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Someone Is Getting Nervous-est
Another day, another shut government and 1-month T-Bills have surged another 6bps to 18.5bps. Those who read our suggestion from Sept 26 to hedge the political stupidity and debt ceiling debate and put on the 1M1Y flattener have seen the fastest plunge and inversion (to negative!) in the curve since early 2009. Despite the relative calm in repo markets, which is likely due to expectations that any technical default will be for a minim al length, the short-term bills most likely to be affected (the 10/31/13 T-Bills) are seeing the largest daily deterioration yet as traders exit and price in the possibility of missed payment. 1Y USA CDS has spiked by a massive 26bps to 65bps, higher than during the Lehman crisis and second only to Summer 2011.
Putting the 1M1Y move in perspective: fastest flattening since March 2009!
And since the September 26 reco:
Charts: Bloomberg
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No worries the Sheriff is near-er....and he has the President with him.
XD
Crash and burn mutherfuckers!
I don't know about you guys but I'm really missing that OMFG Silk Road/BTC crash!!11 thread.
Just to clarify, the interest you are getting for letting the Treasury hold $1000 of your money for a month has "surged" from 5 cents to 15 cents.
In order for a pensioner to earn a lousy $1,800 a month, that person would need to invest 12 million dollars in 1-month T-bills.
We need to keep these numbers in perspective, lest we get caught up in this clown-car farce of a circus act.
What's 12-million to the real players (like PIMCO). Please, forget about pensioners, they are solylent green at this point.
If you're not on the inside, you're on the outside. The insiders will buy into the hype, get the muppets on board and move in for the slay. The market is operated by a small group on insiders who make the real money. Only when you are on the inside can you accurately describe the reasons for such dramatic moves and why they revert back to the 'new normal' in time and why 'someone must have known something' will be voiced but no one will care to listen, because the past is the past no matter how long ago it was.
The market does not move, the market is moved.
Market....LOL.
Exactly, market what fucking market? Moreover, what is this market priced in? Dollars? What good is all that "wealth" when the rest of the world won't accept it in exchange for their labor?
That market has "a movement".
Can you say "distress sale"?
<Now where did I put that Pepto?>
Depends.
I had a movement.
Allegro?
ma non troppo.
This feels like a real set-up to me. I'd love to know if it is Goldman or if it is JPM that is selling these CDS. They'll get the upfront, but my guess is that many people don't pay the legs on this even for the next quarter, and not because the buyers are getiing paid off. And then soon we'll have another "we're not raising the debt ceiling this time...we double-pinky swear" farce again.
I'd get my hopes up that finally we'll have some honesty and just see the US default, but I've seen this game before.
I'm going to buy some long positions into the weekend.
I've been buying in all week. When one month T-bills are paying 5% interest and the 30yr can't find a quote because there is no bid I will lower my facefart target to $45
If anybody thinks the repukes aren't going to roll over on this they are freaking nuts. I will say Zero is making it hard for them to do so they way he is attacking them. It's almost as if he wants them not too.
Doc I wonder if the fed gave the marching orders to let this go on just long enough for the fed to come out and make it even clearererer that QE will not only continue, but probaby increase now that "the fragile economy may have suffered damage".
That certainly may be the case. It would give them a good out that's for sure. I look forward to see the world's reaction when they inevitably do expand QE.
As far as the "markets" go, a 1% controlled sell off just tells me they are trying to scare the sheep.
I think you're right. The US will continue to dishnoestly default by inflation rather than doing the honest thing and just say, "Dude, we're broke and can't pay the (T-)bills. Sorry."
Bad cop bad cop.
its certainly one way to prevent the public knowing the BLS numbers for another month and getting the full X-mas shopping bump before they find out we fell off a cliff in September
I'm not nervous at all, I'm just going to fish for some flounder off the jetty today and all the Money Masters can go jump on a boat to Fuckoffity Island.
Awesome. tick fucking tock.
Note that the two prior spikes in 1y CDS were associated with big declines in equity markets.
Not this time....yet?
I'm away from my bond calculator can somebody quote the price in dollar terms is it 99.999999 9
Have no fear Underdog ObamaCare is here.
<Ignore that pending Federal default behind the curtain and continue to rage against ObamaCare.>
Cad is also behind the curtain
Do not eat the government vaccine?
jebus why weren't they in cash to begin with? the damn thing was set on zirp anyway. the 1M rate wouldn't even cover management costs.
If you like ZIRP, you are gonna love NIRP.
If you're getting 0.05% and paying 0.19% in fees then you are already living in the nirp zone. Can I keep my $ on deposit like the banks do and get a free 0.25%? Didn't think so. Bastards.
It will get worse.
undoubtedly. the credit union changed their rate on deposits to 0.01%. nothing says take your money and get the hell out of here like in-your-face zirp-nirp.
Considering that the Fed cannot "let" interest rates rise for the next 20-30 years I see a time in the next few years when the bank fees charged to accept our deposited "money" will be astoundingly high.
<Barter will suddenly look much more attractive. Just like in the 70's and early 80's.>
The bank of Serta will come back around. Personally I prefer the bank of silver.
And barter is the way to go. Even if I sometimes I have to barter FRNs for something, it makes a lot of sense t obe a part of the "underground" economy.
Seems like it would take a pretty small change to EBay to turn it into BarterTown...
Despite the massive ramp..... Those still indicate VERY SMALL ODDS OF DEFAULT.
Agreed. Let's take another look at those charts in a week or so.
During the summer 2011 "default scare" WTI oil went from $99 to $75. Just sayin'
Just wake me up when the ten-year rises over 3 percent. The 1year action is just foam on a latte.
Allow me to open this bottle of champagne next to your eyeball; don't worry, it's completely contained at the moment.
Hahaha! You're like a date gone horribly awry, but just do it.
He's just not that into you.
Banks stuffing ATM's, Car fiasco in D.C., on and on.
There are silly people out there, even people w/money, w/gold.
Stay focused, stay sane and drink.
Choose two.
OT:
http://www.youtube.com/watch?v=eziI4h3J0Eg
It would seem the Republicans are breaking down and unfortunately the government will soon be back aup and "running." Rand Paul is an idiot for talking strategy with McConnell after saying he is "wired up."
Gee Rand, you think our sleazy media would like the opportunity to get ahead of its competitors and air your strategy? What a dunce.
More debt piled on the shit house of failing debt will solve all things. We're sinking financially and the gov goon platooning freak shows says drill more holes and bigger ones in the bottom of our sinking ship. Let in more water to keep us afloat. As if more debt will solve the debt situation. Who can think it so? Your head needs severed from a drone financial body which will soon be taken and beaten; pounded severely without mercy into complete monetary palsy and dumped over board the USS Financial TITANIC! GOT REAL MONEY GOLD AND SILVER BULLION COINS OUTSIDE THE BANKSTERING SYSTEM? Then to the dump you go.
Anyone have a current offer on a 30 pack of natty light?