Treasury Curve Collapses To Flattest Since Feb 2009

Tyler Durden's picture


Steep curve, lots of Net Interest Margin, buy banks, inflation's coming, rates have to rise... no! The US Treasury curve (specifically the spread between the 5Y yield and 30Y yield) has tumbled to its lowest since February 2009 as the long-end dramatically outperforms the Fed-pressured front-end amid concerns that the next cycle will be anything but exuberant and the new normal rates will be notably lower than consensus believes. On a side note, 5 years ago, US bond markets implied a 10Y yield now of 4.6% - almost double what it is; it seems the future (now) is not as rosy as everyone expected then...



Charts: Bloomberg

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Wed, 07/09/2014 - 10:53 | 4939468 Atomizer
Atomizer's picture

Oops, did someone YELL fire?

Wed, 07/09/2014 - 10:54 | 4939480 TideFighter
TideFighter's picture

Old pharts getting phucked. Going long on Alpo.

Wed, 07/09/2014 - 11:03 | 4939525 GetZeeGold
GetZeeGold's picture



Get Belgium on the phone....

Wed, 07/09/2014 - 13:25 | 4940178 Pool Shark
Pool Shark's picture



Want to see a roadmap of where US rates are headed?

See Japan, circa 1990 - present...


Wed, 07/09/2014 - 11:15 | 4939560 ZH Snob
ZH Snob's picture

negative rates for bonds are right around the corner.

that's right: the bondholder actually pays for the risk of never seeing his money again.

Wed, 07/09/2014 - 13:12 | 4940125 nasdaq99
nasdaq99's picture

the yield curve would probably already be inverted without intervention by the fed.

anybody that thinks they can derive meaning from a manipulated yield curve is an idiot.

Wed, 07/09/2014 - 10:52 | 4939470 ArkansasAngie
ArkansasAngie's picture

Oh Boy.

This is how the Fed will lose control of their monstrosity.


Wed, 07/09/2014 - 10:58 | 4939487 Atomizer
Atomizer's picture

Kicking the can down has no boundaries until the petrodollar recycling scam comes to an end. 

Gas under a dollar. 

Wed, 07/09/2014 - 11:00 | 4939516 disabledvet
disabledvet's picture

Depends on the can. Aluminum? Steel? Plastic?

Wed, 07/09/2014 - 11:19 | 4939574 Bernoulli
Bernoulli's picture

It's more like "kicking an old dirty plastic bag down the road"

Cans are for rich people.

Wed, 07/09/2014 - 11:41 | 4939660 SheepDog-One
SheepDog-One's picture

All it takes, as usual, is one big bankster not getting their skim any longer.

Wed, 07/09/2014 - 10:58 | 4939497 disabledvet
disabledvet's picture

This is the Fed getting control actually.

Wed, 07/09/2014 - 11:01 | 4939521 Atomizer
Atomizer's picture

Let's hope. 

Wed, 07/09/2014 - 11:22 | 4939581 astoriajoe
astoriajoe's picture

well, at least one more to add to the list.

Wed, 07/09/2014 - 10:53 | 4939471 Gringo Viejo
Gringo Viejo's picture

$ preparing to get shoved under 80 again. Last time?

Wed, 07/09/2014 - 11:07 | 4939536 MeMongo
MeMongo's picture


Re member opinions are like assholes! And you my friend are a giant one:-)

Wed, 07/09/2014 - 10:53 | 4939475 Kaiser Sousa
Kaiser Sousa's picture

same movements over 3 days ath the same fucking time...
they dont want Silver to move over $21. and double digit change...
they dont want Gold over $1320...

Wed, 07/09/2014 - 11:04 | 4939531 Bam_Man
Bam_Man's picture

Nothing to see here. Move along, now.

Wed, 07/09/2014 - 10:56 | 4939476 buzzsaw99
buzzsaw99's picture

Holly came from Miami, F.L.A.
Hitch-hiked her way across the U.S.A.
Plucked her eyebrows on the way
Shaved her legs and then he was a she
She says, "Hey, babe,
Take a walk on the wild side."
Said, "Hey, honey,
Take a walk on the wild side."...

And the colored girls say,
"Doo do doo do doo do do doo..."

Wed, 07/09/2014 - 10:56 | 4939485 TideFighter
TideFighter's picture

good one Buzz. Never fail to hum that song when it comes on the radidio. 

Wed, 07/09/2014 - 10:57 | 4939492 buzzsaw99
buzzsaw99's picture

take a walk out on the long end of the curve. lulz

Wed, 07/09/2014 - 10:57 | 4939496 Gringo Viejo
Gringo Viejo's picture

"'Scuse me while I whip this out."

.....Sheriff Bart

Wed, 07/09/2014 - 10:56 | 4939484 disabledvet
disabledvet's picture


Wed, 07/09/2014 - 10:58 | 4939500 Dr. Engali
Dr. Engali's picture




There fixed that for you.

Wed, 07/09/2014 - 11:10 | 4939551 NoDebt
NoDebt's picture

Nested recessionary shells within the overall depression.

Wed, 07/09/2014 - 11:14 | 4939556 NotApplicable
NotApplicable's picture

The shock-waves of wealth transfer.

Wed, 07/09/2014 - 10:57 | 4939494 Tjeff1
Tjeff1's picture

Prepare for inflation in basic materials and finished goods and deflation in assets.

Wed, 07/09/2014 - 11:40 | 4939657 tradewithdave
tradewithdave's picture

Many assets are comprised of basic materials plus the value add of finished goods. Oh, okay. This is the "neu neutral" aka "increase resilience"... the way you would break firewood over your knee... in the middle.

Wed, 07/09/2014 - 10:58 | 4939495 Dr. Engali
Dr. Engali's picture

That sound you hear is the sound of the collective puckering of the banker's assholes.

Wed, 07/09/2014 - 11:31 | 4939622 MidwestJester
MidwestJester's picture

Bankers aren't puckering shit. They see a problem, they send over the contractor with a nail gun. Do you see riots in the streets here in the US anywhere? Yeah, me neither... They are still riding high and living fat.

Wed, 07/09/2014 - 13:26 | 4940183 Dr. Engali
Dr. Engali's picture

A flat yield curve is a banker's nightmare. The only thing worse is an inverted one.

Wed, 07/09/2014 - 10:59 | 4939505 madbraz
madbraz's picture

Stretch that chart all the way to 1980 and you can see why the spread will go to 1%.

Wed, 07/09/2014 - 11:03 | 4939527 Zirpedge
Zirpedge's picture

Us sane investors went long on the MyRA's offered by the investor in chief. I guess you all couldn't forecast the insatiable demand for a safe and secure investment like US treasuries.

Wed, 07/09/2014 - 11:13 | 4939555 fonzannoon
fonzannoon's picture

why do you need a Myra to buy treasuries?

Wed, 07/09/2014 - 11:17 | 4939561 NotApplicable
NotApplicable's picture

Why do you fail to note his sarcasm?

Wed, 07/09/2014 - 11:28 | 4939608 fonzannoon
fonzannoon's picture

because on most of his previous posts I detected a lack of sarcasm. I always saw him as on someone's payroll. Also I hate his face.

Wed, 07/09/2014 - 11:41 | 4939662 FuzzyDunlop21
FuzzyDunlop21's picture

He looks homeless. Makes sense though, homeless have iphones it was only a matter of time before they downloaded the E*trade app

Wed, 07/09/2014 - 12:29 | 4939908 Zirpedge
Zirpedge's picture

"why do you need a Myra to buy treasuries?"

B'cause Obama! As with an IRA they will be offered on pre-tax income..just watch.

Wed, 07/09/2014 - 11:08 | 4939538 LawsofPhysics
LawsofPhysics's picture

Go ahead, raise rates motherfuckers.  Enough jawboning already.

Will. not. happen.

Wed, 07/09/2014 - 11:15 | 4939557 NoWayJose
NoWayJose's picture

Yup, earlier this year my little local bank was more than happy to mail out the paperwork to roll over my five year old CD from 5%+ to their new sub-1% rate -- but not quite as happy when I walked in and cashed out instead -- to buy gold.

Wed, 07/09/2014 - 11:22 | 4939570 Bernoulli
Bernoulli's picture

"Safe haven", right?

Why would anyone in their right mind give money away to the US government for 30 years and only get a 1.6% return compared to a 5 year bond?

What do they think a US dollar will be worth in 10 years from now? 20 years from now? And why would they think they get their money back at all?

Do they all believe in a Japanese deflation style scenario?!? Newsflash: In case there will be deflation in the US then everything goes belly up anyways.

And in case there will be inflation, then how does a 1.6% return on worthless paper sound?

I don't get it. Something smells fishy here.

Wed, 07/09/2014 - 11:47 | 4939684 FuzzyDunlop21
FuzzyDunlop21's picture

The average investor has the attention span of a moldy yogurt container. As long as the Fed is there, keep on buying. Full blown tapering is still 5-6 months away, which is about half of an eternity to your typical etrade baby. And thats assuming Mr Chairwoman has the testicular fortitute to go through with it, which she probably doesnt.

Wed, 07/09/2014 - 12:02 | 4939765 Eyeroller
Eyeroller's picture

The muppets smell the stench, but they have elected to ride the market crazy train, "safe" in the knowledge that they will jump off just before the crash.

Good luck with that.

Wed, 07/09/2014 - 11:48 | 4939686 Bam_Man
Bam_Man's picture

"Term Structure", bitchezzz. 

It's ZIRP 4-ever.

Wed, 07/09/2014 - 13:15 | 4940134 Landrew
Landrew's picture

Parking cash for temporary in any long end treasury doesn't make sense after tax. It's all mattress money now. Stories of tin can cash, mattress cash I never really believed or thought was very rare. Now I know it's all very, very real, as I park cash in the same way now. I traded the tin cans for a safe at home. All these bubbles hopefully don't blow all at the same time, that kind of pain even when prepared is NOT avoided.

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