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Forward Bill Yields Spike At Can-Kicking Debt-Ceiling Deadline
While the October T-Bills have seen yield drop in the last 24 hours, they remain notably elevated relative to both longer-dated yields and the equity-market's exuberance. What is much more worrisome for the markets - most explicitly the repo markets - is the blow-outs now being seen in the Nov/Dec T-Bill yields as the can-kicking deadline gets priced in for another round of chaos in 6-8 weeks.
The Dec T-Bills are now higher in yield than the Oct T-Bills were on Tuesday!!!
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whatever.
Hey Fonz, I was reading that the 10 year rate is no longer a valid indicator because of the flash trading circle jerk the banks are doing. What are your thoughts and what is a possible new indicator?
With the Bernank buying 40 billion a month in treasuries, the ten year has lost any semblance of a valid market indicator.
When fraud is the status quo, possession is the law. This is all you need to know, that and the fact that there is no market for true price discovery.
Hedge accordingly.
When the 10yr moves in a 1 bp to 0 bp range when short term volitility is massive:
SOMEONE has their fist on the supply/demand scale in attempt to indicate 'stability'!
The 10yr has been managed technically by the FED over past 5 yrs and ACVTIVELY over past 18 months!!!
I expect another big drop today, congress has to make some money on this just like they did during the last circle jerk.
Now this morning's sale on gold makes sense.
I guess they didn't get the memo that boner is once again going limp.
The only ones getting stiffed are the serfs...
Quit fighting them on gold. Do like I did. Load up short on gold and silver and make money from their games. I now have a signaficant part of my portfolio in Jan/15 puts on gold, silver and miners and will make money. They are not letting gold go up absent a total collapse.
I'm too chicken to go short on anything these days. Too easy to get burned. Ask anyone around here who's tried it.
My opinion is that gold is to be owned, not traded as an investment. Buy it, stash it, forget about it for a couple decades.
Letting GOLD rise would be an instant worldwide admission of failure and would herald the start of the BIG dominoes falling.
BINGO BINGO....that is Bernanke's ULTIMATE FEAR!!!!
After all he DOES NOT UNDERSTAND the Gold Market......yet CB's around the World are sucking up and hoarding the misunderstood product!!!!
Total collapse is coming by Jan 15. If you don't hold it, you don't own it.
Funny thing is, the bond traders alway know what's about to hit.....
The short duration credit market is where collapse will begin.
These huge (% wise) moves will decimate the big financials and money market funds if they aren't reversed quickly.
Also, if the FED can't keep the front end of the yield curve nailed to the floor, they have lost control of everytning.
Thank you ZH for keeping us informed.
"Also, if the FED can't keep the front end of the yield curve nailed to the floor, they have lost control of everytning."
That's right, so maybe we shouldn't be too hard on the GOP. What would you do if someone from the FED came to your office and showed you a picture of your daughter with a big X through it?
Extend and pretend is the name of the game. All else is sudden death. The horizon on short term thinking has decreased to 24 hours. The pressure on republicans is unimaginable. Of course they are going to capitulate. There are no other options...
I mean, will they really hold the line? if the debt ceiling is breached with no CR, at what point do climbing yeilds reach escape velocity, and trigger a self-reinforcing resonance dynamic that literaly shakes everything apart? That's the scenario facing us. The Repubs think the threat of systemic collapse is their gun to the head of the opposition, but just like the Freemen of the 90's they forget that no-one else is playing by the rules. Sure, according to the "law" you can be a sovereign citizen, just because you sign your name in capital-lower case, first name first, last name last, but guess what? The goons with the guns and badges don't obey the law.
When they come for their families, the game is over, and a clean CR will be passed.
Equities are the hockey helmeted kids in the sandbox fighting over the cat turds.
Goooooood Morning Fiatnam!
wwwtheworldandeverythinginit.blogspot.com
The Marxist central planners have taken over and it's only going to get much much worse as Obama the ring leader has three more years to transform America. Cloward-Piven strategy is playing out before our very eyes and so you better prepare for many more bizarre trades.
Expect an artificially created and voluntary debt ceiling "crisis" which will last around 2-3 weeks. That should be long enough for the usual suspects to cause enough chaos to make it "politically acceptable" for "hard core Republicans" to publicly say the debt ceiling was always a bad idea.
For the record - A default is easily avoidable even if the debt ceiling were not increased. But no politician is going to cut government, not even Boehner.
The fx market and bonds are laughing at this bullshit MOMO short squeeze in equity markets.The global macro news is bad, and gettinv worse. This nothing more then the vaudeville bandwagon chasing momentum.
When the bond vigilantes arrive, the charts will first look like this IRX 13 week, yield up 75% from yesterday's 0.4 to today's 0.7:
http://bigcharts.marketwatch.com/quickchart/quickchart.asp?symb=irx&insttype=&freq=1&show=&time=5