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Treasury Bulls Beware: A Cautionary Tale From Punk'd British Bond Traders
Bad data, don't worry, the central bank's got your back; Good data, don't worry, the central bank promised to stay easier for longer and longer (no matter how good things appear from the data). That's the meme that has driven the short-end of the world's largest bond markets to record lows. And then, just as the world's bond traders think they have the central banks understood, the Bank of England drops a tape-bomb...
Just when you thought you knew your uber-dovish central bank, this happens:
BoE Governor Carney noted that borrowing costs may rise sooner than economists expected...
and Deputy Governor Bean added...
"An increase in interest rates will be a symbolic step, because it will be an indication that we are on the road back to normality,"
"I would welcome us getting on to the path of normalization, as a demonstration that the economy is healing,"
Which produced this... in 1Y Gilts...
Coming to a US Treasury market near you soon? We have argued before that the Fed needs volatility to maintain their omnipotence.
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bullshit bullshit bullshit
symbolic = inconsequential
Actually, the rich are richer than in 2008.... Fuck the rest like in 2008....
Everything is indeed normal again.
ALL BULLSHIT.......... LOL!!!
http://www.youtube.com/watch?v=EaDzkyplitE
Exactly. They play at wanting Vol and not wanting bubbles. What they practice is something entirely different. Every pop higher in Vol + Yields gets hammered down... if you are considering getting long either one don't fool yourself into thinking otherwise.
Shorted t he British Pound Today; BIG TIME. December contract @ 1.6940; Whoohaa! free money for Christmas.
The immaterial has become immaterial. [/Lord Beckett]
Behavioral economics at its worst.
perhaps, only one thing is certain now, central banks are the "bond market" now. They wil make the "market" do what is good for them, period.
Is zerohedge becoming a dropbox for primary dealers and the Fed, much like some other blogs like Calculated Risk? I mean, what's up with the non-stop treasury bashing/warning messages?
That Carney is a mouthpiece and tool working for the banks we all know, but that zerohedge joins the ranks with this dumb talk would be unfortunate.
National debt clock...
http://www.usdebtclock.org/
Is Belgium or Japan our savior?
chocolate covered sushi....
So you're thinking the U.S. will be able to legitimately pay off it's $16 TRILLION debt???
What could go wrong ?
Tyler hasn't seemed particularly pro rate increase. He has seemed anti GDP increase and that leads to rate decrease.
It is useful to remind ZH commenters that there was essentially a consensus that "the Fed will never taper", it's all bullshit talk from Hilsenrath.
Proved not to be so. The Fed has tapered, regardless of GDP or anything else, all while claiming it is data dependent.
Maybe it's not data dependent. Maybe they have to taper for other reasons.
The Fed Governor speeches about expecting to raise rates all derive from their internal models, and you know God Damned well those models presume $85 oil.
"Other reasons" to taper might include the need for those bonds elsewhere. Whatever bonds the Fed doesn't buy become available as AAA collateral to help support the global shit pile of derivatives.
There will be no normalization of rates in my lifetime.
~ The Bernank
Maybe he is overestimating his lifetime.
We can only hope.
We can only hope.
A sentiment worth repeating.
Yup. For rates to soar, the Japan scenario must be ruled out. And I see nothing but echoes of Japan in the US.
We are both on the same page, unless they do something stupid (even dumber than what they are currently doing) and blow everything up.
Put me down for them doing something stupid and raising rates.
Yes, and if that happens, owning pm's will offer you some protection.
Funny considering the only "asset" that the BOE has on their balance sheet that can be converted in oil and NG imports is USTs....
Rates go up? Fugly gets real.
Yield curve inversion?
If there was anything happening in the economy, the would raise rates. Nothing is going on, so they will raise rates to make it appear there is activity. This will crash and burn.
Maybe the FED should spend less time figuring ways to manipulate the market into acting the way a free market would act and just get out of the way and let the free market act?
the free market is a myth, like bigfoot
Not exactly: Someone has reportedly spotted bigfoot.
Which must be Flackmeister, it also explains his Bigmouth.
Ser Gut, mein Oberst !
Thanks I'm just having a little fun as his expense. I love him like I love our benevolent Central bankers.
I too, welcome our new banker overlords...*shifty-eyes*...really, I do, ask anyone...
The Fed will normalize the rates after they own them all....then they can just print to cover the losses....and everyone else will be playing the options markets...for the volitility....just playing the new game
"Return to normality"?
That must mean raising rates to pop the 2009-2014 bubble they blew.
Then clearing all the savings/retirement chips off the table of the little people, bailouts of banks/corporations/insurers, and then another ramp job bubble fest.
Yup, central banks need volatility because their bankster masters need bubbles to steal from the treasury and the citizenry.
There is no such thing as investment anymore, only parasitism.
Interest rate derivitive. Boom.
Ok Rover...
Stop playing dead...Rowf
Good boy.
Already short the US Long Bond, as reported here on 05/12; underwater but serenely confident; at least as long as the Hillbilly Heroin holds out.
Public Image Ltd - Fat Chance Hotel
Thought it was suiting. :)
Ooooh I know I know the next headline!!!!!!
British Housing Bubble goes Boom!
when ur printing 27 trillion, whats a bip or two?
The secret message is 'buy gold'. Look, if it goes lower the little people will suck up the last of the available physical on the planet. If it goes higher it will do so in a commodity bul market which will kill the ecomony. Gold is range bound. That makes it the one stable savings vehicle. I like it.