of this stuff is just distraction and window dressing. They won't taper because they have failed, they know the economy is a train-wreck and all they have done is dress it up. That is why they wont end the nonsense. They simply can't.