US Treasury Default Risk Hits 2011 Highs

Not much comment necessary on a topic we have beaten to horse pulp in the past 2 weeks aside to note that this time is ironically different from 2011 as the inversion in the CDS curve is considerably more biased to a piling up of short-term default risk than in 2011.

[Sure enough as we warned last night, we are seeing the longest-dated "Cheapest to deliver" Treasuries well bid as tradesr prepare for a potential CDS trigger in sovereigns - watch the 2.75s of Aug 2042 and the 2.75s of Nov 2042]

T-Bill rates exponentially rising (10/17 +20bps at 48bps!!) - no worries... Fidelity selling all its short-term Treasuries - not a problem... Repo markets starting to panic - have no fear... CDS markets signaling extreme short-term default concerns - baah humbug.... We have a solution for that - Janet Yellen's "buyback" plan.

Comments

[Groundhog Day]

let it burn.

[Samual Adams]

Fire isn't free.  Unless its fuel is FRN's

[Handful of Dust]

Don't worry, Reid and Boner have your back.

[UP Forester]

Jim Cramer says "Treasuries are FINE! Don't worry about treasuries...."

[buzzsaw99]

Fidelity selling all its short-term Treasuries...

But holding tight to PIIGS paper. LMAO LOLOLOLOL!! http://www.youtube.com/watch?v=dD-vAWecEus

[Keyser]

With Bill Gross saying that he's buying what Fidelity is selling. 

http://www.cnbc.com/id/101100268

[buzzsaw99]

It's a no brainer so even he got it right.

[fonzannoon]

Dear TPTB, I AM NOT SELLING FACEFART AND YOU CAN'T MAKE ME!

[buzzsaw99]

Dear Fidelity, just put all $1.5 trillion of it on deposit with JPM. It's FDIC insured up to $250K and insured by the sAME GUBBERMINT WHOSE PAPER YOU ARE DUMPING. JPM wouldn't dare Corzine YOUR client's money. [/sarc.]

[monopoly]

Just goes to show how much the democrats and republicans hate each other. A perfect hate meter.

[economessed]

When the Tylers start a news item with "Not much comment necessary...." I feel obligated to take the hint and stop typing.