• Sprott Money
    05/26/2016 - 05:58
    How many “emergency” “secret” meetings do the central planners around the world need to have before the citizens of the respective countries begin to fully understand and take notice that something...

Bond Traders Are Taking Iraq's Turmoil Seriously

Tyler Durden's picture


While the turmoil in Iraq continues to rise, US equity markets have brushed off most of the geopolitical concerns (more worried about dismal retail sales than the surge in oil prices that is now happening) but bond traders did not wait to sell. Iraq's bond prices have plunged in the last 2 days as concerns that fighting will reach the oil-rich regions of the nation (and thus the money). As Aberdeen Asset Management's Anthony Simond told Bloomberg, "if violence can stay away from the oil region, you'll probably see a rebound in prices; the ability to pay is there... and the willingness to pay for the moment."



Time to buy the dip for all  that yield...

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Thu, 06/12/2014 - 10:05 | 4848234 So Close
So Close's picture

The spice must flow.

Thu, 06/12/2014 - 10:07 | 4848239 nuclearsquid
nuclearsquid's picture

what assholes thought that 5.8% for almost 20 years of Iraqi credit risk would be a good deal?

Thu, 06/12/2014 - 10:18 | 4848270 Dr. Engali
Dr. Engali's picture

The same asshole who thought  that 2.86% yield was worth ten years of Spanish credit risk.

Thu, 06/12/2014 - 10:34 | 4848338 NoDebt
NoDebt's picture

Those bond guys really are smarter than the equity guys, aren't they?  They can see that an invasion/insurgency and possible overthrow of a government MIGHT have a materially adverse impact on that government's bonds.

I'm thinking they are about on-par with Obama "I just learned about it on the news, like everyone else."

Thu, 06/12/2014 - 10:39 | 4848360 nuclearsquid
nuclearsquid's picture

i guess those extra 300 bps are to pay for the beheading risk?


Thu, 06/12/2014 - 10:58 | 4848428 Bunga Bunga
Bunga Bunga's picture

Anyone trading above zero bps will be hanged per Sharia.

Thu, 06/12/2014 - 12:35 | 4848917 kolya111
kolya111's picture

Yeah how dare those bastards get 2.86% when today I only got 2.64% =(

Thu, 06/12/2014 - 10:15 | 4848272 NotApplicable
NotApplicable's picture


Thu, 06/12/2014 - 10:25 | 4848303 SAT 800
SAT 800's picture

Old, old wisdom in the market; never chase interest rates. Interest Rates exist because of Risk; In euphoria we forget the risk and just count all those chickens; long before they hatch. This is actually what brought down Corzine and his MF Global Empire; and motivated him to steal the customers money to prop up his positions; chasing interest on Euro Bonds. This wisdom goes back to the first market in British .Gov Bonds 175 years ago.

Thu, 06/12/2014 - 11:55 | 4848719 Four chan
Four chan's picture

really great point. i think a lot of traders have forgotten the pitfalls of this since the fed pump off the bottom of 6666.

Thu, 06/12/2014 - 10:21 | 4848292 SAT 800
SAT 800's picture

Sold ZBU4; the US Long Bond this morning @135.01X3; on the basis of the chart formation. That's a Sept. '14 contract.

Thu, 06/12/2014 - 10:27 | 4848317 SAT 800
SAT 800's picture

thank you somebody; I post these things in case anyone wants to follow along; and also so when I wrap up the trade at the end; you can see it was real by referring to the archives; when it was put on. Or, how I managed to get my ass-kicked; whichever happened that particular time.

Thu, 06/12/2014 - 11:04 | 4848457 OC Sure
OC Sure's picture

Don't forget to cover before today's auction. A close below 134.16 could get you back in. Tweezers bottom forming on the weeklies?

Thu, 06/12/2014 - 11:28 | 4848596 SAT 800
SAT 800's picture

I have a trading phiosophy thats rational. I don't day trade. I wait and see. The only things I look at on charts are trend lines; trading ranges. But always from the contrary perspective. On the weekly chart you see that the present cycle is downward for the Long Bond.

Thu, 06/12/2014 - 12:12 | 4848803 OC Sure
OC Sure's picture

I see, and agree. What is the duration of the cycle? I see resitance at the line from the tops of 2012 and 2013 but I see support from the lows of December 2013 through March of 2014.

Thu, 06/12/2014 - 10:07 | 4848242 LawsofPhysics
LawsofPhysics's picture

The real question one should ask is, with all that oil (calories), why does this country need to issue debt to begin with?  They should not as they have a lot of something everyone else wants.

Where are all those "free market" cheerleaders now?

Thu, 06/12/2014 - 10:12 | 4848263 Dr. Engali
Dr. Engali's picture

Because the western  central bankers want them to. What other means does the cartel have to skim?

Thu, 06/12/2014 - 10:14 | 4848264 LawsofPhysics
LawsofPhysics's picture

Yes, but desparate bankers are a good thing.  So many rhetorical questions and still many sheep cannot see the hypocrisy.

Thu, 06/12/2014 - 10:34 | 4848340 ShorTed
ShorTed's picture

Well said.  A banker in need is my prayer being answered.

Thu, 06/12/2014 - 10:16 | 4848269 JRobby
JRobby's picture

It's all about the skim. Manufacture & start wars through de-stabilization and false flag operations.



Rebuild using favored contractors


Thu, 06/12/2014 - 10:20 | 4848291 NotApplicable
NotApplicable's picture

What does any of that have to do with free markets?

This is nothing but politicism generating free money for politically connected class that has to be repaid by the masses. Not to mention, it is the best tool of leverage that exists (as long as people identify with external governments).

Thu, 06/12/2014 - 10:26 | 4848310 LawsofPhysics
LawsofPhysics's picture

Blah, blah, blah...

that which cannot be sustained won't be, period.

We are here --> "When fraud is the status quo, possession is the law."

Thu, 06/12/2014 - 10:23 | 4848300 firstdivision
firstdivision's picture

Selling uso buying spy once something real happens (i.e. burning refinery)

Thu, 06/12/2014 - 10:55 | 4848416 Bunga Bunga
Bunga Bunga's picture

Muslims have interest rates set to zero since 1435 years.

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