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30Y Yield Retraces 50% Of 2013 Taper Tantrum; JPY Surging, Stocks Tumbling

Tyler Durden's picture


30Y yields have plunged back below 3.40% for the first time snce June 2013 and have retraced over 50% of the "Taper tantrum" sell-off. Yields have accelerated lower this morning after spiking on the jobs data, as a combination of blood on the streets of Ukraine and the reality of the jobs data send investrs to safe havens. JPY is aggressively bid (with AUDJPY ruling US equity weakness) and Gold and silver are in heavy demand.

30Y yields have collapsed...


as investors dive for safe havens - JPY is surging (and thus AUDJPY is dragging US equities lower)..


and gold is bid

Still plenty of catch down for stocks...


Remember, it's not Tuesday!


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Fri, 05/02/2014 - 11:06 | 4720215 LawsofPhysics
LawsofPhysics's picture

Yes, yes, we covered this "shearing" already...

full faith and credit motherfuckers...

Fri, 05/02/2014 - 11:49 | 4720453 Dr. Engali
Dr. Engali's picture

You know when you see reports like that they are ready to dump on retail.

Fri, 05/02/2014 - 12:09 | 4720550 SAT 800
SAT 800's picture

Are all you little "manipulation" cult members ready to apologize to me now for trying to explain to you yesterday what the nature of the event was yesterday morning? No. I didn't think so. Once the human mind joins a cult it becomes un-available to rational intervention. It was about five people who caused the waterfall yesterday, and as I pointed out to you it signaled a buying opportunity because they already knew the market was primed to go up. There are no Banks and No Evil Empires involved. None. Nada. Nilch. Your belief system is crap.

Fri, 05/02/2014 - 12:18 | 4720594 Bangin7GramRocks
Bangin7GramRocks's picture

I ain't never seen no one shit all stupid as you!

Fri, 05/02/2014 - 12:22 | 4720613 fonzannoon
fonzannoon's picture

are you still shorting treasuries? Didn't you predict thousand percent gains month after month by shorting UST's this year?

Fri, 05/02/2014 - 12:29 | 4720642 Flakmeister
Flakmeister's picture

Between the long silver - short UST trade, SAT now has three assholes and they all bleed....

Fri, 05/02/2014 - 16:22 | 4721685 SAT 800
SAT 800's picture

Just shorted on the Long Bond today; reported on another post here on ZH; took a 1000$ stop loss on the last attempt. Sold ZB @136.-07. It's called contrarian trading.

Fri, 05/02/2014 - 16:23 | 4721689 SAT 800
SAT 800's picture

Don't I don't predict, discuss, or mention foolish nonsense; like thousand percent gains; I leave that up to the ignorant citizens like you.

Fri, 05/02/2014 - 12:12 | 4720571 SAT 800
SAT 800's picture

Oh My God; Gold went up suddenly in few minutes; and there's no explanation !! It must be a manipulation. Oh, Dear, oh, dear.

Fri, 05/02/2014 - 12:19 | 4720601 Tinky
Tinky's picture

Generally speaking, it's not advisable to flaunt stupidity.

Fri, 05/02/2014 - 16:26 | 4721700 SAT 800
SAT 800's picture

It depends on the environment; on Zero Hedge it means you're a consensus player with an approval rating from the audience; especially regarding the idiotic bullshit about manipulation conspiracies every time there's a two hour dip in the metals prices.

Fri, 05/02/2014 - 12:24 | 4720619 Theta_Burn
Theta_Burn's picture

Those charts and a weakened dollar = no explanation?

And bitcoin is a sceaming buy here?

Fri, 05/02/2014 - 11:07 | 4720220 Vampyroteuthis ...
Vampyroteuthis infernalis's picture

Just wait long enought the Yen carry trade unwind will blitz everything, including stawks.

Fri, 05/02/2014 - 11:10 | 4720223 Grande Tetons
Grande Tetons's picture

Could it be the bond market is calling bullshit on this NFP report? 

Growth my ass.

Fri, 05/02/2014 - 11:15 | 4720273 Grande Tetons
Grande Tetons's picture

Something to go with your burger.

Fri, 05/02/2014 - 11:20 | 4720299 CrashisOptimistic
CrashisOptimistic's picture

I'll try one more time.

You can't raise the price on things for which there is no demand.  Those who see higher bond yields are saying they see buoyant economic growth -- because that is what generates demand for loans.

If there is no demand for loans, you can't raise the price (the interest rate) of the loan. 

There is poor economic growth and it is getting worse.  So yields are going to fall.

The Fed will ensure there is never any default.  In yesteryear, you could say that there is a limit to this.  But in present year, cooperative central banks all over the world will orchestrate behavior to ensure the Fed is never punished via currency problems.

Stop thinking money can take the system down.  It can't.  Only oil can.

Fri, 05/02/2014 - 11:27 | 4720327 Flakmeister
Flakmeister's picture


There is a twist in that  your system can go down when you can't convert your money into oil....

Fri, 05/02/2014 - 12:10 | 4720561 SAT 800
SAT 800's picture

Moronic idiot; all your lines come from comic books. Grow up.

Fri, 05/02/2014 - 12:30 | 4720585 Flakmeister
Flakmeister's picture

I am only trying to write at a level that the likes of you can understand...


As the smart ones around here have pretty much figured out what CIO and myself have been telling you for years....

Fri, 05/02/2014 - 12:34 | 4720662 Edward1290
Edward1290's picture

what is the official US Gov position on 'peak oil'???

Fri, 05/02/2014 - 12:37 | 4720673 Flakmeister
Flakmeister's picture


but they did commission the Hirsch Report....

And there are a number of related DOD docs in the public about it...

Google it...

Fri, 05/02/2014 - 11:28 | 4720336 LawsofPhysics
LawsofPhysics's picture

Correct.  They will outright kill the fucking currency before admitting a default.


For reference see the CDS "market" and how many such "events" have been allowed to occur.

Fri, 05/02/2014 - 11:32 | 4720364 gatorengineer
gatorengineer's picture

Fed Rates against any reasonable measure are negative.  This graph shoots your hypothesis to shit

Home price are cratering in my area, sales numbers are down, and mortgages rates are rising against ..............?

Banks are simply raising cash, and still taking stuff off their books.  The tipping point will be when it starts going on the books faster than it comes off.

Try looking at the other side of the coin, that there is no supply of money out their to loan.  Why are credit card rates where they are? 

with the cost of short term money there is no one willing to lend.... Period.

Fri, 05/02/2014 - 11:40 | 4720416 disabledvet
disabledvet's picture

Banks are looking for a white knight..."pay me to stop banking."

Outside of North Dakota none exist.

Gold is the only substitute for having cash in your walls...also a viable alternative I might we go full on "Whitey Bulger" here.

"The chickens are coming home to roost" indeed. The bigger the lies the more the market tells the algo's to drop dead.

Fri, 05/02/2014 - 11:42 | 4720424 disabledvet
disabledvet's picture

Oh, and "worse yet, it's Bank Failure Friday."

Fri, 05/02/2014 - 12:17 | 4720588 Flakmeister
Flakmeister's picture

That is so 2009....

Fri, 05/02/2014 - 12:00 | 4720508 LawsofPhysics
LawsofPhysics's picture

Again, the end result is still a complete bank/currency failure.

By "accident" or otherwise.

It takes real fucking commmodities and energy to get real fucking work done. 

without energy available for consumption, everything stops, period.

Fri, 05/02/2014 - 12:08 | 4720521 CrashisOptimistic
CrashisOptimistic's picture

Dood, your graph shows a declining mortgage rate since January.

As for no one willing to lend, you think those low lifes out there are paying cash for new cars?

Beyond that, yes, real estate is absurd. 

Fri, 05/02/2014 - 12:25 | 4720624 bobby02
bobby02's picture

First of all, you ignore the vital maturity transformation that banks perform: How can you compare an overnight loan with a 30-year mortgage?

Second, your argument is based on 3 years of mortgage rates? (Them there's cherry picking skills worthy of a Tyler.) Try looking at 30 years of data. You might notice a 15 year period where mortgages rate stayed north of 10%. What did bank NIM look like during that period?

Third, if there is no money to lend, why have banks parked $2.7 trillion (with a t) in excess reserves at the Fed? The banks don’t want to make those mortgages as there are few credit worthy borrowers. Furthermore, if home prices are falling, then the collateral is becoming impaired, meaning rising default and falling recovery rates. Throw in stagnant (at best) employment and wages, i.e., diminished debt service capacity, and you’ve got a potent brew. Prudent risk management says you shrink your balance sheet and de-risk – it’s better to get a guaranteed but paltry 25 bp risk-free from the Fed than chase a 4% NIM and risk having Titanic-size holes blown in your balance sheet. 

Fri, 05/02/2014 - 12:35 | 4720668 LawsofPhysics
LawsofPhysics's picture

There you go.  Now if only someone would lend me billions of dollars at 0.01%.  I guarantee I can return a "profit".

Fri, 05/02/2014 - 13:00 | 4720778 bobby02
bobby02's picture

You and me both! (Too bad it doesn’t exist.) I had my eye on a little Caribbean island, cozy, but with a runway big enough for my Gulfstream V.

Fri, 05/02/2014 - 11:33 | 4720367 bobby02
bobby02's picture

Bear flattener baby! Without rehashing peak oil for the umpteenth time, how can anyone really believe that central banks control long-term interest rates? In the absence of rising demand for funding, LT rates are just a derivative of the term structure.


Fri, 05/02/2014 - 11:38 | 4720399 Unknown Poster
Unknown Poster's picture

Venezuela is trying to prove you wrong.

Fri, 05/02/2014 - 11:44 | 4720434 Redneck Hippy
Redneck Hippy's picture

As long as Italian and Spanish yields are as low as Treasuries and Japanese yields a lot lower than that, there is no way that U.S. yields are gonna spike, now matter how well the economy does.

The BOJ cannot allow Japanese yields to rise, otherwise Japan is bankruptis  (of course, it is bankrupt anyway, but they can't allow that to be generally recognized).  The ECB is doing something weird behind the scenes to keep yields down in the EU periphery.  This is obvious manipulation, but as long as its working, the market will allow it.

All stimulus is fungible.  So even though the Fed is cutting back, the Japanese aren't, the Europeans are just starting, and the Chinese don't admit that they're printing, but they're printing like mad.  Which is why the yuan won't come back.  So U.S. yields are the beneficiary of everybody else's stimulus.  If the Fed wanted to raise rates, they couldn't.

And the idea that the yen is a safe harbor is so wrong on so many levels that it boggles the mind to even attempt a comment.

But as a wise man once said (I forget who), thing's that can't go on will continue to go on until they can't.

Fri, 05/02/2014 - 12:09 | 4720554 eclectic syncretist
eclectic syncretist's picture

The Fed is going to tighten even if they have to massage the data into meaningless drivel.  Why?  Because their purpose is to line the pocket of a few fat cats at the expense of everyone else.

Fri, 05/02/2014 - 12:26 | 4720630 Spitzer
Spitzer's picture

@ Crashisoptimistic

Bond yields shoot up because people rush out of them. Why do you think this does not appy to the US bond market ?

Fri, 05/02/2014 - 12:56 | 4720752 4shzl
4shzl's picture



Winner, winner, chicken dinner!

Fri, 05/02/2014 - 11:27 | 4720326 buzzsaw99
buzzsaw99's picture

"the bond market", we got a bunch of comedians up in here bitchez

Fri, 05/02/2014 - 11:50 | 4720452 Sam Spade
Sam Spade's picture

When ZH posted a report by Lacy Hunt earlier in the year predicting that the downward trend in long-term interest rates would likely resume, many here scoffed, but he's been absolutely correct.  Long-term interest rates rise when economic optimism flourishes and then drop when economic reality hits everyone in the face.  This is a seasonal trade that has been profitable for several years, and will likely work for the rest of the decade.

Fri, 05/02/2014 - 12:01 | 4720510 CrimsonAvenger
CrimsonAvenger's picture

All I can say in response is that Lacy is a girl's name.

Fri, 05/02/2014 - 12:20 | 4720609 Flakmeister
Flakmeister's picture

More than a few of us saw the 10y at 3% as a very nice buying oppurtunity for dividend/fixed income plays...

Check out MAV for instance, and it still yielding north of 7.5% tax-free....

Fri, 05/02/2014 - 12:28 | 4720641 Spitzer
Spitzer's picture

That is just complete horse shit Sam Spade.

Why did Italian yields spike up and take down MF global a couple years ago ? Because "economic optimism flourished in Italy ?


????? economic optimism flourishes

Lol what ?

Fri, 05/02/2014 - 12:59 | 4720767 Sam Spade
Sam Spade's picture

Back in November and December, everyone was talking about how the economy was going to turn the corner in 2014 and finally reach escape velocity, and that we were thus in a "rising interest rate enviroment".  And now we have a shitty GDP print and a drop in the labor participation rate to 35 year lows, and interest rates are falling.  It happens every year.  When you're in the middle of an unacknowledged depression, you trade off of people's misplaced optimism.

Fri, 05/02/2014 - 13:51 | 4720991 Spitzer
Spitzer's picture

Bond yields spike when an economy is on the rocks. Russia 1998, Thailand 1997, Italy 2011 ect ect ect


You are imlying that the US bond market has magical powers

Fri, 05/02/2014 - 11:08 | 4720229 The_Peeper
The_Peeper's picture

SPX has tumbled 0.07%?

Fri, 05/02/2014 - 11:12 | 4720254 fonzannoon
fonzannoon's picture

Just keep buying. It's gonna be fine.

Fri, 05/02/2014 - 11:36 | 4720372 SheepDog-One
SheepDog-One's picture

Yes but for this 'market' where daily gains are supposed to be at least .5% daily, it is quite shocking to actually see a red coloration.

Fri, 05/02/2014 - 11:48 | 4720450 Redneck Hippy
Redneck Hippy's picture

It's early yet.  The 3:30 ramp is coming.

Fri, 05/02/2014 - 11:08 | 4720231 -.-
-.-'s picture

...Where is it!? That piece of monopoly money, that troll?

Fri, 05/02/2014 - 11:09 | 4720234 Xibalba
Xibalba's picture

What's the math for a 50bip rise on 4.1t in debt?  Too many zeros for me to do in my head...

Fri, 05/02/2014 - 11:45 | 4720442 slightlyskeptical
slightlyskeptical's picture

20 billion annually give or take.

Fri, 05/02/2014 - 11:09 | 4720236 Kreditanstalt
Kreditanstalt's picture

"Send investors to safe havens"???

What "investors"?  These are risk-averse punters and bettors...

Fri, 05/02/2014 - 11:12 | 4720251 the not so migh...
the not so mighty maximiza's picture


Fri, 05/02/2014 - 11:12 | 4720256 Kreditanstalt
Kreditanstalt's picture

Haha...JP Morgan: "Gold will never see $1300 again".....Hahahahhahaahaha...!

Fri, 05/02/2014 - 11:13 | 4720259 Obama_4_Dictator
Obama_4_Dictator's picture

Burn...burn...burn...where's my boy MBD??? Stupid fucking faggot.

Fri, 05/02/2014 - 11:29 | 4720341 oklaboy
oklaboy's picture

you mean the oracle MDB?

Fri, 05/02/2014 - 11:14 | 4720261 Dr. Engali
Dr. Engali's picture

The fed is going to sacrifice the market and let fear pick up the slack with the bond buying. The people in the know are front running the action where they will be waiting to sell retail some bonds. Ukrain provides them plenty of cover to sluff off the blame.

Fri, 05/02/2014 - 11:18 | 4720291 fonzannoon
fonzannoon's picture

Last year Bernak hinted at Taper and the 10yr went to 3% before he finished his sentence. This year Yellen screams growth and that she is going to raise flat out raise rates and the 10yr heads straight for 2%.

what a difference a year makes.

Fri, 05/02/2014 - 11:20 | 4720300 Dr. Engali
Dr. Engali's picture

Crazy world isn't it?

Fri, 05/02/2014 - 11:33 | 4720365 Canuckistan Al
Canuckistan Al's picture

Indeed Doc..............

Then there is this to reconfirm.

Sheep setup for further fleecing:

Fri, 05/02/2014 - 11:29 | 4720322 LawsofPhysics
LawsofPhysics's picture

Yes, yes, hypocrisy,  Are yields supposed to rise with growth expectations or not?  Can't have it both ways motherfuckers...


But I digress, there is no market...

Fri, 05/02/2014 - 11:36 | 4720389 JRobby
JRobby's picture

Tampering with naturally occuring economic activity has reached a level now where nothing can possibly make sense.

Will there be special textbooks for 2008 through end? Will there be a 3 credit course devoted specifically to it as a requirement in B schools? "ECON 105 - What Not To Do EVER"

Or will it just become some kind of "gaming the system for dummies" manuel.




Fri, 05/02/2014 - 11:40 | 4720411 CrashisOptimistic
CrashisOptimistic's picture

There won't be any universities or textbooks, so no.

Fri, 05/02/2014 - 12:31 | 4720650 Flakmeister
Flakmeister's picture

It'll be the equivalent of the dead sea scrolls....

Fri, 05/02/2014 - 11:23 | 4720311 buzzsaw99
buzzsaw99's picture

"the market", that's a good one doc!

Fri, 05/02/2014 - 11:32 | 4720361 Dr. Engali
Dr. Engali's picture

Like it or not, they got retail back in and now it's time for the fleecing.

Fri, 05/02/2014 - 11:32 | 4720270 Quus Ant
Quus Ant's picture

gold and silver po(o)ping.  All that pent up demand I guess.  She was looking a little constipated.


I used to feel invested in these proceedings, but now I settle for the giddy, guilty pleasure of watching two trains collide headon.  



Fri, 05/02/2014 - 11:17 | 4720283 Obama_4_Dictator
Obama_4_Dictator's picture

Honestly though, silver should be at least 45 an oz.....

Fri, 05/02/2014 - 11:26 | 4720323 Quus Ant
Quus Ant's picture

Every technology based organization(society) benefits from it being suppressed.

Fri, 05/02/2014 - 11:27 | 4720325 greatbeard
greatbeard's picture

>> silver should be at least 45 an oz.....

Turd, long time no see. 

Fri, 05/02/2014 - 11:31 | 4720354 Obama_4_Dictator
Obama_4_Dictator's picture

Turd??? Not sure what you mean....I'm just saying silver should is way under valued.....

Fri, 05/02/2014 - 11:40 | 4720413 Dr. Engali
Dr. Engali's picture

he is referring to Turd Ferguson. He is an old commentator who no longer posts.

Fri, 05/02/2014 - 11:40 | 4720417 HobbyFarmer
HobbyFarmer's picture

Turd Fergeson (sp?) was a long time poster about the undervalue of gold/silver.  I enjoyed his posting but haven't seen him for a long time.

Take it as a compliment.

Fri, 05/02/2014 - 11:43 | 4720426 fonzannoon
fonzannoon's picture

He changed his name to Ferd Turgeson and is currently selling Amway in Cheybogan.

Fri, 05/02/2014 - 11:43 | 4720427 Obama_4_Dictator
Obama_4_Dictator's picture

Ok, sounds good.  

Fri, 05/02/2014 - 11:28 | 4720333 Flakmeister
Flakmeister's picture

Talking your book, eh?

Fri, 05/02/2014 - 11:34 | 4720375 Quus Ant
Quus Ant's picture

.......for me to break even.   :)))):

Fri, 05/02/2014 - 12:32 | 4720653 Flakmeister
Flakmeister's picture


but probably true...

Fri, 05/02/2014 - 11:35 | 4720381 Dr. Engali
Dr. Engali's picture

I don't know that I agree with your statement. I can still get physical at these prices with no delay or large premium. I just added to the insurance policy, no waiting.

Sat, 05/10/2014 - 01:37 | 4745683 MeelionDollerBogus
MeelionDollerBogus's picture

45 what per ounce? Bullets? cups of rice? Some measure of fuel, or a number of batteries?

Surely you don't think rubber-ruler fiat-dollars should set a price of anything, much less silver, do you?

You wouldn't actually want to dump silver for paper, would you? Seriously?

Fri, 05/02/2014 - 11:18 | 4720288 paddy0761
paddy0761's picture

The 10yr has broken down. The 25 handle spells Goodnight Irene.

Fri, 05/02/2014 - 11:21 | 4720306 The Most Intere...
The Most Interesting Frog in the World's picture

JGB 10 YR trading at .61 this morning.  US 10 YR has a long way to go...

Fri, 05/02/2014 - 11:23 | 4720308 MWizard
MWizard's picture

Last year I lost a lot of nerves, time and money because of gold but this ebook improved my performence in all these 3 fields

Fri, 05/02/2014 - 11:51 | 4720463 Latitude25
Latitude25's picture

bit torrent it for free

Fri, 05/02/2014 - 11:29 | 4720347 SheepDog-One
SheepDog-One's picture

The sheeple piled in at NFP opening euphoria and are getting sheared....serves em right. But at least they're not carving up the lambchops....yet.

Fri, 05/02/2014 - 11:34 | 4720379 SheepDog-One
SheepDog-One's picture


Fri, 05/02/2014 - 11:42 | 4720423 The worst trader
The worst trader's picture

Being long stocks is a great thing but this is not a market.It has completely morphed into a circus.Whenthe POTUS tells you it's a good time to get into the stock market can anyone tell me it's not completely rigged? I'm done as of today, I may miss another 20% but I will not sit thru another 50% correction. Fuck this piece of shit! That is all...................... In the past a day like today would have dropped the S&P by 20 points, the new normal it will be up 10.

Fri, 05/02/2014 - 12:26 | 4720626 Market Rage
Market Rage's picture

The day isn't over yet.  Intraday ES chart is bearish and projecting ~ 1862.

Fri, 05/02/2014 - 11:47 | 4720446 Bloody Muppet
Bloody Muppet's picture

The S&P is 0.01% down! Turn those machines back on!!

Fri, 05/02/2014 - 11:55 | 4720476 juggalo1
juggalo1's picture

What's with the weird correlations recently?  Bonds are outperforming, but with the level of outperformance on the long bond, I wouldn't expect stocks to hold up like they have.  I like diversifying my portfolio, but when things move in tandem that usually move opposite I get frustrated.

Fri, 05/02/2014 - 13:20 | 4720625 Youri Carma
Youri Carma's picture

I suspect that they will try to keep Gold in the tunnel next. FED will be happy with ‘the save haven’ demand pushing yields lower. The only problem for the FED is this is exactly the opposite sign for a recovery, when rates should go up.

But hee, you fudge the unemployment numbers so that the fancy fair can go on for an other day. But it’s poppycock to even think that declining GDP numbers actually produces more jobs that’s just ludicrous and the market isn’t buying the FED’s BS anymore.

Disclaimer: Some markets but certainly not the stockmarket

Fri, 05/02/2014 - 12:26 | 4720631 Caracalla
Caracalla's picture

I'm buying TLT, 125 strike calls for Jan. for a few pennies.  Given the demand for high quality unsecured U.S. debt, I should make a mint!  Wouldn't surpise me if the 10 yr. yield goes under 1.25% in the next year.

Fri, 05/02/2014 - 12:27 | 4720635 Caracalla
Caracalla's picture

Buying June 40 VXX calls like crazy too!

Fri, 05/02/2014 - 12:34 | 4720660 BeetleBailey
BeetleBailey's picture

FX charts look like tuning forks.....DOWN then UP for the Eur and Poundie


Crooked tuning fork for the Loonie and Yen....



Fri, 05/02/2014 - 12:40 | 4720688 Caracalla
Caracalla's picture

Time to sell in May and go away folks!  Don't hold those SPY calls and other long positions going into this weekend!

Fri, 05/02/2014 - 13:26 | 4720867 silverserfer
silverserfer's picture

dump and pump?

Fri, 05/02/2014 - 13:54 | 4721004 Spungo
Spungo's picture

Buy the schizophrenia!

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