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Meanwhile The 10 Year...
Is headed for the moon... in yield terms that is. Because if Bernanke's hope was that the handoff from buyers to sellers would be a smooth one, he may want to conference in Kuroda and get some advice on what happens when the bond market is halted limit down.Good thing Bernanke is not a real hedge fund, or else the $35 billion intraday P&L crash (so far), and $250 billion in the past two months, may raise a few eyebrows.
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paging helicopter ben, paging helicopter ben.
thank God no other assets are priced off that thing. Bloomberg was just telling me to buy, buy, buy because of this. that was right after saying a 25 billion dollar right down at some "gold miner thingy" was "good news and put competitive pressures on "all those others who didn't have to do that." or else!
To the moon Alice
Helicopter Ben is now bladeless.
So he did EJECT?
Helicopters don't have ejector seats, if they did the blades would shred the pilot! That's why you're fucked if a helicopter goes down uncontrollably.
LOL, thanks for pointing that out... ;-)
Still...
Imagining Ben ejecting into the blades is pretty cool, ain't it?! ;)
Capt'n Ben: The term for your new interest rate management procedure is 'auto-rotation'.
Scooby says: Rut-Ro
Obama hit the eject button for Ben -
Duh, you have to turn off the blades first.... Response courtesy of Rockefeller education.
Some ejector seats used to eject downwards. Useless for failures during takeoff, but entirely possible.
Unless it's an autogyro.
Kamov Ka-50 does.
Umm...actually...no...he just BAILED OUT! :)
Thanks for lowering my property taxes Ben!!
No, he ejaculated. Done.
Without coin clipping this market is a smoking hole in the ground... politically unacceptable to stop. http://tinyurl.com/mem7o7x
2.65%....... oh shit.
Training wheels are falling off Benny. 150B/mo overt QE sound about right?
Now .......... you are fucked.
OMG, we're all so fucked.
So an almost 1% increase in interest on $16 Trillion of debt is...how much again?
you realize it doesnt work that way right? only new paper sees the higher number. Since they mark to Unicorn any move todate is at best Transitory in nature..... CBO will never account for it in the projections, the moment they do, the real reset begins.
Housing gets vaporized, in a few months... Short term this is extremely bullish for housing as the sheeple will now panic to refi and get into that McMansion before she blows... give it three months to work through the system...
If the banks are paying attention (they arent) it might flush all of that shadow inventory onto the market, but I doubt it.
only new paper sees the higher number.
Muahahaha. Yes, well, all of the existing holders of all of that paper are now motivated to change their minds, aren't they? And markets are (allegedly) "forward-looking", aren't they? One of the points being recurrently made by genuine free marketers is to point out what will happen when the ten year reverts to historic norms (6%). Anyone wanna bet whether we'll see that?
A 6 handle on the TNX equals the end of western civilization as we know it.
You do realize housing is being bought with cash? Rental property requires 20% down, and when it's a foreclosure the delays are extensive, so it's cash. Investors are just flipping those houses back and forth to each other. There are no end buyers.
In short, socioeconomic classes are set...
Well, there's one end buyer at the end of the flipping chain. Question is, are you one of his friends? Or dead meat?
"... only new paper sees the higher number"
Really?
Old paper gets hammered when the price of their "old paper" drops like a rock as interest rates go up.
It can easily turn into a bond selling panic as investors realize that increasing interest rates will make their bonds worthless, unless they can somehow hold them until maturity.
If you are in a bond fund you are fucked!
For a quantification of just how fucked you are read "justobserving's" post which I quote:
"For every 10 basis points move up in the 10 year yield results in a 1% loss in the bond. Every 10 basis point move in the 30 year results in a 3% loss in the bond"
Wasn't the crash that started the Great Depression caused in part by the Fed selling treasuries in the open market due to rising interest rates? What happens if they try to do this again and the people buy up UST because of a good yield? Does the government then owe its debt to the people and not the Fed? If that were true I'm sure they'd have no problem defaulting on us because we were greedy for wanting a ROI.
Closer to $17T now, any additional paper will add to interest and overall the whole mess gets worse.
Please step forward Mr Fonzanoon - the crowd are awaiting your lap of honor. Well called Sir, most did not see this coming and some will be going through the grinder very painfully indeed.
The Stock sell algos will have to unleashed big time now. Are there many shorts to buy it on the way down, or will it be the express elevator?
I think the call actually was 2.35 on a real taper not the threat of one.... something else is in play here, I suspect some highly leveraged stuff is blowing up..... Some hedgies should be backfloating soon....
My exact call was 2.35% by the end of this month and 2.75% within 3-6 months.
I would love to be on here taking victory laps but there is no way I saw 2.65% right here and now. I am also too busy watching the balances on my clients bond allocation dwindle and am trying to get in touch with Bernie Madoff to find out how I can mark to unicorn on their next months statements.
You did call the pre-market bloodbath though. I bow to you Sir. I wasn't sure if it was going to play out like that.
PS Daneric's hasn't posted their call. First time that I can remember that we're approaching 9 EST and nothing yet.
Thanks RSloane, it looks like someone finally woke up the drunk captain and he is trying to steer the ship again. Let's see how long it lasts.
It's funny I was just listening to Cramer pitch regional bank stocks with the premise that they should continue to pay grandma no interest here and bank the spreads on the 5 year treasury. He should just have declared today "punch a grandma in the face day".
No one cares.
Hay fuckhead go to the nearest courtesy phone , you know the green one with QWERTY virtual keyboard...
Look he's picking his nose, Fifty bucks he eats it,,,,your on.. Look at the cash pouring out of that thing.
"We've just lost cabin pressure..."
Seriously, does it take an expert to predict what happens to bonds when Ben stops buying them? Does one need an MBA from Wharton that costs 6 figures to discern this?
If Bennie doesn't step in, this could be it. I've been waiting a loooong time for this chit, but Bennie is only playin'; he's got his hand on the wheel (I think). The next reflate will be truly awesome. The US has more wars to blame others for, but the gold market has to become screwed up, first. When I read from some dork that gold is going to $500, I'm all in.
Ben, you loosing it..once the 10 yrs are at about 3- 3.5% you are done baby...
http://zysites.com/silververitas/
"all engines running . . . commit! . . . liftoff!"
Buicks to the Moon. Youtube it.
Seriously though Ben prints it, Obama builds Buicks, and attempts to fling them to the moon with the world's largest slingshot. StIMuLuS!
Blast off!
http://www.youtube.com/watch?v=MEAyq7WFsl8
http://www.maxkeiser.com/2013/06/kr461-keiser-report-global-financial-ho...
[KR461] Keiser Report: Global Financial Holocaust
Posted on June 22, 2013 by Stacy Herbert
Read more at http://www.maxkeiser.com/2013/06/kr461-keiser-report-global-financial-ho... SY7azJk.99
.
fake assets = fraud
Oh my! I thought Bernanke owned all of these. Maybe some China liquidity problems coupled with spying blowback.
Bernanke ownes a lot of them. His losses are mounting.
There might be no profit transfers from the FED to the Treasury this year.
+1
Gave me quite a chuckle. Thx for that.
My quoted 96% FHA mortgage payment for my manhattan condo has increased $300 per month in the past four weeks.
Its a short sale so we couldnt close fast.
Neither did I rate lock.
I am backing out of the contract this week.
I recommend backing out just for the sake of f*cking the bank...
Price stabilliteeeeee... bitchez.
I upvote you just for raising our battlecry. ;-)
US Treasuries trading with the volatility of Penny Stocks. Welcome to Hell, boys (and girls)!
Somebody get me a cup of coffee STAT!
The fed can overwhelm flow but he has no shot at buying stock to stabilize things if it gets dumped.
This is crazy shit Doc.
Like the ECB, the Fed has UNLIMITED BUYING POWER
Do you honestly believe that this is a "market" reaction and the Fed is not in the driver's seat?
The Fed wants more blood. Bernanke is quoted as saying "Depositors want higher returns on their money" last year.
They want to have their cake and eat it too. Flooding the world with worthless paper that they control and now they want higher returns on the huge amounts of paper they pumped into the system?
The fed has unlimited buying power. Agreed. He can absolutely hit print to infinity and buy every stock of treasury out there. That's called hyperinflation.
The rubber meets the road when the debt starts getting rolled over at higher rates. We all know that.
The fed has one option on the table if they want to bring rates down right now and that is to annihilate stocks, right here, right now.
If they truly want rates to rise, that is fine. Maybe, just maybe they want a credit crisis to bring in true austerity. I doubt it, but maybe that is the case.
Maybe Ben had a nightmare where hyperinflation destroyed all credibility in the US Dollar and the Fed. He would loose control when the people stop accepting his paper. That's the only gig he has. Now he's trying to recreate value for the paper. Stocks need to come down. Speculative money needs to flow into UST.
However, we have higher bond yields and a stock market correction?
walkure, despite what Ben SAYS, he knows damn good and well we are reacing bubble territory in RE and stocks. And inflation (as if he cares) is indeed going up. He does not want to commit suicide but obliterating the USD, and he tries to talk the market "up" to keep it afloat when he exits his printing 85 large per month.
Obviously, reality has bitten. It won't be linear one way or the other, but prices usually revert to the mean. That means interest rates too.
Inflation has not been tamed, only disguised. The market knows it.
The fed does not have unlimited firepower... See Japan... M1 is 2.5T, they are printing a T a year, at some point this will get into M1...... and BOOM.....
They ramp up printing they risk Japan like stability....
That is exactly right. Theoretically they do, but in reality it's already over when they have to use it.
It's like having a shotgun with only one single shot. You can control a whole horde with it, by threatening each and every one to shoot just him, so they are motivated by fear to do as you like. But the moment you fire your one and only shot, you'll have lost your coercive and will be overwhelmed by the remaining gang. It really is that simple.
This has the potential to spiral out of control real fast. CNBS has the same tired old people on spouting buying opportunity. What they don't get is that all the damage in the bond market is spooking people more than the equity market. They also fail to mention that rising rates are going to stop the housing markets dead in their tracks.
It is now time to do the CNBC "we're off our lows" dance. We went from -141 to -138. Salad days are here again!
Doc, what is your opinion on the thought that people will rush even more quickly into buying a house before interest rates go any higher, thus causing more bullishness for RE?
This is an interesting development, but the 10yr priced in $ is still going to par.
student loan debt that is not fixed just got linked to the 10-year note right before this take off in rates.....how unfortunate
or coincidence electric? That is genius. Pure (evil) genius.
BTW, I don't ever believe in coincidences.
I wonder how things would look if CME hadn't lowered margins on treasury futures last week.
CME sees rising volatility in Gold and raises margins, sees the same in Treasuries and lowers margins.
The CME is going to be the bag holder for a lot of banking mistakes. They went along with too much fraud.
'You F--ked Up, You Trusted Us': Talking Ratings Agencies With Chris Hayes
By Matt Taibbi
POSTED: June 21, 11:25 AM ET
Read more: http://www.rollingstone.com/politics/blogs/taibblog/you-f-ked-up-you-tru...
Follow us: @rollingstone on Twitter | RollingStone on Facebook
.
"...That was among the responses of a spokesperson for the ratings agency Standard & Poor's when I contacted him a few weeks ago in advance of a new Rolling Stone feature, "The Last Mystery of the Financial Crisis," which describes the role the ratings agencies played in causing the 2008 crash. The company was genuinely miffed that anyone would impugn its honesty. In one relatively brief e-mail, the spokesperson used variables of terms like "independent," "integrity" and "transparent," upwards of nine times.
Hold that thought.
"The Last Mystery of the Financial Crisis" makes great use of documents uncovered in years of painstaking research by attorneys at Robbins Geller Rudman & Dowd, a San Diego-based firm that was at the forefront of major lawsuits against the industry. The material those lawyers found leaves virtually no doubt that the great ratings agencies like Moody's and S&P essentially put their analysis up for sale in the years leading up to the crash.
I picked some of the more damaging of these documents to ask about. Like for instance, an email from a company executive reading, "Lord help our fucking scam. . . . This has to be the stupidest place I have worked at." " m.t.
Read ....
could this be Chinese banks selling treasuries to get liquidity ..
No one is going to want that garbage now that momo has left the building. Look what they do to stuff that has actual value. Treasuries are at peak bubble and dropping.
Yes, China is selling for sure. Coordinated effort on their part I'm thinking.
dollar should be tanking then..... instead RMB is going down (relatively)...
For every 10 basis points move up in the 10 year yield results in a 1% loss in the bond. Every 10 basis point move in the 30 year results in a 3% loss in the bond.
The fucking Fed is buying. The fucking Fed wants higher returns on their "investments".
Folks, don't be fooled. This is the world of the Fed. The Fed is filled with paper and now they want more blood from us mortals in shackles on the odious debt.
Bernanke is a con artist. First he rope-a-dopes the world into cheap borrowing, recovery on the cheap and now he's tightening the noose.
What about this is not obvious? The fucking Fed is a leach on the planet and Bernanke & Co. are parasites.
They are always in the driver's seat.
http://www.youtube.com/watch?v=QngGvHTOKh4
Read the comments from Brazil.
http://www.youtube.com/watch?v=gMYNfQlf1H8
FUCK YOU BERNANKE!!
DO YOU HEAR THE PEOPLE SING? SINGING THE SONG OF ANGRY MEN?
OFF WITH THE HEADS OF THE BANKSTERS SNAKE!
$250 billion loss and counting at Bank of Ben
Math.....whoudathoud
No problem....we'll just call the printer room for it.
I have faith in Ben, he will average down his loss, keep buying Ben keep buying. Imagine the looks on the faces of the math modelers at the Fed this morning, hilarious, "uhhhh wtf, that can't be right, re-run that model !!!!"
Is that sound I hear houses crashing?
Anatomy of an Irish Bank Bailout,
Taped phone call from inside Anglo
http://www.independent.ie/business/irish/inside-anglo-the-secret-recordi...
Riveting stuff,
More tapes to come,
Wednesday I think,
Reggie Middleton nailed it with his call about Irish banks (re) collapsing.
These people should be drawn and quartered
here is a truthy funny article that the media now unearth, that every "non believer" in the system knew about since donkey's years :
http://www.rollingstone.com/politics/news/the-last-mystery-of-the-financ...
THe last mystery...lol; like Enron and Haliburton in energy. Hype and tripe.
So...we close the door now that the horse has bolted.
But when do we prosecute these multiple scammers who ran off with their bonuses?
Buckle up today at 12.29 Fisher speaks at 12:30 today, high probability of a serious ramp right afterwards..... He has got to try and talk bonds down right?
I take the flip side of that gator. Well at least not a serious ramp anyway. Maybe another pause. I think he comes out and proclaims this rise in interest rates justifies the underlying growth that is taking place in the economy. This is a good thing, and should be celebrated.
Oh and by the way....this is far enough. If anything we have maybe overshot to the upside a bit
fake recovery, fake growth, fake money BUT real interest (earnings) from all that fake shit.
what's not to love when you're a banker?
your absolutely right, he has a chance to disappoint.... I really thing something else is afoot, as you say this has way overshoot, and now I think it is leveraged positions blowing up.... leveraged bond ETFs may have something to do with it.... If you look at TBT alone its ripping at almost a billion dollars a day in volume and I would imagine alot of that is buys, so that is alot of highly leveraged paper....
quarter close this week, wonder if they are going to make a push to put lipstick on the pig...
Is this the beginning?
I fucking hope so...
We've all got our lives to live...
what was that banker name from london who sad that they gonna pop the bond buble on purpose. it was on ZH but i cant find that.
The Bernank has to sacrifice the stock market to get the money back into treasuries. They cannot let the treasury market blow up. That's where the fiat ponzi starts.
jpm fixed income unit earnings have been flat to down. need volume. [/cynical]
CNBC really in 'stock market is da shit don't get out' mode.
Obviously Bernanke failed flight school. Why? Because he doesn't understand the power curve, or being "behind the power curve" as it applies to aviation.
Being "behind the power curve", conceptually in flying means that you can keep increasing the angle of attack, and the engines can be a'screaming, but eventually you'll fall out of the sky because drag increases at a rate higher than the engines can possibly keep up with.
Volcker correctly realized in the late 1970s that the only way to correct this problem was to pitch the economy down, let it liquidate the unproductive activities (ie: commodity speculation), and regenerate itself energy-wise.
Bernanke seems perfectly content to fly right into a stall and probably a crash.
Tsk, tsk.
It's finally come! Time to watch Bernanke and our corrupt politicians SQUIRM! Nothing affects the staus quo more than losing control. And to think, Obami's handlers are going to put him on the national podium this week to sell us on a world wide CO2 tax. Because, greater tax slavery is good medicine that calms the nerves of any tyrant trying to hang on to power. He will show mountains of conviction as this being the "right thing to do"...And the media will parade those for and against to lend credibility to this further abuse of power and confiscation- Think: Obama Care (a mandatory obligation implemented on US citizens by government on behalf of private enterprise...Enforced at the point of a gun).
I agree with Flatburner. Market is uncertain right now, not scared. When the market reaches max fear money will turn to Govy and Gold. If we are following Japan's lead from just a few weeks ago why can't the S&P come down to the 13's?
The great rotation? Into what?
Clownbux, apparently.
http://www.reuters.com/article/2013/06/24/markets-bonds-euro-idUSL5N0F00...
Bunds are going down
Good for German mortgage holders.
the Treasuries reaction to confirmation of QE tapering plans is a bit of a headscratcher to me. i like the BIS paper entry over the weekend which kind of gave me some possible answers as to why the Fed appears to be so intent on starting the tapering. reaction in risk markets is as I expected. I do admit that the growth in the US given sequestration impact fears has been sort of on the impressive end although i understand the argument that the impact of sequestration is still to come. still waiting though.....but back to Treasuries- is issuance rising? is there a shortage of high quality collateral? should there be flight to quality given what we see in risk markets? is inflation rising? is growth outstripping expectations? i totally understand that the expectations of rising Treasury float are natural given taper. nonetheless i am a bit confused about Treasury yields. this may be the canary in the coal mine. if this continues IMHO there will be a lot more risk markets bloodbath to come...a lot more.
Some folks say that July 11th is government take over day. Here's hoping that conspiracy theory is wacko
This was the problem of investing into a 100% manipulated market folks.
Get to work Mr.Chairman... LOLZZZZ